Topic: Business failure among small-scale entrepreneurs - page 17. (Read 3153 times)

Please note that the business world is a world full of challenges, sometimes bringing in troublesome competitors.
This is where our expertise is tested in business.

but the cause of the failure of a business is sometimes not because our business is bad or our marketing is not good. but the overall economic condition of the economy can be the real obstacle. when people's purchasing power decreases. and the price of goods continues to soar. At such times it is very difficult to maintain a business. it is not surprising that as a result of an economic crisis, many shops and companies were able to close, even factories that had been around for a long time had closed because they were unable to pay employee salaries due to the products produced there had been a decline in interest in the market so that they were not selling well.
There are many factors that can make a business fail. both internal and external factors.

usually to maintain a business when we have many employees and at the same time income decreases. then the reduction of employees is the solution. despite the fact that the effectiveness is still 50:50 but it can minimize expenses. reduction of employees and reduction of production if it is a factory.
and today the global economic conditions are really worrying so that it is increasingly difficult for small businesses to survive.

That's why I made the other point, only locals can run a successful biz in poor/developing countries.

They have experienced the poverty and can make more accurate assumptions when it comes to people's spending ability & related projections. Unless you have millions to burn and can keep on adjusting the scales until you start making some profit. But then it wouldn't qualify as a small-scale biz.

This is what amazon did in India. They had billions to burn and seized a major chunk of E-commerce market while parallelly figuring out a revenue model that works.

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.

It is quite common for businesses to fail within the first five years.
Around 20% businesses fail during the first 2 years and 50% within the first 5 years lol
The numbers must be more skewed when it comes to Developing countries(like Nigeria)

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.

Starting a successful biz in Nigeria isn't going to be easy and can only be done by locals imo

That is why it’s very important to meet the demand of every client or customer because that will keep their interest to stay patronizing your product since it’s the best in their eyes. This might be the cause that most businesses fail because they don’t always improve the quality of their products as much as other competitors will always ensure high quality and always seek even higher quality so that the customers will stick to them.

The reasons why businesses (small scale and large corporations) fail and pull out of Nigeria is mostly due to insecurity, power and government policies.

I don’t need to spell it out that when there isn’t peace and stability, business will definitely not thrive.

You would also need power to run your business. And Nigeria presently can’t generate enough for its personal use

Government policies in my opinion is the greatest hindrance of them all as a government could put in place policies and when a new government is elected, the old policies are thrown out and new policies are put in place that businesses would have to follow.
Government interference also plays a key role in the demise of businesses

Yes it is, businesses doesnt have everything thats why on being an owner then you should be that attentive and adaptive on the same time.If there were lacking then you should immediately add up because if

people would find out that it doesnt really have that kind of feature and find out something else then they would really simply skip and leave out.Its true that people would always be looking or go after for the best.

Building up a business doesnt automatically means success.There's always been a risk and this is why you would be trying out to avoid as much as you could and trying out to
give out the best service that you could really able to do so.

Building a business is not as easy as one might think. because in addition to being good at following ongoing trends, as business people we must be able to create trends that lead to our business. because following the trend sometimes won't last long. because the competition will be very tight. but creating a trend is a brilliant innovation in marketing. as before we know a small toy company such as toy cars and gansing. if we look at them, they seem to follow the trend among children who like to watch anime films about car racing fights. So does it last long? in fact not. but if we look deeper and more carefully, it turns out that the company has already designed the toy cars. and before being sold in the market, the company creates a trend first. by adopting an anime film and then the company helped the film to become famous and watched by many children. after the kids started liking the movie and fantasizing about owning the same thing as the main character in the movie. then that's when the toy company sells free toys that have been prepared for a long time in the market. and it is true that it immediately sells in the market.

and after a dim trend. then the company did the same with different toys and different movies. Following trends and creating trends is difficult. but if it works. then the profit will be very much. Many toy companies do this.

