3 Reasons Most Small Businesses Fail in Nigeria

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Being an entrepreneur is exciting. It involves taking risks, making decisions and more importantly, reporting to nobody but yourself! Some might like the idea of being their own boss, but the advantages come with serious drawbacks: you can fail and lose your investment. Unfortunately, that outcome seems to occur more than it should in a country like Nigeria, where the population should allow for rapid growth and expansion. It’s not due to aspirants not having the technical knowledge of how to run a business, but rather to some other odd details that come together to form an unattractive whole. These are a couple of issues that can be observed after some time spent in Nigeria.

Naming Sense

The name of you give to it is probably the first aspect of your business that people will notice (maybe alongside your actual work). Therefore, it might be a good idea to pick a name that displays your knowledge and expertise alongside your creativity and (maybe?) a sense of humor. A name that allows people to immediately tell what line of business you’re in is another interesting choice.

But what can be observed in many Nigerian small businesses is another matter altogether. Names such as “To God be the Glory Communications” and “Praise God Bakeries” are common occurrences in the Nigerian market. It’s not a given that the name alone would prevent the business from succeeding, as there are many companies with such (unconventional?) names that are still making tons of money. But in terms of overall impression, let’s just say that a more professional and less belief-oriented message could be sent across. 

 Advertising and Branding Methods

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You might be doing great work but if nobody knows about it, you can’t get customers, you can’t make sales, and your business fails. This might sound like an obvious aspect of business, but many CEOs actually don’t know this. We once had a potential client that was trying to break into the high-end luxury market. Without going into too many details, let’s just say that his website was far from being acceptable. It looked like it had been coded in an afternoon by a 12-year-old experimenting after reading a book called “How to create a website in 3 easy steps”.

Although it might sound harsh, the point here is that not to mention trusting the brand enough to actually want to buy items at 10 times the prices their competitors are using, they weren’t even the slightest bit credible (even more so as a supposed top-of-the-line luxury brand). We don’t know how they’re doing these days but the fact that we didn’t think they could get anywhere is telling enough.

In this particular case, the product was fine. It did indeed (to some extent) qualify as a luxury item. But the image they projected from having such a shabby website destroyed their credibility and probably the potential customer’s desire to be associated with them. It’s not enough to tell people your product or your work is great. It needs to be shown and reflected in every facet of your business.

Customer Service and Satisfaction

You might get the above parts right and still suffer as a company. Amongst other factors, a crucial point that seems to be lacking in the Nigerian market is good customer service. One gets used to dealing with impolite waiters, insulting customer service employees and eventually get to believe that this is the norm in Nigeria. Of course, there are exceptions and the trend seems to be changing and heading in the right direction, with companies that actually strive to make the customer happy, but sadly enough, those are still largely exceptions.

An example that I remember vividly was an altercation I had with a waitress in a bar. She made a mistake concerning the change she was supposed to give to me (which I eventually proved) but she kept denying it and getting angry at me. At some point, she started insulting me and calling me a thief. The manager eventually calmed things down, but somehow implied in his words that I should have just let it go. Treating customers in such a way isn’t uncommon at all in Nigeria. This wouldn’t affect a well-established business that much, but when you’re trying to break into the market, it’s a sure way to get a bad reputation from the get-go.

Now take a look at your business. Are you making one of these subtle-yet-glaring mistakes?

Jan, 26, 2016

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