.It is estimated that up to 80 percent of small businesses do not live up to their first birthday. It is like they fail even before they start. To my judgement I don’t think there is anyone who would really want to open a business knowing very well it is not going to stand. Without any doubt people starts business for many reasons, but whatever the reason of starting one is, I think everyone would want their start-up to make it through.
The prominent reasons why business fails particularly in Africa is because most businesses are started without a good vision of where the business is headed, therefore any direction becomes viable a long the way. It is always good to have some sense of direction both in personal level and as a business, this way you are able to easily know when you start getting off the track. Though one may not be able to tell everything about their future because there are many unforeseen challenges and opportunities lined up ahead, but the must be a preferred destination.
An elusive niche is one of the things that can cause a perpetual headache to any entrepreneur no matter how passionate and dedicated they could be. Therefore, it calls for proper evaluation of the niche that is perceived as potential business opportunity before it is adopted. Businesses are simply providers of solutions to needs of individuals and organizations, meaning a niche must not be imaginary, but tangible in the sense that it can be proven using acceptable metrics. Before you start a business, just imagine it is in existence and then you pull it down, would any of your customers terribly miss your services or products?
Starting and running a business requires constant funding, as you start you require capital for machinery or inventory. During an expansion another round of funding will be required which in most cases is way higher than what retained profits can afford. This therefore calls for proper financial plan that will get you through starting stage and subsequent rounds of expansions or upgrading.
Hiring and maintaining the wrong workforce is a serious impediment to business success. Unless you are starting a business that will remain small enough to be operated by yourself alone, as the business grows human capital requirement will also grow. The criteria that you will use to hire your employees will determine how successful the growth of your business will be. On which bases are you going to recruit and hire? Are you going to consider relevant skills and experience or relationships and affiliations?
The changes in technology and customer taste and preference are happening quite swiftly nowadays, requiring business managements and owners to develop and maintain a learning commitment. Individuals and organizations that maintains relevance long enough to realize a competitive advantage are those that have insatiable hungry for knowledge concerning a certain subject matters. So failure to learn is failure to run!
There are other many more factors that leads to business failure in Africa like, inaction, lack of consistency, poor inventory management, failure to delegate, lack of data, refusal to pivot, poor customer follow-ups, etc.
It is my hope that what we have learned in this post will be useful to you, your friends and loved ones. You are welcome to comment and share.