So you have suddenly come up with that million-Naira business idea. What next? Time to bring this business idea to life, right? Well, it is not that straightforward. Let no motivational speaker deceive you. If you do not plan properly, you will run into business mistakes that may ruin your business and dash your million-Naira idea out for free. This post lists some of the top mistakes that new business owners make in Nigeria.
In a bid to rush into the business, many business owners have made mistakes that eventually proved costly. This is not just a foreign thing. Business owners make costly business mistakes, even here in Nigeria.
Imagine having to shut down your business after investing hundreds of thousands of Naira into it. In fact, in some cases, it is up to millions of Naira. Imagine losing all the employees you have managed to make, all because of avoidable business mistakes.
We do not want you to make such mistakes. So we are giving you a list of mistakes that business owners often make in Nigeria. Check out the list and be sure to avoid them in your business endeavours.
Top 10 Mistakes that New Business Owners make in Nigeria
1. Starting a Business without a Business Plan
This may seem like a trivial issue when starting a business in Nigeria, but it has actually cost many people a lot of money to rectify this. In fact, it has cost many people their businesses in totality. The need for a business plan cannot be over-emphasised.
When starting anything of value in life, it is necessary to have a plan. If you do not draw up a plan, you are almost definitely working towards doom. Of course, some people have managed to eventually find a way around this later, it may not work for you that way.
Before you start out on your business endeavour, you need to draw up a plan. You need to figure out how you intend to achieve your business end goal. This is not something that you just think up in your head. You need to write out your plans so that you are able to follow them strictly.
When you have a business plan, you already know where you want your business to head to. You also know the necessary steps to take towards the success of your business. This makes it easy for you to carry out your daily business activities the proper way.
2. Setting Short-Term Goals with no Long-Term Vision
This is one of the most common mistakes in the business world, even in Nigeria. Ask a new fashion designer what their end goal is for starting that business, and you will likely not get any smart answer. A lot of new business owners are just into the business to feed. This is the difference between “menial” business owners and the people who own huge business conglomerates.
If you do not have a long-term vision for your business, then you will only remain on a spot. With just short-term goals, you will be okay with making just enough money to feed yourself. Why not consider where you want your business to be in the next 5 or 10 years?
Do not just talk about how you want your business to be there to put food in your mouth. Talk about how you want the business to grow. Talk about how you want the business to take on similar businesses that have grown to certain levels. Most importantly, try to write out your long-term vision and follow it judiciously.
3. Having no Target Market or Customer Base in Mind
It’s funny how many new business owners think, “This is a wonderful product. Of course, people will buy it.” Or “Everyone needs to have this. I’m sure there’s a large number of people waiting to buy.” This is a very big business mistake, and it has cost many people huge amounts of money.
Before you launch that business, you need to have a target market or customer base or a specific audience in mind. It may be difficult but it is usually worth it. Sometimes, you need to talk to people first. Be sure of their problems and be ready to offer them solutions.
You need to have a target market before rushing into the business. No matter how good your business is, not everyone will be interested in it. No matter how much people need your products, not everyone will be interested in getting it from you.
Having a target market or specific audience in mind when starting your business ensures that you already have potential customers even before launching your business.
4. Choosing a Niche instead of a Great Idea
Many “Business gurus” will advise you to consider going for a niche when starting a new business. On the surface, this is a wonderful idea. It may seem like a perfect idea to take advantage of an untapped niche. There is little or no competition, you know?
However, going for a niche is a terrible idea unless it is a truly great idea. The bottom line is that it is the idea, not the niche in itself, that will make your business succeed.
When going for a niche business idea, you are intentionally limiting the scope of your business. This leaves very little room to grow and expand. This is a bad idea unless the niche is underlined by a great idea. Many business owners eventually learn this the hard way and struggle to make their businesses cover more areas.
5. Choosing a Broad Market instead of a Great Niche Market
This is another mistake that many new business owners commonly make in Nigeria. Someone wakes up one day and goes “Everyone is making so much money in this business. Maybe I should start it too.” Oh, a very bad idea!
You should build your business on the basis of a great idea, not on the basis of other people’s successes. Sometimes, that broad market is not the market for you. A niche market is more focused and offers less competition. As stated in the point above, this could be good or bad for your business. It all depends on the idea that you are selling.
Why go for what everyone is doing when you can start something that no one is doing? Everyone is making money selling clothes, shoes, and jewellery. Why don’t you start selling just shoes? In fact, why don’t you start selling just men’s shoes?
