For all the excitement that surrounds Nigeria’s booming startup culture, only a few of the new market disrupting revolutionary ventures (if they’re what they claim to be) actually survive long enough to make a mark on the economic landscape. The failure rate of small businesses is fairly high in even the most business-friendly countries. In Nigeria, this grim fact takes on an apocalyptic look- popularly quoted figures suggest that about 80 percent of small businesses in the country die before they are five years old. Statistics like this would put off squeamish and risk-averse people from trying out something other than a 9-5 job. But for many, there’s no choice. For them, it’s entrepreneurship or nothing.
If you run a startup and you’re hoping that your venture doesn’t join the eclectic host of dead enterprises, you’ll give your startup a big chance of pulling through its early stage unscathed by following these steps.
- Be sure that you’re passionate about what your startup does
It’s going to be really difficult to get through the hard times- and they’ll surely come -if you don’t have an internal motivation for what you’re doing. Your startup should be one that solves a problem that you actually care about. If your involvement in business is driven solely by the desire for monetary gain, your startup is unlikely to survive the testing storms of repeated rejections and failed missions that will crop up along the way.
You’ll be hard-pressed to find a truly successful entrepreneur who hasn’t been inspired, at least in part, by a genuine desire to tackle a problem they thought was important. Think
Achenyo Idachaba, founder of Mitimeth, a social enterprise which creates commercial products from invasive water hyacinths; or
Chris Kwekowe, the young techpreneur who turned down a job offer from Microsoft to build Slatecube, an internship placement and staffing startup. The defining motivation for them wasn’t the desire to rake in huge sums of money (although there had to be significant pecuniary benefits to make their sacrifices worthwhile), but by sheer passion to make people’s lives more comfortable.
- Be sure your startup idea is viable
If it’s not going to bring cash in, then it’s not worth starting up (unless you intend to run a non-profit organization).
But you can’t always be absolutely certain that a venture is going to generate enough revenue to remain a going concern. As many entrepreneurs know, the road to such certainty is littered with false starts and failed projects. For example,
Seun and Seyi Abolaji, founders of beverage company Wilson Juice, fell into dire straits after their first business collapsed. They started out with another one- selling fruit juice -with just N2,000. Today, after a number of transitory modifications to the original business model, their company records millions of naira in annual revenues.
But some entrepreneurs are able to see their first business through to greater significance.
If a business idea isn’t designed to solve any real widespread problem, then you can be sure that there’s no market for it. Let it pass, and replace it with a better, potentially viable alternative.
- Have a reliable source of funding
What sort of revenue model does your startup have? Does it generate enough on a regular basis to pay for running costs? You will have to deal with these questions if you’re going to get your startup into a financially stable position.
It’s probably not a good idea to go seeking after seed capital from angel investors when you haven’t gotten to the point where it’s either making profit or is showing obvious signs of potential profitability. They’re probably not going to give your proposal a second look unless you’ve proven that it will give them a good return on their investment.
Ahmad Mukoshy, founder of web hosting company Gigalayer
points out that investors prefer to put their money into businesses that have already demonstrated their viability.
“Nobody wants to give you money to do just anything”, he says. “You can get money if you prove that it’s possible to do what you’ve said you’re trying to do.”
Mukoshy, like many other successful entrepreneurs, advocates bootstrapping for early stage startups. He prefers that entrepreneurs fund their budding ventures with their own savings, as well as loans from family and friends.
- Acquire the knowledge and skills you need to succeed.
Attend trainings and seminars that deal with topics and courses relevant to what you do at your startup. Acquire and sharpen relevant skills through learning and constant application on the job. You’re probably going up against strong competitors in your industry (even if you don’t realize it), so you’ll have to improve your management skills and service delivery. Many startups aren’t able to win investment from venture capitalists because their pitches reveal how ignorant they are of the markets and industries they’ve plunged into; their products and services also fall below the standards demanded by (potential) customers. They end up cash strapped and loaded with unsold inventory. The frustration arising from this self-inflicted predicament usually proves strong enough to bring about the erring startup’s demise.
- Build strong extensive partnerships
Meetup events aren’t just talking shops. They present entrepreneurs with an opportunity to connect with each other, share ideas and experiences, and establish mutually beneficial business relationships. Sometimes the partnerships started after meetings at such gatherings turn out to be the positive difference between remaining stuck in a low visibility rut, and breaking through to great opportunities for fast tracked growth.
There’s also the posibility of finding a mentor in one of these networking events. A lot can be gained by early stage startup founders from people who have more experience in the business terrain than they do- including advice, contacts and even financial backing.
As is the case with every other aspect of life, prudence is required by anyone who wants to see off the dangers that lie in wait for unsuspecting entrepreneurs in our unforgiving business climate. The businessperson who proceeds without it does so at their own peril. But there are success stories, and the victories they represent give us a good reason to press on with our entrepreneurial pursuits.
Related
You might also like:
This article was first published on 24th October 2017
ikenna-nwachukwu
Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.
Comments (0)
