Why do many startup businesses fail? This is a question many business owners ask themselves where did it all go wrong some could answer it and others can’t. No matter how solid your business idea is sometimes the unexpected happens. Every day new businesses spring up in Nigeria and also every day familiar ones are no way to be found.
Nigeria is one most valuable and biggest startup eco-system in Africa surpassing other African countries such as Kenya and South-Africa so there is a market for whatever product you are selling. Although, there is also a chance your product might be a flop in the market.
Tech companies keep springing up everywhere in the country but it’s a well-known fact that Lagos and Abuja are been called the silicon valley of the country according to qz.com. In that case, Why do many startup businesses fail?
One of the biggest problems of startups in Nigeria is mismanagement according to some venture capitalist. The moment they get funds they get a nice expensive office with no plan of rent renewal and start getting gadgets and accessories that will not help the business.
However, its good to spend money but also ensure you are making more than you are spending. As a matter of facts, some go as far as making a big advert like the top dogs in their business but nothing to show for it. My mother always says save for raining day some startup always think that day will never happen and it hit them by surprise.
As a young startup just growing there is going to be sugar rush but remembering where you are coming from and where you are going too is the main focus to go about things. so many startup waste company resources on things that will not add value to the company and when questioned they just give excuses.
No Future Plan / Short Plans
Planning they say is important in everything we do. Although, some startup don’t look at the long run they believe in how much they can make on the short term and are much happy with it no long term prospect.
Nevertheless, the majority of the startup is much interested in the title they get (AKA CEO) instead of how much work they can get done and moving things forward.
With all being said running a business is not easy a task has chances of failing are very high and to be successful at it one need to consistent, patient, and not lose focus on your goals.
Majority of the entrepreneur forget why they started the business in the first place the moment things don’t go as plan and results do not match expectation they drop the towel.
Poor Marketing / Wrong Marketing
Every business owner knows the importance of marketing however, it’s not cheap, nonetheless, a majority of the startups in Nigeria particularly the ones in the information technology field never do their homework well before building a product/solutions.
Things like who is my target and how do I get to them is very much overlooked when developing a product until when the solution is ready. Knowing your target audience and how to get their attention and keeping them coming back as a customer is what keeps businesses on the block.
If you aim to win in business you need a great product but that only won’t do the magic you will need a good marketing strategy/plan to deliver the product to your respective clients.
Related Post: 5 tips on how not to fail has a startup or new business
Bad Customer Service
Having a good customer relationship with your client is the best thing in business. Many business owners don’t understand you have to be able to play the emotion game to get results.
Understand your client how to tailor your services to them keeps them coming back to you but if you can say simple things like thank you for shopping with us today and hope to see you again soon doing that you are planting an idea of appreciated in their mind and people loved being appreciated.
Picking the wrong Product / Services
Many entrepreneurs have ventured into business because they had from a friend XYZ is the vogue in now without making their own research if its right product for them and their respective customers.
Having invested time, energy and resource reality tells on them. As a business owner its good to always know why you are investing into a product and if the out of the benefit will add value to your company and increase revenue but its the way around with most of the startup we have today.
We believe many startup business failures could be avoided if proper planning and well in-depth research could be carried out before a lunch of a product.
Research only is not what all startups need a good mentor as well can help them make the business flourish and bloom they say behind every successful man there is always a woman.
In conclusion, we hope to have touched some reasons why businesses fail but nonetheless, a business might do all the above and for some reasons, they might still fail. We will love to hear your experience in the comment section.