Good customer relations, transparency panacea for SMEs failures –Somorin, Co-founder, Meat Arena
Two brothers, Oluwole Somorin and Kehinde Somorin, are Co-founders of Meat Arena Nigeria Limited, a startup that specialises in processing and sales of livestock under a most hygienic conditions. As partners in the business, the Somorins opined that government should reduce the cost of NAFDAC registration, signages, if startups must be encouraged to succeed amidst a myriad of other challenges. They spoke on their staying power in business, while projecting into the future.
It all started when we were thinking about what we can do differently. If you want to make money, you must start asking yourself what can you do differently. We have friends who are into different startups. We know how meats are sold in the market and we asked how can we do the business differently and also have it sold at same price with what you have in the local market. So, the idea came to me that we can actually have meat processed and sold under hygienic conditions, unlike what you have in the local market. What we are selling is hygiene. We sell at the same rate you get it in the local market. I am going to cite Uber as an instance. If you are to take a yellow cab, you have to start negotiating for the best price. You may even pay more than you were meant to pay, at the end of the day. But for Uber, you pay per-minute for the trip such that you don’t get cheated and the driver doesn’t get cheated too. You two also get value. That’s the case here. We buy rams in large quantities from the north and we kill and sell. It will amount to being penny wise and pound foolish if you don’t think you can get it at best prices from us. We must have weighed it before selling to you. We also make people share a full ram. We sell at low prices and we basically sell hygiene.
We were into other businesses before we started up here. My passion has always been food and it was easy to raise money from our other ventures to start up. We have an IT business and a car sales and hire business. We also deliver across Lagos. We intend to get bikes for effective delivery. Logistics is a challenge for now but we have a lot of customers that still patronise us.
The major challenge we face so far is power. We don’t find light as often as it should be. Let say it has improved now but so far, we run on generator a lot and we spend so much money to power our big generator sets just to ensure that our goods are well frozen and they don’t get spoilt. We have been moving forward in the business except for the challenge of power.
Customer base and patronage
So far so good, we have not had any complaint about pricing. We sell about 1.5kg of goat meat for N2,500 where you can have about 12 big pieces of meat. In fact, when we are out of stocks, people still place orders. We buy in large quantities from the north and that reduces cost. If a ram is worth N15,000 and the processing fee makes it N18,000, we just have it into different portions and that’s how we sell so that people don’t feel cheated. At the end of the day, we can be making like N5,000 on a goat. We have never had any complaint from anyone. In fact, people have been pressurising us that they want us to start selling pork meat. Everybody is our customer. We may not have the capacity to go into supplying hotels for now, but we will soon go that way. For now, we sell to individual customers. The hotels and eateries demand large quantities but we have to be sure of what we are doing before we go to them.
The customers keep coming due to the quality of the meat we sell to them under a transparent system. The quantity is also something that keeps them coming. Another is about customer service which is very important for any business. It is about how you relate to them and how you serve them. It is different from what you get when you go to the local market. When you come here, we take you to our abbatoir where we keep the rams and you get to see all the hygienic processes it passes through. You get to see that it is different from what you see at the local markets where flies fly around what you want to eat. While we are precessing the meat for you, you could take a seat, watch TV and we could even serve you coffee. While waiting, we also interact with you. With that, you will be happy to refer more people to us. I feel before you could put up such business, you have to think of customer relationship first.
This is a large business because we intend to go into poultry farming ourselves. We can start rearing and selling to people. Then we can be selling much cheaper to people. That would require huge funds though. It is a very big business. The capacity of fund that that would gulp, if we must invest hugely, is about N10million. I don’t believe in rushing into things. Let’s take it from stage to stage. I believe in organic growth, not just about investing an additional N10million into the business.
Loans for investment
We have never gone out to seek for loans to expand the business. We are looking at that direction, anyways. We were almost approaching the Tony Elumelu Foundation before we found out that it had close already. We are watching out for the next edition.
It is profitable but not like having a wide profit margin. As I said, the major challenge has been electricity. We tend to spend a whole lot on powering generators and that takes away most of our profits. We need to keep the stocks fresh so we use a very big generator.
Before we started the business, we went ahead to carry out some research and we saw a couple of people in the business but I don’t see them as competitors. In this area, I think we are the only one around. The market is big enough for everyone to sell, depending on your core values. We are not feeling threatened at all because we do more things. We do grills and we also have a lot of products that we have not even developed. We started asun in December and it sold out. We now have an idea to prepare it half done and prepare fresh pepper sauce and you go home and make it yourself. That is a new innovation you know. We also intend to go into so many other things but we are always conscious of NAFDAC. You don’t want to keep churning out products and NAFDAC comes around and shuts down the business. Anyway, we produce fresh.
We have a lot of customers spread across Lagos but we want to be well known in our immediate environment first before going to other parts. Of course we have customers everywhere in Lekki, Surulere, Ikeja and the rest but they have to order something substantial before we can send to them because of the delivery fee. We have hardly had a customer not feeling satisfied. Okay, a customer once complained that she didn’t like what she got and immediately, we told her to dispose of it and we immediately killed a new ram and sent to her. You always get it fresh.
Government’s intervention in startups
Government should start by reducing the cost of signages. NAFDAC approval is always an issue for SMEs too. Sometimes, when this comes cheap, you discover that certain bottlenecks won’t make it easily accessible for you. Government can mitigate these challenges for SMEs if they are excluded in such registrations. Small businesses like these help in tackling unemployment. Even if it is two to three people you are able to employ, at least, it goes a long way in reducing the challenge of unemployment. They should always consider startups. I heard the Presidency is starting an initiative that would promote SMEs in livestock. I think that would be a good one.
In the next five years or so, we would have grown very big because what we are planning for the business is a huge one. It would make it go everywhere and soon make us become a household name.