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SMEs: Understanding Risk

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understanding SMEs risk timi olubiyi

By Timi Olubiyi, Ph.D

In many of Africa’s developing nations, running a business or setting up a new one is a brave move for even the most qualified of entrepreneurs.

This is due to the prevailing harsh economic and business environment on the continent. However, irrespective of the form of investment or business consideration, there will always be some risks involved or obstacles to overcome to achieve success.

Starting up a new business or firm is a high-risk exercise in itself. All business enterprise faces a wide variety of risks, some of which come from within the company and others from outside.

Therefore, part of the true strength and courage of an entrepreneur is the ability to accept risks, and even when a setback is experienced, to have the nerve to come back and retry again.

Entrepreneurs are usually risk-takers, who often spot opportunities in the market and develop new ideas for products and services by combining resources available at disposal.

These steps typically come with associated risks because every business decision has an element of risk. This means that an entrepreneur cannot avoid risk in setting up a new venture or start-ups.

Available data and reports have shown that a large proportion of new businesses eventually fail in the incubation stage.

Consequently, there is no guarantee of success in business, particularly in start-ups. This means that any entrepreneur willing to set up a company runs the risk of failure, often involving financial loss. Business activity can expose an entrepreneur to different forms of risk, from financial loss to business failure, or lack of security.

Objectively, the main risks facing businesses revolve around internal factors such as customer and competitive behaviour, their current financial position, or external factors such as the economic climate, political stability, and regulation and compliance costs.

Other areas of risk to businesses are input costs, compliance costs, market manipulation by some players, competitor activity, cyber-crime, and debt. The current reality of the novel coronavirus (COVID19) pandemic is equally a risk to businesses. A contingent plan of a change of strategy might be essential for the progression of companies at this time.

Further to this, the government laws, policy responses to the pandemic and other forms of regulation invariably impose a wide and growing range of obligations on businesses, especially Small Medium Enterprises (SMEs). All these ordinarily will impact on business operations and its performance. It is imperative to state categorically that the biggest risks in business are taken in the first few years of business operations. The economy, and society as a whole, benefit when enterprises carry out their activities successfully.

From context observation, businesses run the risk of funding, which is crucial at the start-up stage, followed by a sound business model to get the start-up off the ground, and very vital, the unique selling point (USP).

Another significant position requires for a business to be successful is a strong workforce, who share the same values and goals for the future and progression of the business/organization.

A lack of cooperation or disagreements about these key business factors can create roadblocks for maintaining successful growth. If any of the area aforementioned fails, then it can have crucial implications for the future of the business. Risk is an inevitable part of every business venture, no matter the size or structure.

Furthermore, to make a decision where the outcome is uncertain, unpredictable, and uncontrollable, financial wealth can either be gained or lost on the outcome of such a decision.

Meaningfully, it is possible to be in business and have manageable risks. Nonetheless, to mitigate risk in business, it is safe to consider risk management, which is one of the most important components of a successful business and investment plan.

Some action to minimize risk in business operations, including having insurance, adequate planning, diversifying locations, having good processes and systems in place, conducting market intelligence, and having the right staff. Conventional risk management procedures can be adopted, which tends to focus on identifying, assessing and dealing with the risks associated with any of the business operations.

The relationship between risk and reward is one of the fundamentals of wealth creation globally and the focus of this article. Therefore, to create wealth, SME operators and entrepreneurs need to take calculative risks.

Risk is unavoidable, and every threat is also an opportunity to grow. So, entrepreneurs and SME operators need to recognize when the level of risk in any business operation is relatively too high.

More so, with careful planning, an entrepreneur can minimize the amount of risk they could face by considering information, such as market research data, that is available to them.

Furthermore, financial planning and an internal audit will be integral in effectively managing business operations and useful to mitigate unforeseen risks. Any accountable business, will exercise and have strict compliance on all the measures as mentioned above to stay aloft and also manage its affairs responsibly.

The rewards from business operations are a justification for risks taking, though, and these include both financial and non-financial rewards. The financial reward is the cash-based return and benefit accrued from taking risks. It can be said to be the return on investment or profits.

