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Founders Effect and Enterprise Failure: Anticipating and Avoiding the Pitfalls

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Timi Olubiyi Small Business Improve Profitability

By Timi Olubiyi, PhD

Small businesses are important for many reasons be it nano, micro, small, or medium-sized enterprises; on one hand, as an important contributor to any economy, and as the lifeblood of many developing and underdeveloped economies.

Small businesses can equally provide many essential opportunities that cannot be overlooked because as they scale, they impact innovation, job creation, economic diversification, poverty reduction, wealth creation, and income redistribution within the country.

Hence, the core attribute that makes small businesses achieve all these and more is the agility that the founders/owner-managers provide. This makes this form of business nearly inseparable from the founders.

This inseparability makes the decision-making process and flexibility within the businesses much faster than that of large corporations. More so, coupled with the agile management that exists in small businesses, adaptation to current realities and changing economic circumstances is much easier in small businesses.

Research finds have also shown that the agility that exists in small businesses is the direct involvement of the founders, and the business owners. They can provide quick decisions and also react to changes in the environment easily.

There is no doubt that the COVID-19 pandemic has added to small business challenges around the world. A lot has happened with the novel coronavirus (COVID-19) pandemic, it has fuelled a lot of economic, livelihood, and business disruptions with more grave consequences on developing countries like Nigeria.

Without a doubt, the pandemic has brought about the untimely loss of loved ones, colleagues, associates, neighbours, friends, and prominent Nigerians. While many died as a result of COVID-19 complications, some died due to accidents, age-long sicknesses and others died as a result of economic pressures.

The painful truth is that most of them held key roles in the entertainment industry, sports, politics, and in particular many held key roles in businesses around before they succumbed to death drawing from context observation.

As it stands and relying on worldometer and the World Health Organization (WHO) figures, as of January 2022, coronavirus deaths, since the pandemic began, stand at 5,575,367 and 3,116 in Nigeria.

The figure seems underreported for Nigeria because the common knowledge is that most deaths go underreported and most times not captured and unrecorded with the necessary authorities. Families do not see reasons to formalize closures by visiting the hospital for proper attestation, getting death certificates, and having the deaths captured.

As a reminder, since small businesses and the founders/owner-managers are inseparable, it is easy then to conclude that we may just be losing businesses as part of the huge consequences of the COVID-19 situations.

Agreeably, the rate at which obituaries come up in the newspapers these days has been very alarming and disturbing, many are unaware that most of these late individuals are business owners and key decision-makers in these businesses.

Therefore, what happens to the business when a founder dies or is incapacitated? This usually creates a leadership vacuum in the businesses, survival and continuity is highly threatened which may lead to liquidation of the business.

In fact, research finds corroborate that many businesses could suffer long-lasting and significant negative impacts if the founders/ owner-managers die untimely. Though no reliable data to substantiate this claim in Nigeria, it is evident that a large portion of the population lives on income from small businesses which account for 96 per cent of businesses and 84 per cent of jobs in the country.

Coupled with the current demography of Nigeria, the prevalence of deaths of founding entrepreneurs or owner-managers may negatively impact many of the businesses and worsen the unemployment situation in the country. Though small businesses have different forms of incorporation, from a partnership to sole proprietorship, or Private Limited Company (Ltd) and Private Unlimited Company, the reality is that founders /owner-managers rarely put such business structures in place.

So, upon the owner’s death, who has a clear vision and goals for the business, a leadership and decision-making vacuum is created almost immediately. A clear recent reference was the November 2021 collapse of a high-rise block of luxury flats under construction in Ikoyi Lagos State. At least 42 people died including the property developer, who also is the MD/CEO and owner-manager of the building.

Since the unfortunate incident and the demise of the founder/MD/CEO of the company, no detailed communiqué or press release has been issued in respect of the building collapse by the company -an incorporated limited company.

What we have in the public space is the investigations and evaluation of the state of things by the Lagos State Government. Contrarywise, the project’s website has been shut down by the company, therefore, it is easy to tell that as capital intensive the project is, the company behind it lacks an adequate business structure.

Most times, this is usually the trend with small businesses in the country, the businesses disappear or experience significant operational decline following the death of the founder or key owner-manager, regardless of the form of business incorporation.

Chief Moshood Abiola and Chief Henry Fajemirokun’s stories and a host of others are well known. They had investments in critical sectors of the economy with business interests from aviation, agriculture, sports, bakery, real estate, publishing, and communications but after their death, the businesses fizzle out gradually.

