in Nigeria do not survive their first year of establishment due to several factors. With the rising unemployment curve
in Nigeria, many Nigerians are delving into the world of business
, not knowing what awaits them.
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Most often, their businesses don’t thrive as expected due to ignorance of their own parts. However, a few others have managed to stay head above water, remaining relevant for a very long time.
In this article, I examine 7 ways to avoid the pitfalls of business failure in Nigeria.
Make In-depth Findings Before Venturing Into Any Business Niche Or Industry
One of the reasons many Nigerians fall into the pitfalls of business failure is that they lack accurate knowledge of the business they ventured into. In their impatience, they ventured into the business without background study. They don’t understand the tricks and strategies in getting affordable and mass products from manufacturers, neither do they know to manipulate the price and keep customers. For every business, there are tricks to success. It’s advisable to seek counsel from successful business people who’re already doing well in the business you plan to venture into. Sometimes, you can serve as an apprentice to successful businesspeople.
There Are No Family And Friends In Business
Separate business from family and friendship. Many people make the mistake of being soft towards debts owed by family members and friends. Most often, they sell on credit at the expense of their business growth to friends and relations. For example, if you’re into the foodstuff business, separate your goods from family provision otherwise your foodstuffs will be consumed by family members as part of the family provision, without pay.
Hire The Right Staff
Avoid hiring your staff on the grounds of bias, sentiment or sympathy towards unqualified people, especially friends and family members. Be objective with your business growth and hire the right hands to work with. Businesspeople find it hard to fire incompetent staff, closely related to them. However, if you’ve family members and friends who’re competent, hardworking, and qualified and they understand the rudiments of business growth, they should be employed. It can lighten the burden and make you easily give trust. Your employees must be best suited for the positions they acquire and they must be able to execute your dreams and ideas.
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Ensure Accurate Record Keeping Of Every Business Activity
When you’re not diligent about keeping records of your finances and day-to-day business activities you’re bound to hit the rocks. This has been one of the reasons why businesses fail before they reach their third year. Most times, small businesses fail to keep appointments with customers and investors because they run their businesses without any sense of record keeping. Some businesses fail to attract or secure funds and grants because their books are not in order.
Learn to have emergency funds for your business or better still ensure that your business is covered by insurance so as to be better prepared during a business crisis. Also, in a country like Nigeria where the economy is unstable, you must be ready to innovate in the face of an economic downturn. For example, if you’re into baking and selling bread and the price of butter increases, look for alternatives to butter such as fat, which might be cheap.
Avoid The Debt Or Loan Trap
When starting a business, it’s advisable that your capital is mainly sourced from your personal savings, gifts from friends and well-wishers rather than from commercial institutions. It’s not wise to endanger a small business with huge loans. Huge loans can be applied for when the business is raking in enough profits. Most often, it’s best to seek loans when your business reaches a state where you might not necessarily put up your business as collateral.
Prioritize Customer Relationship Management
Customer relationship management, also known as CRM, deals with the total relationship between business owners and customers, and how the relationship serves as data for strategy, planning, and feedback for the businesspersons. Many businesses fail because they fail to involve customers’ feedback in decision-making processes. Also, businesses fail in Nigeria because their owners fail to follow-up customers, thus failing to make them loyalists.
Featured Image Source: Mike Raybone
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This article was first published on 19th August 2021