However, the potential non-financial benefits naturally depend on entrepreneurs’ values and business circumstances, particularly that of the shareholders and the business operators.

On the other hand, many non-financial rewards arise from motives achieved such as a sense of business satisfaction, independence, positive reputation, opening a new location, employing more staff, getting an industry award or good publicity/popularity and even, getting great positive feedback from customers.

Significantly, when making business decisions, entrepreneurs should consider the risks and rewards involved. Expectedly weighing risks and rewards should be the pivot of any investment or business decision.

However, in practice, businesses often disregard to consider risk against reward. In many SMEs, including large listed firms’ risks are ‘managed’ with little consideration of gain, and decisions are taken with scant regard to the risk involved.

As a professional, the accurate recommendation is for SME operators and entrepreneurs to consider weighing up the risks associated with business decisions against the expected rewards.

How should this be done is the big question? In practice, when taking a decision, there may be more than one gain and more than one loss, however, the ideal is to have the sum of the expected values of benefits to exceed the amount of expected values of losses.

Having a comprehensive business insurance policy in place can equally protect your business from many of the common risks faced in the day-to-day running, so entrepreneurs can have peace of mind and focus on the positive sides of the company. A successful business may always require a strategic plan, as well.

Putting proactive strategies in place for how to take advantage of these risks will be a business differentiator.

Part of a strategic business approach is to understand the market space in which one operates. Several surveys have suggested a culture of having and conforming to standard business ethics, rules, principles and sound corporate governance mechanism as helpful tools a business organization can adopt.

After all, money is a central factor in the motivation and operation of a business. However, it is not advisable to get into business if you do not have some appetite for risk and failure, especially with the current realities. On that note, the risk is part of life and part of the company. Understanding and managing the risks involved in your business are key to achieving business success. Good luck!

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

Dr Timi Olubiyi is an Entrepreneurship and Small Business Management expert. He is a prolific investment coach, business engineer, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: dr***********@***il.com for any questions, reactions, and comments.

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How Christians Can Stay Connected to Their Faith During This Lenten Period

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Lenten Period

It’s that time of year again, when Christians come together in fasting and prayer. Whether observing the traditional Lent or entering a focused period of reflection, it’s a chance to connect more deeply with God, and for many, this season even sets the tone for the year ahead.

Of course, staying focused isn’t always easy. Life has a way of throwing distractions your way, a nosy neighbour, a bus driver who refuses to give you your change, or that colleague testing your patience. Keeping your peace takes intention, and turning off the noise and staying on course requires an act of devotion.

Fasting is meant to create a quiet space in your life, but if that space isn’t filled with something meaningful, old habits can creep back in. Sustaining that focus requires reinforcement beyond physical gatherings, and one way to do so is to tune in to faith-based programming to remain spiritually aligned throughout the period and beyond.

On GOtv, Christian channels such as Dove TV channel 113, Faith TV and Trace Gospel provide sermons, worship experiences and teachings that echo what is being practised in churches across the country.

From intentional conversations on Faith TV on GOtv channel 110 to true worship on Trace Gospel on channel 47, these channels provide nurturing content rooted in biblical teaching, worship, and life application. Viewers are met with inspiring sermons, reflections on scripture, and worship sessions that help form a rhythm of devotion. During fasting periods, this kind of consistent spiritual input becomes a source of encouragement, helping believers stay anchored in prayer and mindful of God’s presence throughout their daily routines.

To catch all these channels and more, simply subscribe, upgrade, or reconnect by downloading the MyGOtv App or dialling *288#. You can also stream anytime with the GOtv Stream App.

Plus, with the We Got You offer, available until 28th February 2026, subscribers automatically upgrade to the next package at no extra cost, giving you access to more channels this season.

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Turning Stolen Hardware into a Data Dead-End

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Apu Pavithran Turning Stolen Hardware

By Apu Pavithran

In Johannesburg, the “city of gold,” the most valuable resource being mined isn’t underground; it’s in the pockets of your employees.

