’SMEs risk collapse without operational structure’

Small and medium-sized enterprises across Africa face a significant risk of collapse if they do not establish robust operational structures, warns Nsikan Ubi, founder and CEO of Nubi Consulting. Many growing businesses, she explained, underestimate the importance of internal systems, often focusing on rapid expansion at the expense of organizational discipline. This oversight becomes particularly apparent as firms transition from early-stage operations to growth phases, where increased complexity exposes weaknesses in informal processes.

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Growth exposes weaknesses that are not visible at an early stage. When teams are small, informal systems can work. But as complexity increases, the absence of structure begins to affect execution and accountability.

"Growth exposes weaknesses that are not visible at an early stage," Ubi stated. "When teams are small, informal systems can work. But as complexity increases, the absence of structure begins to affect execution and accountability." She observed that many African SMEs struggle with unclear roles, fragmented communication, and inconsistent delivery as they scale. Companies frequently expand their customer base or regional reach without first strengthening internal coordination mechanisms.

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Strategy is rarely the problem. Execution is where most scaling businesses begin to break down.

Ubi highlighted a common misconception among founders: the belief that growth will naturally resolve operational inefficiencies. Instead, she cautioned, growth often magnifies these issues. "The assumption that growth will fix internal issues is one of the most common mistakes businesses make," she said. "If alignment is weak at the early stage, expansion only increases the strain." She added that businesses that successfully scale typically establish clear ownership structures, standardized workflows, and defined accountability systems before expanding.

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The assumption that growth will fix internal issues is one of the most common mistakes businesses make. If alignment is weak at the early stage, expansion only increases the strain.

This issue is becoming more critical as African SMEs venture into more complex environments, including regional markets and investor-driven growth stages. In Nigeria, where SMEs are vital to employment and economic activity, weak execution structures could undermine broader economic resilience. Furthermore, Ubi noted that investors are now placing greater emphasis on operational readiness, not just revenue growth, when assessing scaling businesses.

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Without clear direction, scale becomes disorder rather than growth.