It starts with business struggles, the overall performance of workers and staff dwindles and the family of the founder who most times have no knowledge of the business steps in, which further compounds the misfortune of the businesses. Contrary to what the majority thinks is right, a business owner’s spouse is never a co-owner of the business just by virtue of marriage unless it is expressly stated in the incorporation documents.

With the changing economic circumstances of businesses, a non-economic factor such as the deaths of founders, decision-makers, and key entrepreneurs may further impact negatively on the small businesses that are already burdened with challenges.

The going concerns of many of these businesses may just be threatened because of the negative impact of the pandemic and any loss of owner-managers. Consequently, with the silently ravaging pandemic and untimely deaths, family businesses and small businesses may just need to adopt strategies to stem the tides.

On the part of businesses, attention should be paid to the effective implementation of businesses structure, good governance, business risk analysis, succession planning, mentorship, and transitions because these are the most prevalent factors leading to leadership vacuums. Stakeholder management is equally important customers, employees, vendors, and investors contributions, feedback, and initiatives should be honoured and appreciated for different situations at all times.

To reduce the vulnerability of small business closure with the demise of the founders, government, policymakers, and SMEDAN need to intensify their efforts to disseminate information on business continuity, capacity development, technology usage, and other needs for SMEs to continue to make the desired positive impact in the country. So, a lot of support and development of interventions from the government is required for small businesses to go beyond mere survival.

On a final note, government interventions can transform small businesses, into vast employers of labour, tax generators, which will contribute to government revenue, and ultimately the growth of the economy, but again right structures have to be in place. Good luck!

How may you obtain advice or further information on the article?

Dr Timi Olubiyi, an Entrepreneurship & Business Management expert with a PhD in Business Administration from Babcock University Nigeria, is a prolific investment coach, seasoned scholar, Chartered Member of the Chartered Institute for Securities & Investment (CISI), and Securities & Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com, for any questions, reactions, and comments.

Enterprise Failure

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Na 2027 We Go Chop?

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2027 elections Nigeria

By Tony Ogunlowo

All the talk in the political arena, right now, is about the elections in 2027, two years away: how Tinubu is going to win a second term in office or how a coalition fronting Peter Obi or Atiku is going to unseat him.

The year 2027 is still a good two years away and what the President was [supposedly] elected to do in his first term he hasn’t even scratched the surface of it apart from indulging in the usual blame-game on his predecessor, complaining about lack of funds and presiding over party-in fighting. Just like Nero played the fiddle while Rome burned he still manages to go on long foreign holidays oblivious to what is going on in the country.

Politicians in Nigeria seem to forget, very quickly, why they were voted into office in the first place: they are there to serve the needs of the people, not to enrich themselves, legally or illegally, not to make a name for themselves and certainly not to ignore the needs – and security – of the people who voted them into power.

The average politician is of “…anywhere belle face…”, which is to say for me, me and myself: no morals, no principles and no integrity. They jump ship quite often and ‘if ‘lagbaja’ is paying then I’m joining his party’ which will explain the mass exodus of governors, senators and other politicians decamping to the ruling APC party, risking the nation fast becoming a one-party state.

As we’ve seen from history one-party states don’t work: it only promotes corruption, inefficiency and cronyism. The old USSR collapsed for the simple reason the party fat cats were more concerned about maintaining their bourgeoisie lifestyles than looking after their people: they forgot what they were there for. The same is happening in Nigeria now.

How much does a ‘congo’ of rice or garri cost? Or a tray of eggs? How much does it cost to fill up your car tank, if you can? Or how much is your electricity bill, even though you didn’t get any power? And what about security? What’s to say you won’t be robbed, kidnapped or killed tomorrow when you are out and about? This and a multitude of other problems is what is happening on the streets of Nigeria on a daily basis. Of course, the high and mighty and politicians live in their high walled private estates with fresh food flown in from abroad weekly, armed guards to watch over them and totally oblivious to what’s going on around them.

There has been no improvement on the situation and things are only getting worse. Sadly, the only thing on your average politician’s mind is how he/she is going to get re/elected in 2027 by crook or by hook and they got a slew of PR experts and marketing gurus to come up with new campaign slogans and a basket-full of promises they’ll never fulfil. In a sane climate if a politician is doing the job he was elected to do to the people’s satisfaction, in the first place, he wouldn’t have to worry about re-election: the people would vote him in willingly.