With an average of 189 cellphones reported stolen daily in South Africa, Gauteng province has become the hub of a growing enterprise risk landscape.

For IT leaders across the continent, a “lost phone” is rarely a matter of a misplaced device. It is frequently the result of a coordinated “snatch and grab,” where the hardware is incidental, and corporate data is the true objective.

Industry reports show that 68% of company-owned device breaches stem from lost or stolen hardware. In this context, treating mobile security as a “nice-to-have” insurance policy is no longer an option. It must function as an operational control designed for inevitability.

In the City of Gold, Data Is the Real Prize

When a fintech agent’s device vanishes, the $300 handset cost is a rounding error. The real exposure lies in what that device represents: authorised access to enterprise systems, financial tools, customer data, and internal networks.

Attackers typically pursue one of two outcomes: a quick wipe for resale on the secondary market or, far more dangerously, a deep dive into corporate apps to extract liquid assets or sellable data.

Clearly, many organisations operate under the dangerous assumption that default manufacturer security is sufficient. In reality, a PIN or fingerprint is a flimsy barrier if a device is misconfigured or snatched while unlocked. Once an attacker gets in, they aren’t just holding a phone; they are holding the keys to copy data, reset passwords, or even access admin tools.

The risk intensifies when identity-verification systems are tied directly to the compromised device. Multi-Factor Authentication (MFA), widely regarded as a gold standard, can become a vulnerability if the authentication factor and the primary access point reside on the same compromised device. In such cases, the attacker may not just have a phone; they now have a valid digital identity.

The exposure does not end at authentication. It expands with the structure of the modern workforce.

65% of African SMEs and startups now operate distributed teams. The Bring Your Own Device (BYOD) culture has left many IT departments blind to the health of their fleet, as personal devices may be outdated or jailbroken without any easy way to know.

Device theft is not new in Africa. High-profile incidents, including stolen government hardware, reinforce a simple truth: physical loss is inevitable. The real measure of resilience is whether that loss has any residual value. You may not stop the theft. But you can eliminate the reward.

Theft Is Inevitable, Exposure is Not

If theft cannot always be prevented, systems must be designed so that stolen devices yield nothing of consequence. This shift requires structured, automated controls designed to contain risk the moment loss occurs.

Develop an Incident Response Plan (IRP)
The moment a device is reported missing, predefined actions should trigger automatically: access revocation, session termination, credential reset and remote lock or wipe.

However, such technical playbooks are only as fast as the people who trigger them. Employees must be trained as the first line of defence —not just in the use of strong PINs and biometrics, but in the critical culture of immediate reporting. In high-risk environments, containment windows are measured in minutes, not hours.

Audit and Monitor the Fleet Regularly

Control begins with visibility. Without a continuous, comprehensive audit, IT teams are left responding to incidents after damage has occurred.

Opting for tools like Endpoint Detection and Response (EDR) allows IT teams to spot subtle, suspicious activities or unusual access attempts that signal a compromised device.

Review Device Security Policies
Security controls must be enforced at the management layer, not left to user discretion. Encryption, patch updates and screen-lock policies should be mandatory across corporate devices.

In BYOD environments, ownership-aware policies are essential. Corporate data must remain governed by enterprise controls regardless of device ownership.

Decouple Identity from the Device
Legacy SMS-based authentication models introduce avoidable risk when the authentication channel resides on the compromised handset. Stronger identity models, including hardware tokens, reduce this dependency.

At the same time, native anti-theft features introduced by Apple and Google, such as behavioural theft detection and enforced security delays, add valuable defensive layers. These controls should be embedded into enterprise baselines rather than treated as optional enhancements.

When Stolen Hardware Becomes Worthless

With POPIA penalties now reaching up to R10 million or a decade of imprisonment for serious data loss offences, the Information Regulator has made one thing clear: liability is strict, and the financial fallout is absolute. Yet, a PwC survey reveals a staggering gap: only 28% of South African organisations are prioritising proactive security over reactive firefighting.

At the same time, the continent is battling a massive cybersecurity skills shortage. Enterprises simply do not have the boots on the ground to manually patch every vulnerability or chase every “lost” terminal. In this climate, the only viable path is to automate the defence of your data.

