Nigeria Financial Info, Market Reports



How to Sustain Growth and Profitability in Business
By Clara Nwachukwu

For several hours, many participants at the lecture on Driving Sustainable Business Growth�€ on September 30, 2007, in Lagos struggled with suggestions and ideas on how to sustain growth and profitability in business.

The struggle was not restricted to a particular type of business, size of company, position in the company or even ownership.

One thing that cuts across all the participants was the determination to see their line of businesses succeed, and was open to suggestions.

The lecture was not the typical recipe or knowledge hand down, but an interactive one, where the participants made their own contributions, including contradicting the lecturer, Professor Bala Chakravarthy, a renowned international management consultant.

Judging from the lecture and discussions that ensued, it was evident that making a success of any type of business does not depend on theories or what had worked for others in the past, but on current realities based on the prevailing conditions for that line of business and/or operating environment. 



For Chakravarthy, a Shell Chair Professor, many factors come into play for one to sustain a business concern.

He notes that often, many managers tend to get carried away by their profitability�€ and forget about putting in place machinery to sustain the growth.

According to him, sustaining profitable growth can be achieved by measuring performance over a period.

To measure this successfully, citing examples of big establishments in the United States, he said one could assess performance like within a five year period based on the average for the industry sub-sector and return on invested capital.�€ 

While the big organisations often make such assessments in their statement of accounts, which are issued quarterly, half-yearly and annually, it is not so easy for the one-man businesses, which base their assessments mainly on the profits from particular items.

But such assessments, is the difference between the rise and fall of businesses.

While acknowledging the truth of Chakravarthy, many of the participants pointed out the peculiarity of the Nigerian environment, which is not particularly business-friendly. 

For instance, one of the participants said his company in the financial services sector, spent about N24m per annum on diesel alone to run generating sets, which could otherwise had increased returns on shareholders investments. This is compounded by poor infrastructure. 

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