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!

I think this poster is ON-POINT with the above.