Why Most small businesses fail in Nigeria - And how to Avoid the odds.|| EPISODE 2

 

A research was carried out by me, and I discovered that most businesses fail because over 65 to 70%  of business owners don't have a clue about the business they are venturing into.

They just get impatient with researching such business techniques,  patterns, trends, and similar business failures, and how to overcome them. 

its not about the capital. But the craftmanship of sustaining the capital during the course of business operations. 

Ideas aren't enough; just know that ideas are raw data that need modifications.  Two things;

I. These modifications need to meet several factors, like trends, current demands, competitive market, and your market penetration/target audience.

ii. Modifications are subject to updates from time to time in order to suit the current needs. This part needs critical thinking. 

Now, some other factors that contribute to business failures in Nigeria, which are to add to Episode 1, are ;

1. Visibility on social media

This has come to stay. yes, it has. Technology is a major tool for changing and transforming any business.

I can remember years ago where people had to pay heavily to radio houses so that their businesses could be promoted. This is not the case in the current world we live in. I'm not saying that patronizing Radio houses and TV stations is bad, but the technology of today makes life easier and businesses more approachable.

  Social media is your platform to sell yourself. It's your opportunity to put yourself and, product for the world to see. It's your chance to define yourself more elaborately and brand your product to reach a large audience. 

 If someone wants to know you and what you do, your social media handle should be able to tell them.

I can remember when an agent contacted me to help them recommend a furniture person to handle a major job for them. I dropped that info on my WhatsApp status, and I got lots of messages. I told them to drop their social media handles, too. To me, it is an avenue to cross-check what they claim to be. After checking, I picked a fellow who has branded himself so well, by posting his jobs online, including videos of the processes and finished products, was comfortable with him because of what I saw online, which looked really convincing. (Mind you, scammers also do the same). 

I went ahead to recommend him.

Two months later, I stumbled on one of the furniture persons, who unfortunately didn't get a call from me. he lamented that he needed the job, and he even volunteered to reduce the price as well. Hmmmm.

That was not what surprised me, he went further to say that the person I picked was his boy who he taught the job( apprentice).

Life! A smart apprentice indeed. the young man leveraged social media to get what his master couldn't get. 

It's not everyone who stays in your neighborhood that will stroll to your shop and check out your products. but it's possible that everyone can stroll to your social media, including the algorithm, to check out your products and services.

The sweet part of this is, you don't need a shop to make sales on social media. you just need to build trust and consistency.

 Leverage this and boost your relevance.

2. Operate Legally

  A lot of businesses in Nigeria are operating illegally. worse of it is, some have been operating a limited liability company for years without recognizing that that business is calling for danger one day.

Operating a business without a license is taking the wrong path without even a backup.

To attract top clients, you need to register your business with CAC. Some clients go as far as checking your business in CAC, to be sure they are not entering the wrong hands. Anything legal automatically instills confidence.

Legal registration of a business shows you are the owner of the business, and it also protects you from external influences and it boosts your confidence level.

Your ideas need some sort of legal protection. be it intellectual property, brand name, logo, etc.

please register your Business to avoid stories.

No matter how small or large your business is, there is always a package for your business registration.

3. Be careful with loans

Getting a loan to start a business is very tricky. That's what you were not told. 

Especially when you are starting a new business for the first time, and you don't really know your way around it, except that luck is on your side. And who goes into business because of luck?

For me, getting a loan should probably be for the purpose of expansion of an existing business, and not a starting one, or if it is a starting one, the principal should not be so large.  A moderate rate is good to ensure that the refund and interest will not be an issue.

else, you will use your profit to settle debts.

  I know of a lot of businesses that have folded up because they couldn't meet the target.

Many are struggling to pay back debts due to financial constraints. 

we need to understand when to use the business loan option.

 Don't use loan to set up what you haven't mastered  yet

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