Modern mobile device management (MDM) platforms provide this automation layer.

In field operations, “where” is the first indicator of “what.” If a tablet assigned to a Cape Town district suddenly pings on a highway heading out of the city, you don’t need a notification an hour later—you need an immediate response. An effective MDM system offers geofencing capabilities, automatically triggering a remote lock when devices breach predefined zones.

On Supervised iOS and Android Enterprise devices, enforced Factory Reset Protection (FRP) ensures that even after a forced wipe, the device cannot be reactivated without organisational credentials, eliminating resale value.

For BYOD environments, we cannot ignore the fear that corporate oversight equates to a digital invasion of personal lives. However, containerization through managed Work Profiles creates a secure boundary between corporate and personal data. This enables selective wipe capabilities, removing enterprise assets without intruding on personal privacy.

When integrated with identity providers, device posture and user identity can be evaluated together through multi-condition compliance rules. Access can then be granted, restricted, or revoked based on real-time risk signals.

Platforms built around unified endpoint management and identity integration enable this model of control. At Hexnode, this convergence of device governance and identity enforcement forms the foundation of a proactive security mandate. It transforms mobile fleets from distributed risk points into centrally controlled assets.

In high-risk environments, security cannot be passive. The goal is not recovery. It is irrelevant, ensuring that once a device leaves authorised hands, it holds no data, no identity leverage, and no operational value.

Apu Pavithran is the CEO and founder of Hexnode

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Daniel Koussou Highlights Self-Awareness as Key to Business Success

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Ambassador Daniel Kossouno

By Adedapo Adesanya

At a time when young entrepreneurs are reshaping global industries—including the traditionally capital-intensive oil and gas sector—Ambassador Daniel Koussou has emerged as a compelling example of how resilience, strategic foresight, and disciplined execution can transform modest beginnings into a thriving business conglomerate.

Koussou, who is the chairman of the Nigeria Chapter of the International Human Rights Observatory-Africa (IHRO-Africa), currently heads the Committee on Economic Diplomacy, Trade and Investment for the forum’s Nigeria chapter. He is one of the young entrepreneurs instilling a culture of nation-building and leadership dynamics that are key to the nation’s transformation in the new millennium.

The entrepreneurial landscape in Nigeria is rapidly evolving, with leaders like Koussou paving the way for innovation and growth, and changing the face of the global business climate. Being enthusiastic about entrepreneurship, Koussou notes that “the best thing that can happen to any entrepreneur is to start chasing their dreams as early as possible. One of the first things I realised in life is self-awareness. If you want to connect the dots, you must start early and know your purpose.”

Successful business people are passionate about their business and stubbornly driven to succeed. Koussou stresses the importance of persistence and resilience. He says he realised early that he had a ‘calling’ and pursued it with all his strength, “working long weekends and into the night, giving up all but necessary expenditures, and pressing on through severe setbacks.”

However, he clarifies that what accounted for an early success is not just tenacity but also the ability to adapt, to recognise and respond to rapidly changing markets and unexpected events.

Ambassador Koussou is the CEO of Dau-O GIK Oil and Gas Limited, an indigenous oil and natural gas company with a global outlook, delivering solutions that power industries, strengthen communities, and fuel progress. The firm’s operations span exploration, production, refining, and distribution.

Recognising the value of strategic alliances, Koussou partners with business like-minds, a move that significantly bolsters Dau-O GIK’s credibility and capacity in the oil industry. This partnership exemplifies the importance of building strong networks and collaborations.

The astute businessman, who was recently nominated by the African Union’s Agenda 2063 as AU Special Envoy on Oil and Gas (Continental), admonishes young entrepreneurs to be disciplined and firm in their decision-making, a quality he attributed to his success as a player in the oil and gas sector. By embracing opportunities, building strong partnerships, and maintaining a commitment to excellence, Koussou has not only achieved personal success but has also set a benchmark for future generations of African entrepreneurs.

His journey serves as a powerful reminder that with determination and vision, success is within reach.

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