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.
A friend of mine in Nigeria who started manufacturing tissue paper as it is popularly known in early 2011 has a very good passion to start a business. He is educated with an edge to succeed. He started of his business and everything seems so good at the first 4 months. After sometimes he begin to have some difficulties from few customers to low account statements. It affected his business and mindset which transforms to the overall business. Within some short period of time, he is going bankrupt and finally quits. I met this young and vibrant entrepreneur and we had some conversations. He told me how things were and how it led to his failure. From all the things he was saying, I gathered that he was just giving unrealistic reasons from this environment is not good for business to the people don’t like my product.
After a careful study, I told him that you have a very gob business mindset and you are willing to take a risk in business. I asked about his managements, he gave reasons, I ask about his accounting , he gave another reason and then I asked about his marketing strategy, he paused for a while and said that he only calls potential customers when he deems fit to do. From all that I gathered from him, I realize that he has not been good with some of the fundamental aspect of business. I gave him the ideas and how he can achieve that, from having a good team to challenging your team, being ahead of your business, think further and have a better picture of the market. He thanked me and later moved in to business again.
Many
things affects business to fail in Nigeria but I am going to share to
you some of the core factors that affects failure of business in
Nigeria.
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 of 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. Banks in Nigeria now, require a business plan for some SMEs start-ups if you are willing to take a loan. You have to make 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. 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 to understand or meet your target customers, how do you expect them to reach at to you? Don’t do that. Research and have a good knowledge about the Industry. 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. |
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. Marketing: A very major aspect of every business management. Many Businesses have failed in Nigeria simple because they are not interested in marketing or advertising their product. Have you ever wondered why MTN, GLO, PEAK MILK, NESTLE, and many other 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. |
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. 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 |
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