Setting up business close to a university campus; the pros and cons

Despite the infrastructural gaps and challenges on the continent, SMEs in sub-Saharan Africa are not only thriving but are also helping to reduce poverty.

A September 3, 2015 Borgen Magazine report states that SMEs have become the pillars of the economy ‘In fact, they produce 80 per cent of all jobs and represent nearly 90 per cent of all businesses in sub-Saharan Africa,’ states the writer Andrew Logan.  

The unemployment and underemployment problem in the organized sector in Africa is nothing new and as a result more and more residents are setting up small businesses.

Dionne Obodo is a university graduate but despite her qualification, she is currently self-employed – but that in itself does not guarantee success as several factors have to be considered when planning to set up a business.

The location of a business is as important as the business itself.

A BBC report titled ‘the importance of location’ has this to say ‘Location decisions can have a big impact on costs and revenues’.

In Patience Osula’s opinion ‘Setting up a provisions store on Nineteenth Street close to the University of Benin was a great decision. Though it did not appear that way at first because I was driven from the former location as a result of the demolition exercise embarked upon by the government’ she states in Pidgin English.

Mrs. Okonkwo who has a fruit store on the same street is in agreement. She says she gets more customers when students are in session but not as much the number of customers Patience Osula gets when the school is in session. According to Patience, she gets between 40-50 student customers during the school session and about 10-20 student customers when they are out of session.

At the University of Ghana in Legon, managers of a private hostel called Evandy which is metres away from the main campus, are also smiling to the bank due to the strategic location where their hostel is located but it is another story in a particular situation whereby the location though strategic has some fundamental problems.

A gentleman who operates a barber’s shop on a road close to the Benson Idahosa University, Benin-city is rather unhappy at the state of the road where his shop is located as it floods during the rainy season and therefore cuts off quite a number of potential clients. “The government should come to our rescue and fix the road,” he pleads but as is expected with leaders in that part of the world, his appeal may not be answered any time soon. 

Dionne Obodo gives another reason for caution for those who might just want to rush to acquire a store close to any university campus. “It’s neither a good or bad idea.  It really depends on the type of business and its advantage to its core market share.  E.g. a restaurant or a cyber cafe will benefit from that location positioning whereas a mail room may not readily do so”.  

Chin Nora Bongka, Programme Manager, Trinity Foundation Yaounde, Cameroon says that she likes the idea of businesses being situated near campuses. She goes on further to highlight another group of stakeholders i.e. the students themselves. “I think it is a great idea for businesses to be located around universities because it gives students the opportunity to have part time jobs while going to school thereby grooming their professional skills as well as reducing the weight of sponsorship on the parents but it also depends on the kinds of businesses because bars or snack shops are a no because they’ll only provoke misbehaviour from the students and lessen their focus on their studies. Even though they can also offers jobs, their negative influence is not worth it,” she said.

Mama Joy sells cooked food, inside the Delta State University, Asaba Campus and she gives another reason why it may not be worth it i.e. to set up a business close to a university campus.

“I do not see any big deal for one to do business within a campus.  I have another shop outside where I make better sales. I am not making great sales especially due to the constant university strikes,” she says. That statement is certainly something to be considered as countries like Nigeria tend to be affected as members of the academic staff unions while stating their demands are likely to embark on strikes and the effect is felt not only by campus business owners but also by students.

“When I resumed at the university for my first year, I was greeted with a six months strike barely two months after. Even though I studied a four year course I ended up doing it in five years because of two six months strikes,” says Wengbe, a graduate of English Language of a first generation university.  

That being said, even when the matter of location has been settled, potential SME owners do also have to carefully consider other significant factors while deciding to set up a business.

By Efe Omordia