On May 29th, 2023, during his inauguration speech, President-elect Bola Tinubu announced that the long but highly controversial fuel subsidy would be removed after June 2023. This announcement has sparked widespread panic among Nigerians as fuel prices immediately surged from 185 naira ($0.40) to a range of 488 naira ($1.05) to 550 naira ($1.18) nationwide.
As many Nigerians race to the filling stations and brace the long queues to buy fuel, the impact of the spike in fuel prices has been instantaneous.
Unfortunately, business owners, especially small business owners, are expected to feel the brunt of the effects of the removal of fuel subsidies. Now more than ever, it is crucial for business owners to promptly reassess their strategies and devise effective plans to navigate the challenges of this new post-subsidy era.
To assist you in this process, here are eight ways to restructure your business, maximize profit, and manage the effects of the fuel subsidy removal.
Review your business strategy
With the ongoing increase in fuel costs, it is crucial to thoroughly reevaluate your current business strategy. You need to assess the potential impact that rising fuel prices might have on your operations and finances.
It’s important that you take the time to analyze your business products, the new pain points of your target market, what your competitors are already doing, and your overall value proposition. You can start by asking yourself these questions:
- How does the removal of the fuel subsidy directly impact my business operations and profitability?
- How will the increased cost of living affect my customers’ willingness to purchase or use my products/services?
- What strategies can I implement to retain existing customers and attract new ones despite the challenges posed by increased fuel costs?
By answering these questions and conducting further market research and analysis, you will be able to identify areas where you can optimize processes, reduce costs, and adapt to changing economic conditions.
If you feel you need additional, preferably expert, opinions on how to reevaluate your business strategy, don’t hesitate to schedule a one-on one consultation with our advisors. We are here to help you navigate through these challenges and come out stronger on the other side.
Adjust your pricing
When it comes to readjusting prices, business owners are often skeptical, with their biggest fear being: What if I lose customers due to the price increase? Which is even more understandable given Nigeria’s present economy.
However, it’s important to remember that adjusting your pricing can be a necessary step to weather the storm and ensure your business survives.
Take a moment to review your current pricing strategy and carefully analyze the costs involved in producing high quality products or services for your customers. Then, explore how much you can increase prices without overwhelming your customers while still be able to continue delivering outstanding products or services.
Remember, transparency and communication are key. Clearly communicate the reasons behind any price adjustments to your customers, highlighting the value they will receive in return. This open dialogue can help build trust and understanding, reducing any potential concerns they may have about the increase.
By striking the right balance between pricing and value, you can ensure that your business remains profitable while continuing to provide high quality products or services to your valued customers.
Consider adopting a remote workplace
With the fuel subsidy removal having a serious ripple effect on the operational and energy costs to run a business, now might be the best time to consider taking your business remote.
If there is anything we all learned from the COVID-19 pandemic, it’s that a lot of work can be done from anywhere in the world as long as you have a good, working laptop and a stable internet connection. And in this time of higher fuel costs, taking your business remote will not only benefit you but your employees as well.
Transitioning to a remote workplace will not only help you cut back on energy costs and extra rent fees on office spaces, but also help reduce the transportation expenses for both you and your employees.
You can start by implementing a gradual approach, perhaps beginning with one or two days of remote work per week.
At EZAdvisory, we have been a fully remote company since day one, and it has brought us numerous advantages. We are well-equipped to assist you in seamlessly transitioning to a fully functional remote company.
So, if you need advice on the steps to take before trying to take your business remote, Book a one-on-one consultation call with our experts.
Communicate with your staff
Just as you’re stressed and concerned about how your business will fare in this post fuel subsidy era, your employees are also experiencing the same intense anxiety and stress regarding how this might impact their jobs and lives.
It’s important for you to communicate with them openly and honestly about the situation and work together to navigate any challenges that may arise.
Let them know the current situation from your perspective and reassure them that you are doing everything possible to ensure a successful recovery and navigate this challenging era.
By doing so, you’ll not only alleviate a great deal of stress and anxiety from their shoulders, but also instill renewed hope and energy in them to work even harder for the success of your business.
Beef up your marketing (no time for marketing that doesn’t being result)
There has never been a better time than now to ensure that your business is generating sufficient profits. This is not the time to focus on marketing strategies that fail to yield results or drive sales. You must be at the top of your game and double down on your efforts to create the right marketing strategy that delivers tangible outcomes.
While we understand your need to find ways to reduce costs amidst the uncertainty and challenging times brought about by the fuel subsidy removal, you should not cut back on your marketing efforts to the extent that your business begins to suffer.
Similar to your business strategy, it is essential to review and restrategize your marketing and sales approaches. You and your team should explore new ways to make your marketing campaigns work and benefit your business in this new economy.
If possible, consult with an expert to assist you in reevaluating your marketing and sales strategies. At EZAdvisory, we have experts who can guide you through these challenging times.
Be more on tab with following up with leads
Just as you need to be on par with your marketing and sales strategies now, it is equally important to ensure that you stay on top of your leads.
Follow up with your leads frequently, but be careful not to come across as overbearing or become a nuisance. Instead, create a well-planned timeline that allows you to effectively reach out to your leads while still being respectful of their time.
When following up with your leads, focus on how your business can help improve their lives during this time of high costs and services. Keep them updated on any new initiatives or changes you have implemented in response to the current circumstances.
By maintaining consistent communication and demonstrating the value your business can provide, you can nurture your leads and increase the likelihood of converting them into actual and profitable customers.
Start to consider other markets to get your products or services from
Consider sourcing your products or services from alternative markets if your current suppliers are no longer viable for your business.
If they have significantly increased their prices to a point where it becomes unaffordable for you or imposes a substantial cost burden on your customers, then it’s time for you to explore other options.
Although you can try renegotiating at first. Then, if you’re still unable to get a favorable deal with your existing suppliers, seek out new markets that can still enable you to deliver top-quality products and services to your customers.
By diversifying where you get your resources or markets from, you can potentially find more favorable pricing and maintain the quality standards that your customers expect.
Find a community of support where you can share your burden with others
Believe it or not, the fear, anxiety, and stress you are experiencing while navigating this fuel subsidy removal era are the same way many business owners are feeling right now.
Consider joining a community of fellow business owners who can provide the support you need during this time. Our founder’s community, for example, has members who have expressed similar anxieties, and the level of support within the community has been overwhelming.
By connecting with like-minded individuals facing similar circumstances, you can exchange valuable insights, share experiences, and find solace in knowing that others understand and empathize with your situation. Together, we can overcome these challenges and emerge stronger.
The removal of fuel subsidies has ushered in a new reality that we must embrace and adapt to. While we hope things will improve in the coming months with a reduction in fuel prices, it is crucial not to wait but to start taking action now.
By implementing these strategies—reviewing your business strategy, adjusting pricing, considering adopting a remote workplace, communicating with your employees, bolstering your marketing efforts, following up with your leads, and connecting with supportive communities—you can navigate the challenges of the fuel subsidy removal and position your business for long-term success.
Embrace the change, adapt, and seize the opportunities that lie ahead.