When you’re employed by a company, for instance, you’ll be subject to weekly, monthly or quarterly assessments by your immediate superior. You are expected to hit certain targets and if your performance falls below what is expected of you you’ll be fired! Why can’t the same rule apply to our politicians? If you don’t do what we expect from you, you are out at the next election. Performance is the key word here and this is how it should be. But come the next election and the starving, belittled, abused, unemployed, sick and endangered people will still vote for the incumbent President despite the fact he’s done nothing proactively to turn things around in his first term, as his predecessor did nothing and as his predecessor did nothing…should I continue to go backwards in time? People seem to have a very short memory until the hardship kicks in.

The Chinese say “..a journey of a thousand miles begins with a single step..”, Nigeria’s problems, as gargantuan as they are, can only end when politicians put their selfish interests aside and make a conscious effort to start changing things, a step at a time. Start with tackling the high cost of living. Remember a hungry man is an angry man. Try by making the basic things in life such as food, fuel and electricity affordable: empty promises don’t fill a hungry man’s stomach it only fuels dissent.

And the people have themselves to blame too, why vote in a person who’s going to do nothing for four years and vote him in again?

Itsbeggar’s belief.

So why all the politicians are fretting about themselves, stabbing each other in the back in an attempt to get re-elected, I simply ask ‘na 2027 we go chop?’(-if only it were possible!). Very soon the slogan ‘ebi pa wa o’(we are hungry) will become the new national anthem hopefully forcing politicians to forget their obsession with the 2027 elections and do something….perhaps!

You can follow Tony Ogunlowo on Twitter: @Archangel641 or visit http://www.archangel641.blogspot.co.uk

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Of Mandate Group, Delta Unity Group and Delta 2027

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Delta Unity Group

By Jerome-Mario Utomi

The April 12, 2025, defection of members of the Delta Unity Group (DUG) to the All Progressive Congress (APC) signposts a major political shift in Delta’s politics.

Pundits believe that the Peoples Democratic Party (PDP) which presently controls the state needs a miracle to win Delta’s 2027 governorship election given the massive haemorrhage that has hit it. Essentially, the over 10,000 members of the DUG and their supporters who defected to the APC were made up of seasoned grassroots PDP chieftains.

The defectors were received by the National Chairman of the All-Progressive Congress (APC), Mr Abdullahi Umar Ganduje, Governor Monday Okpebholo of Edo State, and the Chairman of the Governing Board of the Niger Delta Development Commission (NDDC), Mr Chiedu Ebie, alongside other notable political figures in Delta State.

So far, Deltans are enamoured by the significant political shift with many describing the development as a political earthquake which was long overdue. Because of its grassroots orientation, political analysts have likened the DUG to the Mandate Group, an independent political pressure group that midwifed the election of Mr Bola Tinubu, now President, as Lagos State Governor in the late 1990s.

In the run up to the 2023 presidential election, among so many objectives, the group was primed and positioned to defend President Tinubu’s mandate and promote democracy, unity, justice, and liberty in Nigeria, mobilize support for him and Vice President Kashim Shettima’s administration, Promote Unity and Justice: Foster national unity, justice, and liberty for all Nigerians among others.

The Mandate Group which has established structures in all 36 states, with plans to launch state chapters and  currently have 580,000 members in Lagos and aim to reach 40 million members nationwide within the next 12 months, targets  various segments of society, including: Students, Workers, Artisans, Teachers, Fishermen, Farmers and Women.

In like manner, the DUG has emerged as a third force in Delta State politics. Although it is not a new body, it has, over the years, been quietly bestriding Delta’s political landscape for the good of the state. Call it a third force in the politics of Delta State, and you won’t be wrong because, from all ramifications, that is what DUG represents.

DUG is by no means a political party, but, as the name implies, it is a Delta State based political pressure group convened a few years ago by the selfless, foresighted and influential trio of  Mr Olu-Tokunbo (Lulu) Enaboifo, Mr Chiedu Ebie and Sir Itiako (Malik) Ikpokpo.

Their aim and dream were to establish a political pressure group with an agenda to modernize Delta State and also serve as the brain box of the campaign platform of Olorogun David Edevbie, who was vying for the governorship candidate of PDP towards the 2023 gubernatorial election.

Even though the aspiration ended with the Supreme Court ruling in favour of Governor Sheriff Oborevwori of Delta State, the DUG remained a strong force that started building gradually on the dream of a modernized Delta State. DUG has an organizational structure of 17 National Executive Council members, a Board of Trustees, and Local Government Executives in all the 25 local governments in Delta State, with Ward Executives in all the wards across Delta State, DUG is deeply rooted in the grassroots of Delta State with its cell-like structures.

