Research has revealed that 80% of start-ups in Nigeria fails within the first 18 months of setup and this is basically because a lot of factors constantly fight against the success of business for example inadequate power supply, poor security, huge taxation and a host of others.
Being an average Nigerian is already a whole lot of work and you put in so much to survive, if you are a Nigerian reading this, you know what i mean and sometimes we pull through and live like nothing happened. thumbs up to us jare. Tougher it is when it comes to setting up a business and making it succeed, it is even a lot easier to start but a bulk of the work comes in when you have to sustain your business amidst the turbulent business environment.
There are a couple of common mistakes Nigerian entrepreneurs make that cost them their business in less than a year of startup basically because of ignorance or careless oversight. I will highlight a few of them and show us what could be done to either avoid making such mistake or making amends after getting it wrong.
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1. POOR STRATEGY
A business Strategy reflects the plan for your business, how you want to start, sustain and grow your business in the industry. Businesses don't succeed by accident, they take deliberate measures to do so and as such you should have a strategy document, quite different from your business plan. You could use the SWOT or PESTEL analysis to formulate your business strategy.
2. POOR FINANCIAL KNOWLEDGE
A large percentage of entrepreneurs in Nigeria stumbled upon business and as such have little or no financial knowledge. As a business owner, you should know the difference between assets and liabilities, creditors and debtors, loans and overdrafts, simple interest and compound interest etc. You should also know what a financial year is, have a current account for your business. Attend financial trainings and seminars to further equip you with financial knowledge because if you are starting small, you might have to be your own financial officer or accountant and even if you already have one, you would need the knowledge for checks.
3. POOR STAFF QUALITY
If your business is starting big or expanding, you would need competent hands and a very effective team of employees to help your business succeed and sadly in Nigeria that is a big challenge because to start with, a large percentage of university graduates are unemployable, they apply for jobs with poorly written Cvs and even if they manage to pull through the recruitment stage, they get to exhibit a high level of incompetency.
To solve this challenge or avoid this mistake, hire for character and train for skills. People are bound to get better when they are told and shown what to do and overtime, you will not have to worry about them. Train your staff and put a structure in place for operations.
4. POOR STRUCTURE
When there is no structure for your business, the business runs you instead of you running the business, some businesses cannot even expand because whenever the owner is unavailable, nothing can be done. There should be an operations manual for new recruits and existing to follow and implement. Your business should have quality standards that it operates by and quality should be controlled by means of rewards and sanctions. Rewards for those that have done well and sanctions for employees who misbehaved in anyway contrary to the standards.
You cannot always be around and do everything yourself, structure is there to make sure that even if you are not available, things will be done just like you were there.
5. POOR UNDERSTANDING OF MARKET NEEDS
A large percentage of business owners choose an industry because it is perceived as profitable and as such they venture there without understanding market needs. Never assume you know what customers want or need, do a thorough research of what they need and how your business will be of help to meeting their needs. Conduct a feasibility study to know how profitable the business will be in your environment. Take your time to understand the market needs because customers taste differs and change with time.
6. POOR PRODUCT QUALITY
You can only sell a bad product/service once and it takes only a matter of time before the news travel fast and far to ruin your business. Poor product/service quality is bad news waiting to happen and it is something you should avoid as much as you can. A lot of businesses don’t see it this way that is why they compromise quality for profit. Engage in quality products and service so that the profit you get from bad products doesn’t end up wasted on making amends.
7. POOR PRICING
Too high or too low pricing affects customers purchase. Don’t undercharge or overcharge for your product/service, consider the customers purchasing power and also note that:
• Premium products should attract premium pricing
• Basic products should attract basic pricing
• Average products should attract basic pricing
8. POOR CHOICE OF LOCATION
Consider accessibility, nearness to labour, nearness to raw materials, security, and power supply amongst other factors before you locate your business. Do not allow cheap rent tempt you, some locations are not good for your business. You need to also looking out for your style of operation, demography, parking space etc.
9. POOR RESEARCH TECHNIQUES
Many businesses are still running with the same operations as five years back, do thorough research, look out for new ways of doing things, employ currents methods of running businesses, use the latest software and technologies to advance your business.
10. POOR CUSTOMER SERVICE
You should know that businesses exist for customers and they want to feel important so as much as you can, treat them well, respect their choices and treat them accordingly, do not assume you know what they want, listen to them .
Have an effective customer retention service, don’t lose interest in a customer after the first sales, and communicate frequently with them.
It is an error for you to start a business and after a while, people stop hearing about your business. You should take deliberate steps to make sure your business succeeds, avoid making these mistakes and even if you have, take corrective steps.
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it is more beneficial for you to learn from teachers and more painful to learn from experience
Making your Business succeed is your business