by Umar Farouk Kabir | Nov 15, 2021 | Business & Finance
A lot of people these days are drawn to business for numerous reasons. Everyone wants financial freedom, having to call the shots yourself without being answerable to anybody. A business offers you that and so much more. Over the years, the numbers of individuals going into businesses have actually increased, but have you ever wondered about the success rates of all these startup businesses? It is quite disquieting to learn that a whopping 90% of startups fail. A study carried out back in 2019 discovered that 9 out of 10 startup businesses fail.
The numbers are scary, aren’t they? In this article, you’ll get to learn why nearly a hundred per cent of startup businesses fail and what to do about it.
Why 90% of Startups Fail
1. Inadequate Creativity
One of the reasons why 90% of startup businesses fail is due to a lack of creativity. Business is a combination of science and art if we’re being frank. Creativity is crucial to the success of any business. An entrepreneur needs to be creative enough to bring fresh and bright ideas to market their products and services in such a way that customers are drawn to them.
Wanting to go into business and having the capital to finance it isn’t enough, you need innovation in order to stay ahead of the curve. There are so many business ideas out there. This makes the competition pretty stiff. Jumping head-first into the business sector without a solid blueprint is just another recipe for disaster.
The solution to this is not to rush head-first into anything. Take your time. Think of ways to make your products and services unique. Come up with something new and fresh. Customers love new products, fun products, products that scream innovation.
2. Insufficient Research
Another reason why 90% of new businesses fail is insufficient knowledge backing them. For a startup business to be successful, proper and adequate research must be carried out regarding the products and market availability. This is one of the first things you need to know as an entrepreneur.
What is the general public in need of right now? Is the market readily available for me?
How much would it cost to finance this business?
What is the competition like and how can I stay ahead?
How do I generate clout for my business?
You need to ask yourself these questions and set out to find the solutions to these problems.
Check out these steps to help you make proper market research for starting up a business
3. Trying to Create the Perfect Product Right from the Get-Go
The problem with trying to create the perfect product at an early stage is that, regardless of all the hours put into research, you might still come up short in a real-world application. What you need isn’t a perfect product from the start, what you need is MVP.
No, not the most valuable player but Minimum Viable Product.
Minimum Viable Product refers to any version of a commodity that has enough features to be usable by early-stage consumers who can critique and provide feedback for the further development of said commodity. This is a very useful technique in the sense that by the time the product is fully developed, it will be something that customers really want for the reason that it was developed according to their taste.
Customer satisfaction is always a top priority for any business, and what better way is there to satisfy customers than to give them exactly what they want?
4. Lack of Desire and Passion for the Business
This is something that you should truly focus on a mental level. Let’s face it; the majority of people go into various businesses in order to make money. But if money is your only motivation, then it’s safe to say that your startup is bound to fail.
You need the desire and passion to seek to make a difference in the market with your goods and services. The need to make a difference will invariably fuel your innovation and push you to do more, to be more. Success doesn’t come without desire and perseverance.
A solid reason why 90% of startups fail is that entrepreneurs give up easily once they hit a bump in the road. Those who desire success dig in deep and find innovative ways to bypass their challenges, and in so doing, they open doors of opportunities for themselves.
Passion is one of the best qualities of an entrepreneureur, and if you lack it. Well…
5. Building a Business with the Wrong Team
As your business grows, you will need to keep up with the pace by hiring a team. It could be just one person or more, regardless, the type of people you hire will have an impact on your business. You do not hire an engineer to do the work of a doctor.
To avoid falling into the 90% statistic of failed startups, take your time and search around for the best people to help build your business to the level you want. We all need some help at some point in time, so why not get the best possible help for your business?
6. Inability to Adapt to Changes in the Industry
Another reason why 90% of startups fail is their inability to adapt. In order to be among the 10% who see their startup businesses thrive, you must be able to adapt to situations.
A market can be a turbulent place as things are in constant motion. Being able to adapt to these changes, even going as far as making those changes work in your favour is a priceless skill. With it, you will not only have the upper hand in dealing with competitors, but you will also have longevity in the business.
You must be able to see these changes and act accordingly in ways that will see you succeed.
90% of startup businesses fail because the business owners are unable to adapt.
7. Funding Issues
Another top reason why 90% of startups fail is largely due to funding; overfunding or underfunding. Underfunding occurs primarily due to insufficient research by the entrepreneur. When you venture into a business underestimating the cost to run that business, it will inevitably crash.
You might raise an eyebrow at how overfunding could make your startup fail. I mean, isn’t lots of money good? You may be right but not entirely. Overfunding for startups is a double-edged sword. When there are excess funds for a startup, it speeds up development and the business expands rapidly.
That sounds great, doesn’t it? Well, here comes the tricky part; when a startup business expands at that speed, it gives rise to more expenses in hiring personnel, product development, and marketing. The warning light illuminates when revenue can’t keep up with the massive expenses; this is what experts call a negative operating cash flow.
A startup may fail due to any of the reasons mentioned above. A problem known is half solved, isn’t it? If you are just starting a new business, you will do well to read this article carefully and avoid the mistakes that lead 90% of startup businesses to failure.
