Most entrepreneurs with ideas don’t take out time to plan how they will turn their ideas into profit, they just get up and start buying and selling, this has resulted in so many business failure rates.
When the entrepreneur is unaware of what step to take, starting up a business should not be the first step, this article will guide you towards mitigating against business failure rates.
Just like every other thing, businesses also have their challenges, its either you are battling with generating your own electricity (power) , trying to service your generator, your staff stealing your inventories, and the list goes on, by the way, these are external factors , how about you putting hands into your business monies (account) and entertaining guest ? I know some of you are already feeling guilty. But this article is not to make you feel guilty, it is to help you run your business the right way. Are you aware that there are 41,500,000 businesses in Nigeria and 61% have already folded up?
so, we will focusing on 3 major reasons why businesses fail.
Problems and Solutions
Table of Contents
It is very devastating to see family and friends put in so much sacrifices in starting up an enterprise and seeing it crash under your watch, My father started up a clinic after retirement, but ended up treating patients (relatives) for free/on loan, of course he ran out of cash and eventually, there was no money to restock inventory and pay salaries. I still see some people making this same mistake. so hear what Forbes has said “8 out of 10 start-up businesses fail within their first 18 months“
- Not Having a Business Plan
“If I’m given 1 hour to safe the planet, I will spend 59 minutes describing the problem and 1 minute solving it”Albert Einstein
Report from the research we carried out on MSMEs showed “75% of startup businesses that failed did not have a business plan before starting up their businesses.”
Just as every skyscraper requires a building plan from an architect, a business that will survive the test of time requires a plan. If you have never worked on a building site before, you may not understand how important it is to follow architectural plan, but I’m sure you have heard or read about some buildings that collapsed not too long ago, and it was rumored that there were deviations from the plan on the site, in some places, vendors supplied fake products. If you have
Again, think of driving in a busy state like Lagos to meet up and sign a 6-digit figure contract with your new client, you are excited to read the congratulatory message sent to your mail, and you are prepared for the contract signing, the only challenge is you have never been to their location. You saw their advert online, you applied, ran all the interviews online, and now it is time to meet them in person as the winner of the Job. So you ask a couple of people how to get to your new client location and you are getting more confused as different people are pointing you to different directions on how to get there, you don’t want to use a cab so that your client don’t think low of your ability to managing the resources and cancel the contract. so, you set out and stop at every junction to ask for direction so that you don’t miss your way, but now you are 10 minutes late and you are thinking of what to do, then you suddenly remember google Map, you brought out your phone, typed the address and google tells you that there’s been a congestion in front and rerouted you to your location, you got there 12 minutes late. If you had used google map when you first set out, perhaps you could have been there 25 minutes earlier
Yes google map did not only save your time, it located the place for you. A business plan does the same thing, it helps you reach your goals/objectives successfully.
A business plan is a document that helps entrepreneurs focus on specific steps (short-term and long-term objectives) necessary to make their business ideas succeed.
When a business flourishes, both the founder and staff are happy, the standard of living of these people together with their families goes up. Money exchanges hands in the marketplace, the GDP of the state also rises, but when a business fails, things become very difficult, standard of living drops, and poverty becomes the order of the day and the rate of insecurity goes up.
- No Product Visibility
Another reason businesses fail is: “Lack of Product or Service visibility“.
So many entrepreneurs do not know that it is one thing to have a good product or service and another for customers to know your products or services exist. A wise man said, “having a good product and just hoping people will buy is like winking at a lady in the dark and hoping she sees you”.
You need to advertise your products or services on different platforms, your minimum number of channels to advertise your products should be 20, some expert encourage 50 channels. Your customers are on these channels, they need to know your products and services exist first before they can buy.
subscribe to our newsletter, to be the first to know when we update more information on different channels and how to benefit from the opportunites
- Lack of Proper Record Keeping and Data Analysis
We mentor Entrepreneurs and one common challenge most of them have is keeping good records. Keeping good records cannot be overemphasized.
That recharge card money you took from business funds and forgot to record can harm your business over time as a start-up. If you don’t have good record-keeping system in your business, then you are not in control of that business, because you cannot make meaningful insights from data to guide your decision making and a business you are not in control of, is on its way to failing.
- Business Plan
We train and mentor Entrepreneurs, some of our team members have participated and won a couple of business plan competitions and have therefore put together a business plan template to help upcoming entrepreneurs take advantage of their research work and get better in their businesses. Get the business plan template here, or attend business plan training at Jomidoo Business Academy (JBA), network with other great minds and get sharpened in your strategic thinking.
JBA helps SMEs capture and measure business goals and analyze the viability of their businesses before launching out, this knowlege will also help entrepreneurs to remain in business by staying focused on the set objectives
We also train businesses on how to monitor their sales through google Analytics for better performances and customer service
- Product Visibility
To curb the rate of business failure rates, we have tackled the issue of “lack of product visibility” by building a marketplace for raw FOOD, Digital downloads and Others. This platform is for the purpose of showcasing vendors quality products to customers to buy, so vendors who’s reviews are negative will be yanked off after investigations. A positive review will also attract some benefits. check site for more.
Emtos is an online Marketplace for vendors to upload their raw FOOD produce, digital products and physical products/services and start selling . It creates a web page for you to sell your products or services online.
- Record-keeping and Data analysis
A good record-keeping and analysis helps Entrepreneurs to take proactive steps and remain afloat in business
We develop and sync systems and processes to automate record-keeping hassles for SMEs. You don’t have to wait until your business is big before you set structures to grow, you need to first set your structure (departments) like: HR & Admin, Marketing & Sales, Account , and so on. As a startup, you may be the only staff of your business, but setting up your structure will help you understand your business needs, like, which staff to employ first when activities start increasing? will it be a customer service personnel to handle customers demand? will it be a cleaner to keep the office tidy? will it be a marketing or sales person to bring in more sales? The more clearly defined your business is, the better your performances