When you think about an upcoming Trade fair, what thoughts come to mind? Do you view it simply as an opportunity to register and pay for booths to drive sales and profits? What other purposes do trade fairs and exhibition shows serve beyond sales? And how do organizers measure success for these events?

Trade fairs or exhibitions are events where businesses from a specific industry showcase their products, services, or innovations to potential buyers, partners, and other stakeholders. They have been essential to business development, offering a unique blend of promotion, networking, and market research. Whether you’re a startup or a well-established company, the benefits of participating in these events can be far-reaching.

Exhibiting at trade fairs requires significant investment—both in terms of time and money—the benefits typically outweigh the costs. Recently, the Naija Brand Chick Fair has expanded its reach beyond Nigeria. The trade fair has been quite successful in the Nigerian market, but it has dared to explore new opportunities for vendors and business owners in the international market. However, this moves evoked mixed reactions, inspiring this post on the different perspectives on Trade Fairs, especially for business owners. Some opined that it’s unwise to make such a significant financial investment in exhibiting goods outside the country, considering the country’s current economic situation, as some of those products are already widely available in the London market, which may result in low sales at the fair. On the other hand, some believe it’s an excellent opportunity to increase brand visibility and positioning.

When carefully aligned with business goals, trade fairs offer more than just a return on investment; they help build relationships, boost brand awareness, and provide market insights that fuel long-term growth.

Sales are undoubtedly a significant outcome of trade fairs; the benefits often extend far beyond. Trade Fairs and Exhibitions events serve as powerful platforms for:

Brand Visibility and Awareness: Exhibiting at a trade fair can significantly boost your brand’s visibility among target audiences. By showcasing your products or services in a focused environment, you can reach potential customers who have yet to learn about your business.

Networking and Relationship Building: Trade fairs provide excellent opportunities to connect with industry peers, potential partners, and customers. Networking can lead to new collaborations, partnerships, and valuable insights into market trends.

Market Research and Analysis: Observing competitor activities and gathering feedback from attendees can provide valuable market intelligence. This information can help you refine your business strategies and identify emerging trends.

Employee Motivation and Development: Participating in trade fairs can be a motivating experience for your team. It allows them to showcase their work, learn from industry experts, and gain valuable experience.

The recent expansion of the Naija Brand Chick Fair to international shores is a testament to trade fairs’ potential to drive business growth. Despite concerns about market saturation, the event proved successful, demonstrating value beyond immediate sales.

While participating in trade fairs can be a significant investment, the long-term benefits often outweigh the costs. By carefully considering your goals, target audience, and the fair’s value proposition, you can make informed decisions and maximize your return on investment.

Participating in trade fairs and exhibitions is about more than just immediate sales. It’s a strategic move that can enhance your brand visibility and foster new relationships, collaborations, and partnerships. These long-term benefits can be invaluable for your business growth, reassuring you that your investment in trade fairs is a sound decision.

Are you considering participating in a trade fair or exhibition soon? Your next event could be the game-changer that transforms your business from local to global success.

On July 23rd, 2024, The Central Bank of Nigeria (CBN) again announced a hike in the Monetary Policy Rate (MPR) from 26.25% to 26.75% to curb the country’s increasing inflation rate.

The move, though not a bad one, poses significant challenges for businesses already grappling with many economic hurdles. However, it’s important to note that SMEs have shown remarkable resilience in the face of such challenges, inspiring hope for the future.

Understanding the Monetary Policy and Impacts on SMES

A Monetary Policy Rate (MPR) of 26.75% means that a country’s central bank has set the interest rate at which commercial banks borrow it at 26.75% per annum.

In simple terms, this means the central bank lends money to commercial banks at an interest rate of 26.75%. Commercial banks then lend this money to their customers (individuals and businesses) at a higher interest rate, making borrowing money more expensive. This move attempts to control inflation by reducing consumption and demand for goods and services, furthering the decline in consumer buying ability and dwindling sales for business owners, including SMEs. 

This new development has faced much backlash from the entrepreneurial community, like NACCIMA and NECA, pointing out the ripple effect of policies like this on business owners. At the same time, the CBN, in its defence, highlighted the potential benefits of its interest rate hikes, such as the 234% year-on-year increase in capital importation to $5.92 billion in the first half of the year, H1’24, and the 62% year-on-year increase in Diaspora Remittances to $2.43 billion in H1’24. These figures, along with the rise in external reserves to $37. 05 billion, provide a sense of reassurance and optimism.

An increased interest rate directly translates to higher borrowing costs for businesses. SMEs, which rely heavily on loans for expansion, working capital, and investment, are particularly vulnerable. With rising capital costs, these businesses need help accessing funds, hindering their growth potential.

Moreover, the higher interest rate environment can lead to reduced consumer spending as individuals grapple with increased borrowing costs on personal loans and credit cards. This decline in consumer spending can adversely affect SMEs’ revenue, creating a domino effect on their operations.

What, then, is the way forward for SMEs faced with these myriad challenges?

While the challenges posed by the interest rate hike are substantial, SMEs can implement strategies to mitigate its impact. Here are some key recommendations:

Strategic Financial Management: SMEs should prioritize careful financial planning and budgeting, closely monitoring cash flow, reducing operational costs, and optimizing resource utilization.

Debt Management: SME owners must urgently review their debt obligations and explore refinancing options to secure lower interest rates potentially. They should prioritize debt repayment and avoid unnecessary borrowing.

Focus on High-Profit Areas and Diversify Revenue Streams:  Analyse product or service lines and prioritize those with higher profit margins; expanding product or service offerings will help reduce reliance on a single income source and enhance resilience during economic downturns.

Cost-Cutting Measures: Cost-saving initiatives, like streamlining operations, negotiating better supplier deals, and exploring alternative sourcing options, can help improve profitability.

Digital Transformation: Embracing technology can improve efficiency and reduce operational costs. Digital platforms can also facilitate access to new markets and customers, thereby reducing the impact of the interest rate hike on SMEs.

Government Support: SMEs should leverage government programs and initiatives to support businesses. These programs often provide financial assistance, capacity building, and market access, like the SMEDAN Sterling bank loan, which offers up to 2.5 million naira at one single interest rate. This support is crucial and should be seen as a source of encouragement for SMEs.

Strategic Partnerships and Collaborations: Collaborating with other businesses can create synergies and reduce costs. Forming strong relationships with suppliers and customers to negotiate better terms can also help. Overall, partnerships can also provide access to new markets and resources.

The CBN’s interest rate hike presents a formidable challenge for Nigerian SMEs. By adopting proactive measures and sound financial strategies, businesses can navigate these turbulent waters and emerge stronger. Government support and a conducive business environment are crucial in helping SMEs weather the storm and contribute to the nation’s economic growth.

Sources: https://punchng.com/higher-interest-rates-could-cripple-businesses-says-naccima/#google_vignette

https://www.vanguardngr.com/2024/07