Prior to the 2023 election, a wing of DUG, at the Obinoba Declaration, crossed over to APC, where the APC governorship candidate, Mr Ovie Omo-Agege, described them as the intelligent wing of PDP.

The group significantly made a huge difference in the 2023 general elections in Delta State. The DUG members in the Delta North Senatorial District, at that point in time, remained with PDP and after full deliberation and strategizing, opted to support the candidature of the APC governorship candidate and all other candidates of APC, even though they had not formally left the PDP. Consequently, most of them were either suspended or cast away by PDP after the elections.

It was easy to blend and work harmoniously with the progressives due to the progressive mindset of DUG members. After the 2023 general elections in Delta State, DUG members of Ika Federal Constituency continued to align and work closely with the APC to strengthen the party and ensure that it is properly positioned to convert the Ika Federal Constituency to an APC constituency come 2027.

To the glory of God, President Tinubu found DUG’s co-founder/convener, Mr Ebie, fit to chair the Governing Board of the NDDC in 2023. This further gave the DUG more vigor to project the Renewed Hope Agenda of the progressive governance of Mr President. Following this appointment, Ika Federal Constituency became the heartbeat of DUG in Delta State, which has now radiated positively to Ndokwa/Ukwuani and Aniocha/Oshimili Federal Constituencies in Delta North.

This wave, which has led to the massive decamping of members of PDP and the Labour Party into DUG in preparation for absorption into the APC, has also witnessed the reactivation of some dormant APC ambers and the massive welcoming of previously non-partisan and newly retired civil servants into the APC, having witnessed the positive impact of the Renewed Hope Agenda of Mr. President.

Because the group was fully poised for the reconfiguration of Delta State in the progressive fold of the APC, it is therefore, not surprising to witness the humongous crowd that emptied into APC on 12th day of April, 2025 in Agbor, Ika Federal Constituency, Delta State.

Going by the above development, it is obvious that come 2027, Ika nation in particular and Deltans in general shall witness the dethronement of People’s Democratic Party, PDP, in the state and enthronement of a people focused leadership to be formed by the All Progressive Congress, APC, in line with President Bola Ahmed Tinubu’s Renewed Hope Agenda.

Utomi, a media specialist, writes from Lagos, Nigeria. He can be reached via Jeromeutomi@yahoo.com/08032725374

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Piracy in Africa’s Creative Sector: How Creators Can Protect Their Content

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Creators Can Protect Their Content

Africa’s creative industries, from music and film to fashion, writing, and branding, are experiencing remarkable growth. However, as the sector flourishes, so do the threats posed by piracy and copyright infringement. Without proper protection, creators risk losing the value and recognition they deserve for their original work.

Copyright remains the first and most important line of defence. In many African countries, copyright protection begins automatically once a creative work, such as a song, logo, film, or design, is fixed in a tangible form. This protection can last for the creator’s lifetime, and in most cases, up to 70 years after. Yet, while automatic copyright provides a foundation, official registration strengthens legal standing and can be critical in resolving disputes.

When a creator’s work is used without permission, the violation must be addressed swiftly. Experts advise that the first step is to gather evidence—screenshots, URLS, timestamps, user details, and even data showing engagement or financial gain from the misused content. Proof of ownership, such as original files with timestamps, draft versions, or social media records of earlier uploads, is equally vital.

“Creators should always have proof of ownership ready,” says Frikkie Jonker, Director of Anti-Piracy at MultiChoice. “That could be anything from original project files to old emails or posts. It’s one of the most effective tools in enforcing your rights.”

Once evidence is collected, creators can issue takedown requests through social platforms or send formal cease-and-desist letters to website owners or hosts. Although enforcement processes differ by country, most African nations have copyright laws aligned with global standards like the U.S. DMCA. In many cases, showing credible ownership is enough to have infringing content removed.

If infringement continues or is being done at scale, such as by piracy rings or repeat offenders, creators may need to escalate the issue by reporting it to national copyright commissions or law enforcement. Efforts are also being bolstered across the continent through cooperation under agreements like the African Continental Free Trade Area (AfCFTA), with international bodies like Interpol, Afripol, and WIPO supporting cross-border enforcement.

Preventative measures are just as important. Creators are encouraged to use tools like digital watermarking and content fingerprinting to protect their work from unauthorised use online. Furthermore, smart monetisation strategies, such as YouTube’s Content ID syste,m can allow creators to earn revenue even when their content is reused without prior permission.

By understanding their rights, taking proactive steps to protect their creations, and using available technologies, African creatives can safeguard their work while continuing to build sustainable, long-term careers.

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