Some of the following tips should also be done in building a business, namely:
- Make and have a really mature plan.
- have creative ideas and fresh innovations.
- Can Follow Market Developments (be it following a trend or building a trend)
- study competitors.
- build good connections with many circles and companies as well as with customers.
- provide the best and friendly service to consumers and also to business partners.
- learn the desires of consumers.
- and maintain the welfare of workers or employees. so that they give the best hard work to the company and not on the basis of compulsion.

actually there are many other tips. but in general the tips above are enough. So far we have seen many business companies go bankrupt due to not being able to keep up with market developments, market trends and not according to consumer wishes/consumer needs. this is something to be aware of.

Starting a small business is incredibly difficult and I cannot remember the statistic, but something ridiculously high like 9 out of 10 businesses will fail in the first couple years. It really requires a whole other level of commitment and multitasking ability. Depending on which business you choose, it can require learning all kinds of different and varied abilities. You might have to be the idea developer, the product manufacturer, the art designer, the accountant, the marketing manager and all sorts of other parts. Most people are also starting on a rather limited budget, or quickly use up their starting capital and end up losing a lot of money. Even if you are successful, things like burnout through overwork can easily creep up on you.

It is true that maintaining a business isn't easy and that's why a business that's already seeing its peak should maintain its consistency. That's all that matters in most businesses because even if you're the best right now.

But, you're not consistent in what you do like marketing, customer support and innovation then you're going to be the last someday if you're not able to maintain that. Especially for these businesses that requires continuous upgrade and innovation, they'll be left behind if they don't accept that fact.

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.

The business world has become very competitive and in order to remain alive in the business for a long time, a business owner needs to be very proficient in many things, hard working, smart enough, financial capable and always keep his/her eyes on the customers.

There are two very important elements that are crucial in running successfully any business. First is the strong business idea and the second one is all about marketing and management skills to be able to keep customers/clients interested in your business. If you are thinking of starting a business, it is good to have a strong business plan that includes all the necessary aspects of your business such as: market research, competition analysis, finances, marketing plan etc. To increase the chances of your business succeeding, you need to ensure that you are constantly updated with current business trends, educated enough to know all the possible market shifts and you must be able to make most informed decisions.

Any  business can fail if not well manage. It is one thing to start a business and it another thing for the your business to stand firm for life. These are examples of Nigerian Businesses that Failed Within 5 Years:

1. Efritin

It was founded in 2015 as a classified advertisement website by the Swedish company Saltside Technologies. However, it was unable to scale beyond its second year due to various factors such as mismanagement of funds and high data costs.

2. GoMyWay

GoMyWay, a Nigerian ride-sharing service, began its operation in mid-2015. It, however, shut down in 2017 through an email circulation sent to its customers.

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.

4. Easy taxi

The ride-hailing company started in Brazil in 2011 and expanded into Africa. It was launched in 2013 in Nigeria, becoming one of the first Rocket Internet armies to arrive in Africa but was later pullout from African market after few years.

https://businesselitesafrica.com/2022/02/09/5-nigerian-businesses-that-failed-within-5-years/?amp=1

Reason why businesses may fail
👉 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.

👉 Mismanagement of Funds
Some small businesses fail because the owners mismanaged the business funds and there was no accountability.

👉 Inadequate Financing
Huge number of entrepreneurs make a common mistake of starting a business with no adequate operating funds. Most small business owner start their business without having enough that can finance the budget of their business. Some start the business with loan with heavy interested.

👉 Poor Business Management
The management play a key role to sustain a business. It comprises of activities such as planning, organizing, staffing, directing, motivating, controlling, co-coordinating and communicating. When a business is poorly managed, its death is imminent. Management

👉 Inability to Communicate Value
Communication is highly important in businesses. This is the only language your customers here. Some small businesses fail because of their inability to clearly define their value propositions — that is, they fail to understand and communicate their products or services to consumers effectively.

👉 Wrong Expectations
Some startup and small business owners expect money to start rolling into their business account immediately with doing little or nothing.
The idea of starting a business with the wrong expectations and impatience has made many businesses to collapse within a short period of time.

👉 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.

👉 Lack of Focus
Investing in many things almost at the same time is not healthy fora business. Engaging in so much things at a time may make them run out of cash. This on the long run will affect the financial aspect of the initial business. At the long run, they end up closing down the business.

https://mkobo.medium.com/13-reasons-why-small-businesses-fail-in-nigeria-3c844fee7e7c

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.