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How Can I Raise 50k For My Small Business Idea / 5 Small Business Ideas In Nigeria With Little Start-up Capital (2) (3) (4)
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5 Small Business Mistakes by freelance(m): 10:00am On Sep 05, 2006 |
I learnt a few years back that most businesses die within the first five years of their existence. Another small fraction goes into extinction between the sixth and the tenth year. At the end, only about five to 10 per cent of young companies survive and experience growth. Given the fact that we have very few (if any at all) businesses founded by Nigerians that are one hundred years old, it is expedient that we identify those factors that appear as death traps for young businesses. Insufficient capital Reality is usually different from projection. It is not unusual for most small businesses to record sales or profits that are lower than their expectations. This may in turn hamper their ability to continue to offer their products or services on a consistent basis. It is advisable therefore that you have some possible sources of extra capital to fall back on. This must be why Jesus said; “But don’t begin until you count the cost. For who would begin construction of a building without first getting estimates and then checking to see if he has enough money to pay the bills? Otherwise he might complete only the foundation before running out of funds. And then how everyone will laugh.” (Luke 14:28-29) Lack of focus A new business must quickly establish its Unique Selling Proposition (USP). In the market, you are different or you die. You must do one thing exceptionally well. That in itself is a challenge. Trying to do three or four things exceptionally well will wear you out. It will make you a jack of all trades and master of none. Life hardly makes room for outstanding generalities, especially among start-ups. Quickly identify your best market opportunity and give it your best shot. It may not yet be time to tell yourself not to put all your eggs in one basket. You don’t have many eggs yet. Put the only one you have, or the few of them in one basket and watch over it. Inadequate market research Assumption is the lowest level of knowledge. If your business is founded on wrong assumptions, you may be in for surprises. One important source of information for a business is the customer. It is expedient that you talk to a number of prospective customers to understand their needs and whatever hang-ups they have about similar lines of products or services. Perfection Many young entrepreneurs see successful businesses that fit perfectly with the ideal pictures they have in their own minds. However, they find it difficult to know how to move from where they are to where they want to be. So they began by setting up beautiful offices with costly furniture in expensive locations. In fact, some don’t start at all just because they cannot afford those fanciful things. Most entrepreneurs did not start with fanciful furniture or official cars. They prudently managed the little resources they had, nurtured them like seeds and took them through several cycles of multiplication. Even when they have become successful, their prudence helps them to manage their success. They increase profits while keeping their overhead costs as low as possible. Over reliance on one or two customers To experience a rejection or disappointment from a customer when about seventy to eighty percent of your turn over comes from that single customer can be devastating. This is the experience of many businesses in our country that depend only on certain government agencies or parastatals for contracts. Prolonged delays in their payments can throw them deep into debts. This kind of a situation reminds me of the biblical story of Samson, who was divinely endowed with extraordinary physical strength. When he was captured by his enemies, they removed his two eyes. One day, they made him entertain about three thousand top officials in a stadium. The whole load of the stadium rested on only two pillars. By crushing those two pillars, Samson brought down the whole stadium. It can be dangerous to depend on only one or two customers. For advisory services on small and medium scale businesses. You can contact me @ ideas4u@fastermail.com and let us reason together. You will suceed! |
Re: 5 Small Business Mistakes by Contractors: 11:12am On Jan 14, 2012 |
I think this poster is ON-POINT with the above. |
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