Why Sustainability Eludes Indigenous Construction Companies In Nigeria
Have you ever wondered why indigenous construction companies don’t have a decent lifespan? Wondered why they don’t even make the 25 year mark in spite of the massive efforts they make? The answer lies in two simple facts:
- Most construction companies were not founded deliberately, they were founded opportunistically that is in response to a positive or favorable situation that happened mainly access to opportunity due to the emergence of a person or persons in a position of authority that in our clime is as unstable as you can imagine. So when the opportunity exists the company thrives, but as soon as the opportunity wanes the fortunes dip as the promoters are hardly able to use the opportunity in the first place to properly situate themselves and reposition along the lines of a proper business and thrive when the favorable opportunity is lost.
- Most importantly because of the above and the lack of proper insights and experience they pay out a whole lot more cash to manual labour and retaining also substantial cash which they regard as profit and finish spending down the line. So it is not uncommon to see a construction company which has handled sizeable projects and do not even have a wheel barrow or shovel not to mention a proper office address.
While one cannot question the motive of going into a business in whatever circumstance, doing it unprofitably can be questioned because it is not even in enlightened self-interest. If the promoters thought differently by making correct investment decisions they could end up having a business for life or a business they could sell and realise much more profit while at the same time guaranteeing the employment of some of the employees!
In part 2 I will show how done differently a lot more profit could have been earned, and we would have companies that last for more than 25 years even if the owners changed ever-so often. SUSTAINABILITY!