Why business fail in Nigeria by Clement Sajere
A typical example is the monumental failure of Chief Gabriel Igbinedion’s Business Empire. He once launched into the Airline Industry with his Okada Airline, the business did not succeed. The lesson Chief Gabriel Igbinedion learnt in the airline business were applied to a new opportunity and today he owns a thriving Education outfit with the first registered private University in Nigeria.
why the business failed
Some may wonder why a thriving business will suddenly crash land without prior notice. The success or failure rate of any business is directly proportional to the strength and level of professionalism of the management.
- A weak Management system is a recipe for failure in any enterprise. Management structure must emphasis the job description from up down and each team member must understand what is expected of them. Management plays a crucial role in the survival of any business. There are business ethics, standard and models that top management must deploy in order to achieve success and mitigate failure rate. Globacom Nigeria may not have succeeded if Chief Mike Adenuga had to concern himself with trivialities of who is securing office accommodations or purchasing office furniture for the organization. To be successful, modern businesses must create a strong and vibrant management system.
- Part of the basic requirement for locating an industry in a place, is the availability of raw material within its vicinity. Most times, greed and politics play a vital role in the location of a business. Breaking this sacred law can have its negative impact and consequences. Wrong business location has ultimately led to the gradual death thousand of thriving companies in Nigeria.
- Some entrepreneurs in the haste to make quick bucks quickly set up a business to accomplish their ulterior motives, not minding the basic measure that need to be put in place for sustaining such businesses. Time and time again, people miss the fundamental aim and objectives of setting up a business and choose to chase their personal agenda at the detriment of the corporate goal and mission of the business. Starting a business for the wrong reason can do serious harm to a business in the long run if not properly managed. Wealth is a result of consistently providing solutions to the problem of humanity. Bill Gate created his business around his passion. He never for once dreamt about making a fortune from his business. Value is the origin of profit. Think of adding value to whatever product or service you offer your clients and profit will naturally follow.
- In the year 2001, a fast food company opened a branch of its fast growing franchise in the heart of Sapele, Delta State called Sizzler Fast Food. They were so popular that it took a heck of a time to grab a seat at the peak time every evening. Sublane Fast Food in its quest to grab a share of the fast growing hospitality industry soon came into the fray, but crashed before it had time to take off. The Competition was too fierce for it to survive. The story however changed in the most dramatic manner in the year 2012, when Aroma Foodland was established in a strategic part of Sapele in Delta State. They came prepared as could be seen with the vast expanse of land they acquired and the state of the art equipment they deployed to create an enjoyable experience for fun seekers. Two years after they stormed in the town, Sizzlers Fast Food began to experience low patronage and it eventually folded up in the year 2015. Fierce Competition had taken its toll on the popular fast food company and it gave up in total surrender.Competition is a challenge faced by every business. Most business owners see competition as a plague, but competition is very good. Competition is a benchmark for creativity; it is the main engine that stimulates creativity and innovation. The best way to stay ahead of competition is to be innovative.
- Most Nigerian banks and investors are now refusing to take the risks of providing funds to new businesses. As long as a business is starved of sufficient funds, its growth will be stifled and the possibility of its failure is accelerated. Money is the life wire of every successful business in Nigeria. Bisi Akodu, a partner and head of Corporate Commercial and public sector Group at Olisa Agbakoba Legal while speaking to the press recently shared how poor funding is frustrating SMEs contribution to economy. In her own words: “There are three major problems that affect the growth of Nigerian businesses and these are access to finance, macroeconomic conditions and poor infrastructure. Access to finance is key to the growth of our SME class in Nigeria. Although many government initiatives have been developed to provide solutions to this problem, the problem has continued to persist.
- When a business chooses to pursue secondary goals and neglects its primary purpose of its establishment, such business is said to have lack of focus. Every business has its niche market where it thrives and as long as it stays within its niche market, it continues to pull sufficient profit to keep it afloat. Entrepreneurs can easily be distracted with too many minor tasks. A good business owner will never lose focus on what’s important and where their priorities are. Nothing in life happens by chance. Efforts must be put into a venture for such venture to become successful. The key question every business owner must ask himself is this: “Why am I setting up this business?” I worked at a company where the business owner wasn’t always around. The accountant and the Senior Manager were best of friends and their friendship was as a result of their evil strategies that had seen the company continue to experience losses year in year out. The root cause of the company’s downfall was later traced to internal drain pipes that had been created by these two key management staff. They mismanaged the company funds and ensured the little profit accrued was channeled via illegal contracts that were awarded to dubious companies.
- I once operated a savings account in a now defunct commercial bank in Nigeria. They were so poor in managing their customers that they issued tally containing numbers to each customer and they assigned all customer to just one customer care officer. It was so frustrating that some customers in a bid to wait for their turn fell asleep on the chair they sat on. I learnt early in life the need to treat your customer very well if you want to succeed in business. My mum who managed a small textile business wasn’t educated, but she attended to each customer with a smile and ensure that every loyal customer go home with a gift item during festive seasons. It was common sense that she applied. That wasn’t learnt from the four walls of the University. Poor Customer Service has made huge business enterprises to lose much customers and the end result was decline in revenue and eventual collapse of the entire structure.