Thursday, 16 June 2016

Why Businesses Fail In Nigeria And Solutions

Most Nigerian business fail after 2 or 3 years of start-ups.


In Nigeria the case is “if you can survive for 5 years, you have survived already”.
I have come across many Nigerians that gives many reasons why their business crumbled and some of these reasons comes from their lack of understanding what they do.
Business in Nigeria can be tricky, challenging, difficult and enjoyable at the same time. Most people enter business with the idea that it is going to be so easy and smooth. It does not work that way as there are many things to do apart from having the knowledge of setting up a business.

Many things make a business to fail in Nigeria but I am only going to share some of the core factors that affects failure of business in Nigeria.


1. Planning:
Most Nigerians only plan for how to start a business but fail to extend the planing on how to run and maintain the business for a period of time. They don’t set their mission or vision. They just depend on making profit which is not what business is all about. They fail to analyze the competition in the market and lack the strategy to tackle them. They never think about
marketing activities of their
business nor willing to spend
money doing that. They don’t
think about potential problems or setbacks that could occur in their businesses.
In case you don't know, banks require business plans if you are willing to take a loan. They have to be sure you have a detail plan and work on it for you to be successful.
Don’t underestimate the market or your competitors.
Think, plan, plan again , write it down, project it in a bigger picture, work on it, plan again and keep on working.

2. Poor understanding of the
Industry and Customer Target:
Many business in Nigeria fail for lack of understanding the Industry. Some start checking on the industry after starting off their business or when it begins
to affect them. Don’t do that. Do some research before starting and know your target customers, what they want and where they have been buying those things. You need to understand the industry and its target customers. If you fail to understand or meet your target customers, how do you expect them to reach out to you?
Research and have a good knowledge about the Industry.

3. Management:
This is a crucial aspect of every business. If you are starting a business in Nigeria or expanding your business. You need to hire
or have a very good team.
Employees as most company
usually says are their highest asset and this is very true. How good your team is will go a long way of determining how successful your business will be.
You have the idea but you can’t implement it all by your self and that is why you need a very good team. Hire people with skills in their niche and train them if needed and treat your employees good at all time.
Respect them, praise them
when needed and thank them
for doing a great work. They will be happy at all times and this will improve the team work.

4. Poor Accounting:
One of the fundamentals of
business management. You
need to have a very good
account record of your business if you really want to succeed in Nigeria. Monitor your accounts to know how the customers
react and how payable are they. You have to create a situation that will enable good customer relations and tell them the importance of cash and carry.
Watch your accounts properly and don’t just concentrate on the liquid cash in the bank.
Watch how the debits and credits are being done.

5. Advertising:
A very major aspect of every business management. Many Businesses have failed in Nigeria simply because they are not interested in marketing or advertising their product. Have
you ever wondered why big companies in Nigeria are always advertising?
Every one knows about these
businesses but they keep on
advertising their product and this is one of their secret of success. Every time you advertise your product or service, there are many people who are out there that are willing to try it. Don’t underestimate it. It is very important. and always budget money for all different kinds of marketing.

6. Poor Customer relations:
Many business in Nigeria do not relate well with their customers very well. They simply allow other companies to take away their customers freely. Give your customers the best treatments.
Hire a very good sales man that can convince a customer. Always smile at customers and don’t raise your voice on customer not matter how bad the situation is because your business is open for the customers. Control your anger as some customers have bad approach and use your knowledge in business to outsmart them. Treat your customers very well and they will be willing to come back again. The highest and the best advert a company can get is from a customer. When your customer refers your product to a friend or a family member. They must be willing to check on it. and this is the best advert and free advert but you cant achieve it if you treat your customer bad or cheat them. Be sincere, be honest, give them the best.

7. Poor funding or low cash
reserve:
Business fail in Nigeria because of lack of adequate funding and poor management of reserves.
Businesses run out money many times and this is a result of poor planning. You have to plan very well and know how much money you need to run a business for a period of time before cash begins to flow in. While running your business, You have to reserve some cash in the bank.
This is a very important aspect as many business men in Nigeria will tell you that money is not good to be in the bank.
Don’t listen to them as reserving money in the bank gives you a very good advantage over your competitors and also shape the way you succeed. You will have a high purchasing power when new technology or things springs up that needs emergency funding. It will take you many time to access a loan in emergency. Keeping some money also gives you a huge advantage in staying ahead against market crash. It makes you to position your self very well and you can withstand it.

Other factors that may affect
business failure in Nigeria are:
-Underestimating the
Competition
-Lack of innovation
-Giving up
-Failure to accept change
-Bad depth


While taking note of the above; keep researching and brainstorming to come up with new ideas to spice up your business.
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Model, Computer Techie, PR, Social Media Marketer, App Developer, Freelancer, Blogger! . . . Oh, I forgot to add Social Worker! Plus, I like writing my thoughts down! . . AND . . I LOVE making new FRIENDS! . . . Contact me on social media -- Rosy Omeje

3 comments:

  1. Nice points dear!

    ReplyDelete
  2. Gracias! Good Write Up. See also www.ajetomsblog.com updated with edu on business / entrepreneurship and making money ideas.... We blog it!

    ReplyDelete

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