Business failure among small-scale entrepreneurs - page 16.

TimeTeller

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Quote from: Hypnosis00 on September 28, 2022, 06:04:31 PM

Quote from: odunybiz on September 27, 2022, 03:41:00 PM

CONCLUSION
Establishing a strong and firm business doesn't come easy. It involves patient, time, passion and hardworking. Young entrepreneurs should try to learn from failed businesses and guide themselves with successful businesses.

It is all connected to each other, once one of them will fail, the business will fail also. That is why we should know which part is weak in order to take immediate action to resolve it otherwise. Those companies that you have mentioned are just a few of having suffered huge losses due to mismanagement and lack of team participation. It was indeed important that each member of the team will understand each other, teamwork, and their is one goal and that is to success, not only for themselves but for the whole company.

Also, it doesn't mean that your first attempt in business will always succeed.
It may take many failed attempts before you can really see the fruit of your hard work.
Also, if you have other members in the team, it would take their effort to accomplish your objectives.
But most young entrepreneurs easily give up if they encounter troubles building their business.

Hypnosis00

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Quote from: odunybiz on September 27, 2022, 03:41:00 PM

CONCLUSION
Establishing a strong and firm business doesn't come easy. It involves patient, time, passion and hardworking. Young entrepreneurs should try to learn from failed businesses and guide themselves with successful businesses.

It is all connected to each other, once one of them will fail, the business will fail also. That is why we should know which part is weak in order to take immediate action to resolve it otherwise. Those companies that you have mentioned are just a few of having suffered huge losses due to mismanagement and lack of team participation. It was indeed important that each member of the team will understand each other, teamwork, and their is one goal and that is to success, not only for themselves but for the whole company.

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Quote from: uneng on September 27, 2022, 07:46:11 PM

Quote from: edgycorner on September 27, 2022, 07:34:23 PM

Businesses in poor countries tend to face greater challenges and obstacles than those in developed countries. This includes factors such as a lack of access to capital, limited infrastructure, corruption, and a lack of skilled workers. As a result, businesses in poor countries often have a lower success rate than those in developed countries.

I see as a major difficult in developing countries the fact people don't have much money to spare, so you as a business owner have a very limited customers' base to acquire your services and products. People are too worried about survival that they will only have access to basic goods and in a limited scale. Furthermore, even though there aren't customers for everyone, the concurrency is the same or even more expressive than in developed countries. There are too many sellers for too few buyers. This situation has a very negative impact on individual businessmen and many consequently have to close the doors at some point.

The reason why businesses whether big or small should always have sufficient capital so that the production will always be consistent, and if ever there are sales decline, there are still good amount left that will cover the shortage. Also, in building businesses, it’s also important to consider the population of the consumers and specifically their demands too so that you will create quality products that will be consumed by a large amount of consumers.

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Quote from: BIT-BENDER on September 28, 2022, 04:33:05 PM

I don't know many of those Businesses you made mention but I am well aware of OLX and what the brand is all about and I would let you know that they weren't really a small scale business.
OLX came out with so much ambition, thought and financial backing and you could see that in the amount of resources they put into their marketing.
They hit the ground running for some few years and I personally know some people that made use of them. And just like many businesses that has fallen even with the right financial power, it has to do with management.

It was sulit.com.ph and it turns out to be olx which i do know that lots had been changed and lots had left and using up the service or platform which i wasnt aware that they had gone down.
When it comes to business then there's no assurance that you would really be successful, yes its not bad to make out some changes for the good and trying out to expand but
it wouldnt ensure that it would really be that effective but well its really something the risk where these business owners need to test or try on for the better
but it did really just failed and it is one of the risk.

