The Micro, small and medium enterprise (MSME) contribute 45% of total employment and 33% of National Income (GDP) in Nigeria. As good as these analysis looks many individuals wanting to have small businesses fail in Nigeria because real facts have not been taken into consideration.
In this post, we will be exploring 6 major reasons why small businesses in fail in Nigeria.
1.Inadequate Analysis and proper study of Intending Market of entry
Inadequate analysis and proper study of intending markets is a major challenge for startups. Most intending business owners just want to start businesses because they want something to support their 8-5 office work, some just want additional income to Carter for their insatiable needs and of course at a time like this in Nigeria (Recession), one has to be doing something that brings more money into the pocket. These are some of the many reasons people startup businesses and what happens thereafter they fail. Why, because a proper study has not be taken into consideration. Intending business owners must study the market before entering it, a proper study can be done on paper or interaction that is asking questions from people who are already in the market. Study helps Intending business owners to know what they are about to face and how to handle it.
2.Unrealistic Business Plan
A Business plan is a written form of how your business will function. Business plans serve as a manual to business owners, once the business plan is faulty the company will crumble. So before writing a business plan make sure all factors are taken into consideration, the market, its consumers and most importantly the right financial forecast. Finances are as important as the business idea itself.
Inadequate finances is another reason why many startups fail. Once a new business starts stretching to meet consumers demands it loses balance, and just watch folding up is on the way. Intending business owners should get adequate capital financing for their new businesses. Entering a new market requires much capital, one major reason is that existing competitors are already in the market and huge finance is required to compete favorably.
4.Not Knowing your target Market
I will use running ads on Facebook as an example, many people just run ads on Facebook without targeting a particular audience, yeah Facebook knows how important this that why they gave that option. Targeted ads here means advertising your products or services to the people that actually want it. Intending business owners must have their targeted consumers in mind and of course, this should be stated in your business plan.
Sticking to a particular plan is risky, Intending business owners should follow current trends. The world is changing, competitors are changing and becoming more innovative so you should too. For example marketing products and services in the old days will require long walks, but now with the introduction of technology one can get customers through Digital marketing, content marketing, Email marketing, paid advertising on Google, Facebook, Nairaland etc.
Business is in stages. The expansion is inevitable for hardworking intending business owners but it could another aspect where you can fail if the process is not done properly. Once a business is set for expansion all factors must be involved. Factors like employees, office space, Assets etc.
Micro, small and Medium (MSME) scale businesses are supporting sectors that not only contribute significantly to improve standard living but also bring substantial local capital formulation and are responsible for driving innovation and competition in developing countries. You can start up a business too and succeed. The right information is just what is needed.
Writing a concrete and custom Business plan can be very challenging and stressful. At informationhive media, we offer the best Business plan writing service that can be used in Nigeria, Africa and in fact all overthe world. Contact us today for your custom Business Plan