The good thing about a niche market is that you are known for something. When I need men’s shoes, I would rather go to a store that is focused on men’s shoes than one focused on general fashion items. When I need information about finance and the state of the Naira, I would rather go to a website like Nairametrics than a general blog.
Again, the bottom line is that you should make sure you are going for a great idea, not just how narrow the niche is. A niche business that is based on a terrible idea will definitely yield terrible results.
6. Hiring for Expense instead of for Expertise or Experience
It is very easy for a new business owner to consider hiring people for cheap. Of course, you may even get twice as many people on board for the same price. However, is it really worth it?
In the short run, it may be like a wonderful idea to hire people for cheap rather than for expertise or experience. But in the long run, this will work against your business. This is considering a situation where you have to choose between expenses and expertise. There may be situations where you may get an expert without spending much too. However, when it becomes an option, choose expertise and experience. Many business owners choose cheap labour and regret it later in the business. Do not make this mistake.
7. Choosing a Bad Location for your Business
The fact that Mr A’s business is thriving at Location A does not necessarily mean that Mr B’s business will succeed there. Many new business owners in Nigeria keep making this mistake and keep wondering why their businesses are failing.
The issue of location is very important when starting your new business. This may be what makes or mars your business. Imagine starting a phone repair business in a place that is so far from town that one would literally have to “travel” go get there. Or imagine setting up an auto-repair shop in a place that is not accessible by cars. Of course, the business is set to die.
Now, when it comes to online businesses, there is more flexibility in choosing a physical location. This is because one may even decide to hire remote team members that may not need to come to a physical office. In some cases, this cuts down the need for a physical office space. However, in cases where physical office space is needed, the location needs to be considered for optimal business growth.
8. Keeping your Business to yourself
When it comes to business, you need to sell yourself. Some business owners claim to be shy and say that they cannot pitch their businesses to potential customers. This is a big NO if you are really interested in the growth of your business.
Think about this; when you launch your business, you are probably the only one who knows about it. Okay, maybe your family members and close friends too. So how do you make sure that your other potential customers out there know about your business? You tell them about it!
Social Media has made this even easier. Now, as a new business owner, you do not necessarily have to go from door to door or pay for a newspaper advertisement. All you have to do is give your business an online presence and let your potential customers know about it.
Do not keep your new business to yourself. Let others know about it. That person that you’re shying away from telling about your business is probably your next customer. If you believe in your business, then be proud to let others know about it.
9. Not keeping Financial Records
That business may be in its infancy stage but you should definitely start keeping financial records. Many startups and new business owners fail to recognise how important this actually is.
You need to know how much you are making and how much you are spending. If you do not keep a record of this, you will not even realise when you start spending more than your profits.
A lot of new business owners have the idea that keeping financial records is only for big businesses. That is a myth. It is important for small and new businesses to keep financial records too. This helps you to be accountable in your new business.
10. Sacrificing Quality for Speed
Of course, you are excited about your new businesses and you want to work as fast as you can. This, in itself, is a good thing. However, you need to make sure that this speed is not at the expense of quality.
It does not matter how fast your business is moving, if you are not giving your customers the high quality they expect, you will eventually lose them. Speed is good, but quality is too big a sacrifice for it.
At the end of the day, it is all about finding the balance. You do not want your business to move too slowly but below-par performance is definitely terrible. Moving quickly is good but when you do it beyond your team’s capability to produce quality results, then the speed backfires.
More Mistakes that New Business Owners make in Nigeria
Here are some other mistakes that new business owners make in Nigeria:
- > Burning Cash too quickly.
- > Ignoring the Competition.
- > Refusing to move with Trends.
So, there you have a list of some of the top mistakes that new business owners make in Nigeria. Note that the list is not exhaustive, and there are many other mistakes that you can make as a new business owner.
Running a successful business in Nigeria is definitely not a walk in the park. However, by avoiding the business mistakes outlined in this post, you can give yourself an edge. Avoiding these mistakes means putting your best foot forward and escaping the pitfalls that commonly swallow new businesses in Nigeria.
Even after avoiding these mistakes, your business success does not suddenly become automatic. You still need a solid business idea, a well-drawn plan, and great marketing and sales techniques. However, with the mistakes out of the way, you now have more time to focus on actually growing your business.
Have you ever made any of these business mistakes? What other mistakes do you think new business owners make in Nigeria? Do share with us in the Comments section below.
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