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Quote from: Dunamisx on September 28, 2022, 08:01:16 AM

Quote from: odunybiz on September 27, 2022, 03:41:00 PM

Inadequate Financing

Let me talk about this point as I don't accept such as one reason why a small scale business should fail, we can consider what we often referred to as business growth as a process whereby an enterprise proceed from one developmental stage to another and just as we know that many businesses started from being small to expand to something big in the later future and we've got some good examples of some businesses that has little start up capital and remain committed to it and they eventually got advanced and the business turn big while some have started with huge amount of capital but ended in bankruptcy within the shortest period, so it's a responsibility of funds utilization in business expansion and its management, start small and grow big is better than starting big and ending up closed down.

In this case it may be a target that we need to consider. Because in business, especially for small businesses, it is clear that we do not have to set high targets to fit our budget.
Actually, in this case insufficient capital can occur for several reasons and indeed for a small business, it will be more or less affected by capital, even though what you say is starting from small to big, but in this case, adequate money management is needed so that things like capital do not happen which is not adequate.

BIT-BENDER

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I don't know many of those Businesses you made mention but I am well aware of OLX and what the brand is all about and I would let you know that they weren't really a small scale business.
OLX came out with so much ambition, thought and financial backing and you could see that in the amount of resources they put into their marketing.
They hit the ground running for some few years and I personally know some people that made use of them. And just like many businesses that has fallen even with the right financial power, it has to do with management.

el kaka22

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I agree that there is a good reason why we can't really understand what could happen for us to fail, but we need to realize one huge and important thing, which is debt. Most of the companies that you see end up working towards the fine line between bankrupting and success, because they spend everything they get to grow, and that causes companies to be always in trouble, one big mistake and you are done because you can't pay for that mistake without getting paid and if it's a mistake you can't get paid.

Even Tesla and Amazon had this, they had plenty of times when it looked like they would fail, and instead they ended up working out but it was very close for both of them at times.

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Quote from: Davidvictorson on September 28, 2022, 01:47:49 AM

Quote from: odunybiz on September 27, 2022, 03:41:00 PM

~snip~

You forgot to mention that harsh government policies can make a small business go under. A typical example which I remember clearly is Gokada. Gokada is a tech startup based in Lagos, Nigeria. The startup launched as a ride hailing company in 2017. And in 2020 the Government of Lagos State in Nigeria stopped the Gokada from working citing insecurity. A claim which made no sense. Even though, the company has now diversified into Logistics and Food Delivery, their ride hailing plan was the best because the company came with a very good initiative, where you can track their bikes to know where they are and where they are going. They are well registered. You can even track the bike from your phone, but the government cancelled it without a good explanation.

This is very common, governments supposedly want to encourage foreign and domestic investment but in reality they do the opposite, anyone that has tried to create a business before know how difficult and costly is to get all the paperwork done, and then once you begin to operate you have to deal with thousands of regulations and taxes, and before you know it your dream business becomes nothing more than a nightmare from which you wish to escape every single day.

Hydrogen

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More than 50% of small businesses failing within 5 years is a commonly touted statistic.

I think most entrepreneurs make a mistake of thinking that starting a business has to be a large mega enterprise. Its much better to start small. Buying and selling items on local second markets. Having some type of profitable side hustle. It could be as low key as cleaning parking lots. Or cutting lawns. Starting a business is better to not be something people pour all of their time and life savings into. It should be a casual thing and natural progression that is done on the side. If incorporating, large expenses and other extras are tacked on. I think those extra and unnecessary steps greatly increase chances of failure.

A good educational system would give students real life experience owning and operating a small business. That is something that is very necessary and needed in this day and age.

Flexystar

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Just wow for this post! I am very much impressed because there are some facts which are actually making the failures amongst startups. I have heard/read almost all of the examples given in the OP and yes I have seen them failing. OLX is closely related to me as I have used it multiple times. The website is working till date but it's presence is next to zero. It's like surviving on it's final breaths these days. However one thing is sure, there are bigger players in the market as compared to them with bigger budget to spend on management and marketing etc. It's beautifully written article and every startup must note down them to save themselves from failing.

dezoel

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Some of them are not from Nigeria. Efritin's description said it's from Swedish and OLX is from Singapore if I am not mistaken. Those businesses are also not small but a true small business won't be featured like that. I think OLX didn't fail but they only rebranded their website. It was now called carousel when I visited them last time.