This article was written to help be part of the 10% that succeed.
by Johnson Temiloluwa | Oct 17, 2021 | Business & Finance
Doing business anywhere can be tough. But it doesn’t have to be. When you have a business plan in Nigeria, your venture can be much easier than you think. A business plan is an invaluable tool that guides your business and prepares you for future risk. This article will show you how to write a good business plan in Nigeria.
What Is a Business Plan?
A business plan, as the name implies, is a plan for a business (usually a new business) in a written document that gives a sketch, describes, and draws in detail how the business will achieve, reach, execute and accomplish its goals. It is a writing conveying information that outlines the operational and financial aims of a business. It is safe to call it “the business strategy” or “road map”. There are specific step by step guides for writing a good business plan.
Aside from the common mistake that most entrepreneurs make in their business, quite a number of businesses have started and crashed down because of a poorly written business plan or the lack of one. Having a good business plan in Nigeria will serve as a guide through every stage of your business from starting to managing and even dealing with your profits. A business plan can also be used to help you get loans from banks and get people to invest in your business. Likewise, securing grants for your business.
I know how confusing it might seem, and that’s why I’ll be sharing with you 9 easy steps to guide you in writing a business plan in Nigeria:
1. Executive Summary
Here is an important part of your business plan because this is the first part that the reader encounters. It should contain everything about your business including your mission, your objectives, business background, and keys to success. While you must cover everything on this page, be sure to keep it straight to the point.
2. Business Description Summary
In this section, you should state the nature of your business, who your target audience is, and what gives your business an advantage against the others. Be sure to define the services you offer clearly and the problems you hope to solve. Perhaps, you want to run a business of dried fruits, under this section, you’d state that you hope to solve the problem of fruit spoilage when large purchases have been made or for a long time.
This is an essential part of writing your business plan in Nigeria. It will give whoever is reading your plan a true insight into what you’re doing and if they should invest or give you a loan. If you have a location where your business is located, it should be mentioned here too. Your business description should contain all of your strengths and should be appealing to whoever reads it.
3. Product and Service Summary
You cannot write a business plan in Nigeria without in-depth details of the things your business is about.
What sort of products are you producing? What are the services you offer? Are those the only products and services you will offer? Do you intend to add more? Where do you get your raw materials from? How much does it cost you to get a full batch of production? How much profit return does your product bring back?
These are the questions the product and service summary section answer.
4. Market Analysis Summary
Before writing this, you will need to conduct a SWOT analysis. SWOT stands for Strength, Weakness, Opportunity, and Threats. This analysis will show you what other businesses are doing, what is the trend and theme related to your business, what’s its position and value in the large-scale market. It’ll help you understand who your competitors are, their strengths, what do successful competitors do? How it works.
After knowing all of that, you should include it in your plan and also, plan strategies on how you can do it better than they did. This is really an essential step in writing a business plan in this country.
5. Management Summary
Here, details of how the business or company is being run, about yourself, and partners you might have (if you are not running it alone) should be noted. How many shares do you have and how much percentage do your partners have?
In addition, include the team that runs the business and highlight their expertise and abilities. It’s safe to mention notable staff, their roles, and talents also. You should also include your plans of getting more people in the team as your business expands if you have any.
6. Strategy and Implementation Summary
In this aspect, it should contain details about how you intend to interact with your target audience – your customers. You should include your brand message, planned advertisements, and promotions that will attract people to your brand.
Furthermore, sales representatives and marketing agents, as well as methods of marketing and outreach, should be included with the strengths. In addition, it should include the advantages your business has over others and how you intend to use that to your sales advantage.
This is a crucial part of your business plan in Nigeria. It plays an important role in convincing your investors that investing will not make them suffer losses.
7. Financial Summary
Here is also an important part of your plan and should include accurate and up-to-date details of your finances. You should include cash flow statements, assets, debts if you have any. More so, the financial state of your business should also be up to date at the time of writing the plan.
You should also include how your finances are being managed, how revenue is being generated. Again, you should include who is in charge of finances, how accurate your financial predictions have been, and if you have been able to reach the goals you set out.
At a glance, your readers should be able to tell if your business is in a healthy cash position or not. If your business is just starting, be sure to include the present relevant details and avoid including false or twisted information.
8. Funding Request
There might not be a need to include this if you do not intend to ask for a loan or grant. This should contain how much you need and details on how the funds acquired would be spent. Additionally, if you are getting a loan, indicate your payment plan and if it is an investment, state the benefits that the investor would gain from their investment in your business.
You should make sure that the details you provide are accurate and detailed to clear every doubt your reader might have.
Lastly, this should contain other information you may want to add including legal documents, contracts, etc.
Now, with your understanding on how to write a business plan in Nigeria, be sure to be straight to the point and honest with every detail you provide. If you’re still confused, you can head over to a site called bplan. There you can get different samples to practice with.
For people who have so much on their hands or can’t just find time to write a business plan themselves, just visit Mediahooch. They handle writing business and every or anything regarding branding and marketing, can be professionally executed by them.
You should also check out tips for new business owners, this will greatly help your business.