So many Nigerian businesses which kick off nicely with great dreams and aspiration often close down after 2 to 3 years of start-up. So often we come across many people who give so many unrealistic reasons for failures in their businesses and some of these reasons comes from lack of understanding the basic principle of business administration.

Managing businesses can sometimes be challenging, difficult and at the same time enjoyable. Many people hop into businesses with the idea that it wouldn’t be that difficult, that the journey will be smooth and this turns out to be one of the major reasons for business failure.

Many things leads to the failure of businesses in Nigeria, but i shall share with you, some of the core reasons for these failures.

1. Lack of Proper Planning.

Many Nigerians do not make proper plans for their businesses while few only make plans for the creation of the business and not how to run the business into stability. They don’t set their mission or vision as they just depend on making profit alone which is a wrong way of beginning a business. They also fail to analyze the competition and lack the strategy to tackle them. They never think about marketing activities of their businesses nor are they ready to spend money doing that. They rarely think about potential problems or set backs that could occur in their business. There are different types of planning an individual can carry out. Some of these are Strategic and operational planning, Long term and short term e.t.c. Don’t underestimate the market by concluding that it wouldn’t be difficult. Think, plan, note down your plans, and work towards it.

2. Poor Management.

This is a major reason why businesses fail. It is essential to hire or have a good team while expanding your business. Employees are companies greatest assets. How effective your team is organized and managed, will determine how successful your business or firm will be. Obviously you can’t be able to handle all the tasks in your company alone, that is why you hire a team. Hire people based on their skills and demand of such skill in your business. Treat all employees with respect, appreciate them for their effort in pulling off difficult tasks. This will make them happy and thus foster team work. managing your business has to do with providing good ethics for your organization. Have a good mission and vision statement and ensure every member of your team understands and abides by these statement.

Creating a business plan that covers your marketing strategy, pricing strategy and organizational structure will help improve your business. Ensure to see the works of your employees, communicate properly with them to make sure they are in line with your original idea.

3. Poor Accounting.

This accounts for 40% of failure in businesses in Nigeria. Having a good account record is very essential in business. This helps you to monitor how your customers react to your products and also helps you to know how payable they are. Watch your accounts properly, don’t just focus on the liquid cash at hand and in banks, understand how credits are being done. Also improve one your weak areas in that business. Accounting is a very crucial aspect of every business and you should mind the kind of employee that handles it.

4. Poor Marketing

Marketing is very important is every business because this is what attracts your customers to do business with you. Many businesses has neglected this important aspect of business and this has caused so many businesses a great fortune. Have you ever wondered why already established companies in the likes of Coca Cola, MTN, PEAK MILK and many others still advertise their products?? Everybody knows these companies yet they still keep on advertising. This is because advertising is one of the secrets to their success. Every time you advertise your products, there are people out there who are willing to try them. Never underestimate the power of advertising. Very essential, while doing business, budget a certain amount of money for advertising and this will bring in more people to do business with you.

5. Lack of Targeted Customers

Lack of customers is one of the major reasons for collapse of businesses in Nigeria. Do some research on your targeted customers before you commence any business. Research on how your targeted customers have been getting similar product to yours, where from. When you make proper research, this will help you plan your business properly and reduce uncalculated risks. Research and have a good knowledge of your targeted industry.

6. Poor Customer Relation.

Your customers are the reasons why you will flourish as a business personnel. If you do not relate well with your customers, you will lose them and lose profit. Always smile at customers and don’t raise your voice on customers no matter how bad the situation is. Remember the saying, a customer is always right. Control your anger as some customers have bad approach and also learn to use your wisdom in business to outsmart them. If you treat your customers well, you will not only gain their loyalty and patronage but also that of their colleges which is the best form of advert. This will also lead to increase in profit.

7. Failure to accept change

8. Lack of Innovation

9. Underestimation of competition

10. Giving up.

Source: https://entrepreneursxpress./2016/10/16/reasons-for-failure-in-business-in-nigeria/

i thought ill see electricity @ no 1

Starting a business can be great and all that but starting without planning as good as starting with plans to fail...