I remember I used this site before for selling some of my stuffs and got a good offers from different people. It was a fun experience though. Easy taxi may have failed but there are now uber and grab which are more popular. Something tells me that competition is also one of the reasons on why a business can fail.

Dunamisx

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Quote from: odunybiz on September 27, 2022, 03:41:00 PM

Inadequate Financing

Let me talk about this point as I don't accept such as one reason why a small scale business should fail, we can consider what we often referred to as business growth as a process whereby an enterprise proceed from one developmental stage to another and just as we know that many businesses started from being small to expand to something big in the later future and we've got some good examples of some businesses that has little start up capital and remain committed to it and they eventually got advanced and the business turn big while some have started with huge amount of capital but ended in bankruptcy within the shortest period, so it's a responsibility of funds utilization in business expansion and its management, start small and grow big is better than starting big and ending up closed down.

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Quote from: odunybiz on September 27, 2022, 03:41:00 PM

3. OLX

OLX is a classified advertising platform launched in 2012. It allows individuals to buy, sell, and trade used products and services using their phones or the internet. Naspers, a South African media behemoth, owns the startup. However, the startup was shut down in 2018 due to challenging operating conditions.

This one is the wrong example.
First, the story is not true, as it never shut down, what it has done is leave Nigeria as in the physical presence and continue to operate there without a headquarter, just s Binance offers P2P in countries where it never plans to have an office.
Furthermore, you can't really point any of those flaws at the team behind olx, they managed to score big in some European counties, gaining a solid foothold even in southern Asia and South America, so actually none of those:

Poor Customer Care/Support
Customers need proper attention for a business to survive. Without them, your product will fail to exist. When customers are not well treated or appreciated, they often become dissatisfied, leave bad reviews and patronize others.

Quote

Mismanagement of Funds
Inadequate Financing
Poor Business Management
No Planning

Olx is still up and running and has a 1 billion revenue, not even going into the fact that it wasn't a start-up anymore when it arrived in Nigeria if the dates are correct it was already 6 years old and with enough money and experience. A pulls out from some country or selling your business is not really a measure of the overall health of the said company.

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Regardless of the type of business mentioned above, for me they are all examples of how a business stands not only about costs and adequate concepts. In business there are always ups and downs, therefore business can't run in one direction. For example, only targeting one particular consumer, if in it there are 2 or 3 target markets it might be much more stable. In today's digital era, businesses face big corporate competitors. As a business person, it is very important to pay attention to digital trends, because then adjusting to what the digital market needs can be fulfilled. One of them is digital marketing, this is clearly important in reaching market elements. Utilizing a video marketing platform as a means to highlight the products we have.

Not only that, nowadays the use of smartphones is a must for young and old alike. That way we can direct them to a platform that we build to make it easier for them to explore what items they are looking for and need. Build a website to be accessible to every element or rather by building an online store. Give them the best 24-hour service, and evaluate each customer to provide as objective an assessment as possible so that our business continues to be updated according to consumer desires.

Jawhead999

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The reason you gave above are just common sense because that's what you're comparing to the big projects. Small startup will have limited funds, limited person, higher risk to bankrupt, and lack of many thing. Obviously big projects already have big funds, many employee with brank office and bigger in many thing.

Each startup will have different problem and mostly the problem is about their product aren't offering better feature with cheap price. If the project can create better product with cheap price, they can compete against the big projects.

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Quote from: odunybiz on September 27, 2022, 03:41:00 PM

👉 No Planning
Most small scale businesses start the business without a concrete plan. They rush into business because they see people make ways from it. To start a business, one need to make proper findings about the business. Failure to plan may lead to the downfall of the business.

