While there are many factors that can help promote and sustain your business in Nigeria, there are also many other factors that are ready to pull the business down for you. So while you are excited about the promoters, there is a need to watch out for the destroyers, and there are some things you could do as preventive measures against such factors. This post is here to tell you some of those actions you should take to prevent your business from failing.
Business failure in Nigeria can be linked to many factors, including lack of continuity capital, unexpected attack, unfavourable government policies, lack of access by customers due to poor infrastructure, and exploitation by authorities, to name a few. It is all left to you to prevent your business from failing, because you will lose more if it eventually fails. If you are doing business in Nigeria and you don’t know what to do in this regard, don’t worry, this post has got you covered. Read down for 10 tips to keep your business from failing.
Check your location critically
It all begins here. Your location seems to be the fastest builder and fastest killer of businesses, both in Nigeria and outside Nigeria. The wrong choice of a location will be good poison for your business and vice versa. Is it located close to the market? Is your product or service needed there? What proportion of that market does your business target? These questions must be favorably answered before establishing your business in any location in Nigeria. Imagine setting up your jewelry business in a remote rural northern part of Nigeria. That’s the beginning of failure. If you don’t want that to happen, then you should find your way to an urban business environment.
Have less pity
The number of Nigerians living in extreme poverty is increasing. The National Bureau of Statistics recorded over 80 million as of 2020 (Vanguard,2020). As a result, buying on credit is almost becoming a culture. However, this practice has the potential to sink a business, especially a merchant business. Based on the principles of business, if you listen to every creditor, you are on your way to failure. Credit should be granted to well-assessed customers, and there should be provisions for recovery in case of default. When your revenue is stocked up in other people’s hands, continuity is bound to be buried. If you can’t continue, you have met with failure.
Supplementary power supply
In Nigeria, infrastructure deficiency appears to be an ongoing issue, including power supply. Businesses, especially manufacturing businesses, depend greatly on electricity. Electricity is also essential for the survival of restaurants and grocery stores. But if you’re doing business in Nigeria with little or no electricity, you must have a plan B. It could be your diesel or fuel generator, solar panel, and so on. Otherwise, you are set to collapse.
Do not cut corners
As important as getting your business registered is, it is also important to follow the due process and do so at the appropriate quarters. Although the financial implications of this might be bone-chilling, it is better than the implications of cutting corners. When you pay little to the wrong people or try to jump a process, you are digging a financial well out of your business for those who assisted you. They will always come back for more, using threats and false reasons. When the revenue or profits are constantly moved away by authorities, you will witness a gradual decline that will end in extinction.
Excellent customer service
Like in any other environment, Nigerians like good quality, even when their pay is comparatively low. If you do not want to fail, you have to maintain good quality. Keep up with competitors and make research your companion, especially if you are into production. Poor customer care scares away customers, and customers are the soul of the business. Who will patronize your service or buy your goods without customers? On the other hand, good customer care could bring more customers and establish you firmly. So value your customers.
Know the business you are going into
Before launching your business in Nigeria, you need to study the ins and outs of that business. What makes people fail in that business? And what are the areas of strength you can harness? For instance, if you want to start a provision business, you should be careful to separate the business from your family’s welfare. The tendency for the business to become part of the family food store is high. So you must deliberately draw the line by paying for everything you take out. If you mess up, failure is not far away.
Quality keeps you going
If you are into buying and selling, you should choose your suppliers carefully. When the chips are down, your good quality can keep you floating. Customers sometimes do not mind paying more for a product or service, or jumping possible hurdles just to access you, if you offer quality. First, business is all about meeting needs. When you meet needs, sustainability is guaranteed.
Have a good record system
You should know where each naira goes and why? That’s the function of recording your business activities. If you do not keep track of your cash inflow and outflow, it will be difficult to know your profit, how much you should use up and how much should be ploughed back into the business. Drawings for personal use are also important to know. However, if there is no proper accounting system in place and everything is disorganized, cash flow will be difficult to control, and if control is lost, a crash is imminent.
What ethics and policies in Nigeria surround your business?
This is important to know, especially in the immediate environment of your business. Some cultures or religions in Nigeria do not permit some business. For instance, the Muslim religion does not permit the consumption of pork meat. Establishing a meat business in a Muslim-dominated environment will not be a good idea. You would have little or no customers, and in no time, your business would be gone.
SWOT analysis would help
Checking the strength (S), weaknesses (W), opportunities (O) and threats (T) of your business will be a good preventive measure. When you know your strengths, say quality, it can help you decide which areas to invest more in while working on your weaknesses. What are the future prospects of your business and what is threatening its success? An example is competition. When you know these and work on them, failure is far away.
In summary, despite the multiple business rodents in Nigeria, you can keep your business flying. Know your location, conduct SWOT analysis, give very minimal credit, study the business before and during operation, maintain good quality, have an alternative power supply, do not cut corners, record your activities properly, know the policies surrounding your business and care for your customers.