No entrepreneur sets out to fail despite the risky nature of startups in Nigeria. Every business owner establishes their enterprise with lofty visions at heart and hopes for the future. Then why do small businesses fail in Nigeria?
In a country like Nigeria, where unexpected events can hit you below the belt and render one helpless, you should be more prepared and vigilant. It is commonly said that once a business exceeds the first five years of its establishment, it has survived the perilous stage and it is bound to succeed in the long run but some business hardly scale through this phase and it is saddening.
There are a lot of reasons that can be attributed to the failure of small businesses but here are 5 common ones that we can relate with:
One of the major reason why Small Businesses Fail In Nigeria is lack of funding. The lack of money can have a devastating effect on both the business and the entrepreneur.
Without enough funds to run the business, there will be accumulated debts, limitations and financial hardship which can cripple the growth of the business leading to an inevitable downfall.
You can address this challenge by seeking alternative funding like low-interest loans, personal savings (if any), financial support from family and friends, and applying for entrepreneurship grants. Read our article on how you can raise money to start a business.
Poor business management:
A good idea is most likely to fail woefully if it is executed by the wrong person. Starting a business is easy especially when there is enough capital to back it up but managing it requires discipline, effective leadership, business sense and a high level of accountability.
As a business owner, there are business leadership skills that you must adopt if you want your business to thrive amidst all opposition and competition. You must be able to manage your cash flow and keep tabs on the financial aspect of your business else it will become difficult to account for your expenses and pay your workers.
Learn from successful entrepreneurs and businesses that have failed as well. Learn the lessons and emulate the valuable skills that will grow your business in the long run.
No online presence:
Another reason why small businesses fail in Nigeria is lack of leveraging the online space to grow their business.
In this jet age where technology has made life easier with social media fostering friendship and business connections, lack of social media presence can make a business to fizzle out in no time. Having an online presence helps you to create and build brand awareness, reach out to more customers and increase your sales exponentially.
Although managing several social media accounts can be overwhelming, you should seek the help of a digital marketer or limit your business pages to 1-3 accounts, Probably Facebook, Twitter and any other social media app that complements your business.
Undermining the importance of social media marketing can spell doom for small business owners. According to Justin Butlion, stores with a social media presence have on average 32% more sales than stores without an online presence. (www.bigcommerce.com)
If you do not want your business to plunge into obscurity, salvage the situation right now by creating an online presence and intensifying your marketing efforts. Or you can employ the services of an expert to help you do that Your customers are waiting.
positioning is critical to the success of any business. No customer wants to go through any form of physical stress before they can get what they want especially when the money to purchase it is readily available. In times like this where people prefer to purchase goods online to save time and stress, situating your business in a wrong environment is downright risky. Before you choose a location, ask yourself, is this environment accessible? Are there more competitors here? Does the product and service I render complement this vicinity? Is it a safe location or a high crime area? Even if you have the best products and render amazing services, if you are in the wrong physical location, that business is at risk of folding up.
Lack of planning:
running a business is not instant noodles, it’s fierce competition out there where you either go hard or go home. This is Nigeria! If you do not have concrete plans, your competitors will pull the rug off your feet and send you home. You cannot run a business with a pinch of salt and expect to conquer like a Lion. You need a careful, strategic and deliberate plan that covers every aspect of your business such as capital, marketing and promotion, products and services, staffing, vision and mission, customer’s needs, growth and expansion, managing income and expenses, and competition. You don’t start a business before planning; you plan first and execute the plans fearlessly. Lack of planning makes a business owner incompetent and unprepared for what lies ahead.
‘Failing to plan is planning to fail’ Allen Lakein
Businesses are risky ventures that require both physical and mental investment. Experiencing business failure can be very discouraging but you can minimize the possibility of that happening by considering these factors and making the needed changes to keep your business safe. May the odds be in your favor!