The lack of planning is usually the reason why many businesses close. Newbie entrepreneurs think that establishing a business is not difficult. They think that once money starts flowing into their business, they can relax and just wait for their investment to return. They forget to plan some contingency measures that can happen on their business in the future like if a typhoon or the pandemic last year which ruined many businesses.

I don't think this is absolutely true as most new business entrepreneurs are planning way ahead on their business endeavors and most of them have a roadmap to follow through. Also, newbie entrepreneurs know how hard to handle a business before even starting one as they will need to against huge companies.

I guess most new businesses fail to run in the long run due to not being able to follow up with the roadmap as well as compromising any delays that could happen on the roadmap planned. Another main reason why small businesses fail is that huge companies overwhelm them and they cannot keep up with the other big businesses' pricing, marketing, and services.

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Quote from: odunybiz on September 27, 2022, 03:41:00 PM

~snip~

You forgot to mention that harsh government policies can make a small business go under. A typical example which I remember clearly is Gokada. Gokada is a tech startup based in Lagos, Nigeria. The startup launched as a ride hailing company in 2017. And in 2020 the Government of Lagos State in Nigeria stopped the Gokada from working citing insecurity. A claim which made no sense. Even though, the company has now diversified into Logistics and Food Delivery, their ride hailing plan was the best because the company came with a very good initiative, where you can track their bikes to know where they are and where they are going. They are well registered. You can even track the bike from your phone, but the government cancelled it without a good explanation.

Don Pedro Dinero

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For me there is one very important factor that you have not mentioned, although it is related to these two:

Quote from: odunybiz on September 27, 2022, 03:41:00 PM

<...>
👉 Mismanagement of Funds
<...>
👉 Inadequate Financing

It is simply taking on too much debt. It is better to start small, little by little and grow as the business works. Starting with debt adds a fixed cost that requires better results to make the business work than starting without debt. Depending on the sector in which the business is undertaken, it will be more or less necessary to get into debt, but nowadays, with the addiction to credit, many small businesses get into debt more than necessary. It is usually one of the main causes that end up screwing up the business.

Jody.Drummer

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Quote from: Rockstarguy on September 27, 2022, 04:50:04 PM

Quote from: odunybiz on September 27, 2022, 03:41:00 PM

Reason why businesses may fail

Inability to maintain quality can also be a reason for a business to fail, Customer's always want the best, the moment their is lack of value it can change the mind of Customer's to go after something else and may not come back. Business can also fail when you don't know what your customer want.

This is true, in fact regardless of how competitive the market is now it is certain that product quality is one of the attractions.
Actually, not only small companies have to do this, but large companies also have to keep up with market developments and desires.
Examples in gadgets, we know a few years ago Nokia is one of the biggest products even in the whole world. but now when those who are always strong in developing their Symbian and with minimal features clearly lost in the current android competition so that they have experienced a significant setback until now they are difficult to rise.

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Quote from: odunybiz on September 27, 2022, 03:41:00 PM

Reason why businesses may fail

All the reasons you wonderfully outlined that cause the failure of businesses are valid but you forgot two that are killing businesses in my location. Unfavorable government policies and external factors like the war in Ukraine are silently killing businesses in my country.

Due to inflation and reduction in government revenue, the government is over-taxing businesses, making them collapse. There are also businesses that have been witchhunt by the government because they supported or are supporting the opposition political party. Such businesses suffer and sometimes collapse because of the perceived political affiliation of their owners.

In my lifetime, I have heard about or witnessed conflict or wars in different countries but the global effect of the war in Ukraine has given me a clear glimpse of the interconnection and interdependence of the world economies. The increase in the cost of oil and gas, power, and other agricultural products due to the war in Ukraine has led to the death of many small and medium-scale businesses.

Topic: Business failure among small-scale entrepreneurs - page 16. (Read 3153 times)