Entrepreneurship have never being an easy journey. That’s mostly the core reason 80% of the world population shy away from it. They’d rather be an employee who has a more guaranteed income than an entrepreneur who hopes. In business, challenges and uncertainties abounds and if you venture in without knowing the risks and challenges, you might be heading to a doldrum. Being ignorant of these business challenges is the main cause of business failure in Nigeria.
The purpose of this article isn’t to scare you away from owning a business in Nigeria, it’s to equip you with the right tools and knowledge needed to establish a successful business. There are many reasons for business failure in Nigeria, I’m going to disclose them and at the same time, help you into avoiding them. Avoiding them is avoiding failure.
REASONS FOR BUSINESS FAILURE IN NIGERIA
1. LACK OF CONSULTATION
Before I started my first partnership business, I met lots of business consultants who are successful in their business field. Their advice and guidance was of tremendous help; in such a way that the business had no choice but to be successful.
A lot of prospective entrepreneurs make this mistake all the time. They believe that with a capital, they can start-up and end up successful. The work of a business consultant is to help you detect problems that might arise and help offer likely solutions to them. Not only will they guide your steps in business, they will make sure there’s a fresh idea on your business outlook.
They helped me into increasing my business productivity level and to be honest, that was a huge milestone.
2. POOR LOCATION
This is the major reason for business failure in Nigeria. In all my business startup articles, I always emphasize the need to make sure your business location is strategically situated and close to target market. No matter how great your facilities and customer relation are, chances are that you’ll close down if your business isn’t at the right location.
This is why I always urge running a feasibility study. In the course of your analysis, you’ll be able to determine which location is best and why they are the best for your business.
3. LACK OF PROMOTION
Have you ever wondered why big companies like Coca-Cola, MTN, Airtel, Peak Milk etc keep running advertisements despite the fact that they are household names and already known? The success of every business venture is tied to its promotion strategies. Unfortunately, many business overlooked that and it has contributed to their failure in business.
Business failure in Nigeria is on the increase, that’s because the big companies maximize the use of advertisements while small businesses don’t see the need.
4. UNSEPERATED BUSINESS ENTITY
If your business doesn’t have its own persona different from yours, if your business is not separated from you as an entity, you might never be successful in business. Someone contacted me recently and asked me to borrow him some money. At the moment, my personal account was on red. I told him I’m not on money and he was taken aback.
“Henry, everyone knows that you have a business and that it’s successful. What do you mean you don’t have money?
Well, i told him I and my business are two different entities. My only share is the remains of the profit after all the employees have been paid. When all challenges have been solved. In business, you have to remove every atom of sentiments to succeed. Don’t sell on credit because they are relatives or siblings.
5. POOR CUSTOMER RELATION
One of the reasons for business failure in Nigeria is when customer relation isn’t taken seriously. Customer is and will always remain king. Your business success is tied to them. How do you treat your customers? How’s your customer service?
I was in a shop recently and guess what, the seller’s face was frowned to the extent that she didn’t bother to respond to my greetings. I began to wonder if she knew me from anywhere. Perhaps I had angered her in the past.
She was feeling like a king, like she was doing me a favour by being in market. Well, i walked to the next shop to get what I wanted. As long as I’m customer, I’m the boss and you dare not treat me less. That’s how customers feel. Make sure you pat their kingship always. Make them feel special and you’ll remain in business.
6. LACK OF FUNDING
Another contributing factor to business failure in Nigeria is when funds are lacked. This is another reason a feasibility study is a must. Before you start that business, you must have lots of capital, even more. As a new business, emergency can spring up anytime which will require money to solve.
After setting up a business, make sure you have extra funds reserved in the bank. This is the part where I urge leaving money in the bank. This will help you stay afloat in business, even ahead of your competitors.
7. QUITTING TOO SOON
A lot of failed businesses had the chance to be a booming venture, but because of challenges and problems, their owners quit. Sometimes, we don’t need funds or all the technical know how skill to be successful. Sometimes what we need is patience. With it, we can hit the gold. A big company like Coca-Cola made $200 on their first day and yet, that didn’t deter them.
The greatest tool you can have as an entrepreneur or a business owner is A FIGHTING SPIRIT. This is what gives you the reasons to be in business when there are millions of reasons to quit. Business failure in Nigeria can be averted by forging ahead despite all odds.
Nigeria is a land of milk, there are opportunities lying around, waiting to be harnessed. You can only tap into this by pressing further in business. In the mist of challenges, we should keep pressing forward. When we fall, we rise up and try again and again until we make it. Through failure, we learn. There are other reasons for business failure in Nigeria, but they become nonexistent when we are desperate to succeed.