The Nigerian financial sector has significantly grown in leaps and…
It is probably already common knowledge that entrepreneurship is not for the faint-hearted. There is a lot of blood, sweat and tears involved as well as a lot of planning, analysis, tact and doggedness. Additionally, to achieve entrepreneurial success, there also needs to be knowledge of some vital aspects to pay acute attention to and oversea meticulously. Jumia Travel, the leading online travel agency, shares 4 interesting reasons why small businesses fail.
Starting for the Wrong Reason
Many people start businesses for the wrong reasons. For example, a mechanical engineer quit working for a mechanics company because he was tired of answering to an employer and thought he would do much better financially if he worked for himself rather receiving ‘peanuts’ from his company for all his hard work. He started his own mechanics company and in less than 5 years, he had to shut down his fledgling company. What this engineer failed to realize was that though he was enthusiastic and had the skill set, he lacked the patience, doggedness and pure business acumen needed to successfully manage and grow a business. If you start your business for the wrong reasons, when things get tough there will be no reason to remain, there would be nothing to hold on to or fight for. If you must start a business, do it for the right reasons if not it is doomed to fail.
Poor Strategy and Planning
This is another common reason why small businesses fail. For a small business to grow and succeed, it need a good strategy and plan to support it. As an entrepreneur, don’t make the mistake of excessive idealism concerning your business, don’t be so focused on your vision for the business that you forget or neglect creating a strategic plan that factors in important components of your business and addresses them adequately. To ensure business success, take time out to create a good and effective strategic business plan for your business because this is critical to the success or failure of your business.
Unfortunately, as popular a cause of small business failure as this factor is, many small business still continue to fall prey to this major business killer. As a small business, you can not afford to joke with your business management. You just can’t. Don’t be sentimental about this aspect and employ those who can do the job. Even if you find out that you are the person that can’t handle things properly, take sentiments out of it and employ someone who can. Effective business management and leadership skills are essential to business-building success. In fact, even when you eventually grow and become established, you still need good management to continue the success. Make it a priority to develop yourself and strengthen areas where you know you are weak by acquiring the needed skills. In the interim, you can employ someone who can handle things till you get better at it. The same applies to family members also. Try to remember at all times that you cannot afford to be complacent with your business management for any reason, if you truly want your business to succeed.
Expanding Too Quickly
This is another major business killer. Don’t do more than you can handle because as much as growth is good if, as a small business, you grow beyond your own capacity you are bound to crash hard. Many companies have experienced bankruptcy because the business owner’s ‘reach exceeded his/her grasp’ in the area of expansion. Remember that Rome wasn’t built in a day so be patient, tactical, analytical and decide on expansion only after carefully reviewing, researching and analyzing what you will need for the expansion and if your business can handle it. Many small businesses sometimes don’t realize that even growth is a risk and because of that it is important to keep in mind that slow and steady wins the race, so being impulsive about expansion is likely to backfire in the worst possible way.