In the face of unemployment in Nigeria, more people are moving into the business world. There are entrepreneurs springing up each day, across the country.
However, some businesses crumble in the first year of starting up and their owners are back to square one. There is a long list of failed businesses in Nigeria. Ready to start your own business? Don’t lose heart. Here are 10 tips to prevent business failure in Nigeria.
Study before you venture into any business. Take time to know the intricacies of the business. You must understand what the business is about, what it needs on a daily basis and what the likely pitfalls are, before you go into the business.
For example, if you were to start up the business of selling foodstuff in your house, you should know that it is likely that your family members may from time to time take some foodstuff from your stock, because they see it as part of the provision for the household. So, you have to devise a strategy of separating household food from your goods, in order not to incur a loss.
Furthermore, you have to compare market prices, so that you know what market to get your wares from, in order to make more profit. There are so many things to learn before you go into a business.
You should know the general principles of business and the rules of your specific kind of business. Ignorance is one of the causes of business failure in Nigeria.
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1. Hire the right staff
Never skimp on quality when hiring staff for your business. Do not employ someone who is unqualified for a position, because you want to save a few Naira.
It will cost you more in the long run. The business is your idea and members of staff are the executors of your brainchild or your dream.
There must therefore make conscious effort to employ the very best hands to bring your dream to fruition. Each member of staff must be suitable for the position offered.
He/she must have some experience or be a quick learner, in order to move the business forward. Choosing your staff right may well be a solution to business failure in Nigeria.
2. Keep records of every business activity
In the beginning of most businesses, entrepreneurs keep financial records. However, as the euphoria wears off, they stop being diligent about their records.
This should not be the case. It is important to document the transactions that occur in the life of a business. Records show the history of a business, progress made, failures encountered, fluctuation in prices and profit or loss recorded.
Poor record keeping is one of the many factors responsible for high business failure in Nigeria. The importance of keeping records cannot be overemphasized.
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3. Avoid huge debts or loans
When starting any business or even in the lifespan of a business, it is wise to steer clear of heavy loans which may weigh down the business.
Loans require collateral and have a percentage interest and a fixed time for repayment. Yes, loans are meant to boost a business.
However, it would not be in your best interest to take a large loan, especially when the business has not begun raking in huge profits.
Inability to pay back a loan used as capital for your business is simply one of the symptoms of business failure in Nigeria.
The first few years of any business are usually the most difficult because the entrepreneur is trying to lay a foundation and get a place among people in the same niche. This is certainly not the time to take on more than necessary.
4. Have a marketing strategy that works
Every business requires marketing, no matter how small it may be. The size of the business determines what kind of marketing or advertising is necessary.
An international business or brand would require nationwide marketing and international marketing as well. A small-scale business may require a simpler marketing strategy such as advertising in church brochures and the use of word-of-mouth.
Nevertheless, there must be a marketing plan in place, to tell the world that such a business exists. Within marketing lie the causes of business failure and solutions.
5. Value your customers
Have you ever heard this saying –the customer is king-? Well, it is true. The customer determines the profit margin of your business.
A satisfied customer recommends your services to other people who in turn will patronise you. A dissatisfied customer, on the other hand, will dissuade others from buying your goods or employing your services.
Therefore, it is vital you appreciate and maintain a cordial relationship with your customers. Occasional discounts and gifts during festivities will go a long way in making them feel appreciated. Also, it is recommended that you be friendly and courteous to every customer, irrespective of class.
6. Plan ahead for the unexpected
Things happen and there is only so much one can control. So, always make room for exigencies. Save up for the rainy day.
Keep some money aside for the future, in case the economy crashes, prices sky rocket or you want to expand your business. Make plans for eventualities, be them positive or negative.
7. Study your competition
When people hear the word competition, they shrink in fear. Competition should not connote negative meanings to entrepreneurs.
Rather, business people should be spurred on to push beyond their limits and aim for higher goals. Rivalry helps people see what standards have been set and compete with such standards.
It also lets them work harder to surpass the competition. Instead of being afraid of or mad at the competition, learn from it and improve on their best.
8. Do SWOT analysis regularly
In any business, it is very important to do a SWOT (strength, weakness, opportunity and threat) analysis. This assessment reveals the strong points of a business, its weaknesses, opportunities that abound in the business and things that pose a threat to the business.
This analysis should be carried out regularly. Frequent SWOT test will let the entrepreneur know if the business has increased in strength or there are more threats to the business. It would also help determine if opportunities are being utilized to the fullest.
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9. Go for training and retraining
Every member of any given business must go for training and retraining often. The business owner and every other staff should be trained on various areas of making a business succeed. Refresher courses should also be given from time to time, to ensure that grey areas are made crystal clear.
The 10 tips to prevent business failure in Nigeria listed above are practical ways to ensure your business succeeds. In addition to this, I would say that consistency pays off. Keep working at making your mark and one day you will see the dividends of hard work. Have a successful business.Buy and Sell Bitcoin in Nigeria - Register for free on Luno
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