17 Reasons Why Do Many Businesses Fail In Nigeria And Their Remedies

 Why Do many Businesses Fail In Nigeria



Business failure is not new in any part of the world. However, the most striking observation is that startups and small businesses face this problem more than big businesses. There are several statistics out there about the failure and survival rate of small businesses. 

As an entrepreneur, starting a new business in Nigeria might be a bit difficult especially due to harsh economic environment but aside from this there are other known reasons why business fail in Nigeria.
Some Businesses That Closed Within 5Years Of Starting Operations In Nigeria Include:
  • Efritin
  • GoMyWay
  • Konga Nigeria 
  • OLX
  • Ranona Foods Limited
  • Showroom.ng 
 The most important thing is for you to understand the common reasons why small businesses fail. This is because if you know the common reasons for business failure, you will be able to avoid becoming a victim.
There are many reasons  why businesses fail in Nigeria, some of which are unique to the country, while others are common to businesses around the world. Here are 17 reasons why businesses fail in Nigeria:

1. Lack of capital:The reasons why many businesses fail in Nigeria is due to a lack of capital to start or sustain operations. This is especially true for small and medium-sized enterprises.
why businesses fail is a very wide topic to discuss overtime. 

2. Poor management: Poor management practices such as inadequate planning, lack of strategic direction, and poor financial management are major reasons why businesses fail in Nigeria.

3. Inadequate marketing: Failure to properly promote and market products or services is another reason why businesses fail in Nigeria.

4. Corruption: Corruption is a serious concern in Nigeria, and it can make it difficult for businesses to operate ethically and sustainably.

5. Unfavorable government policies: Unfavorable government policies such as high taxes, tariffs, and regulations can make it difficult for businesses to operate profitably in Nigeria.

6. Lack of infrastructure: Nigeria's infrastructure is often inadequate and unreliable, which can make it difficult for businesses to operate efficiently.

7. Insecurity: Nigeria has a high level of insecurity, including terrorism, kidnapping, and other forms of violence, which can make it difficult for businesses to operate safely.

8. Lack of skilled labor: Nigeria's workforce is often inadequately trained and lacks the necessary skills to support businesses.

9. Competition: Competition in Nigeria can be intense, making it difficult for new businesses to establish themselves.

10. Poor access to credit: Many businesses in Nigeria struggle to access credit, which can make it difficult to finance operations or expand.

11. Economic downturns: Nigeria's economy is often volatile, and businesses can struggle to survive during economic downturns.

12. Lack of innovation: Many businesses in Nigeria fail to innovate, which can make them less competitive over time.

13. Lack of diversification: Many businesses in Nigeria rely too heavily on a single product or service, which can make them vulnerable to market shifts.

14. Inadequate legal framework: Nigeria's legal framework can be complex and difficult to navigate, especially for small businesses.

15. Poor infrastructure: Nigeria's infrastructure is often inadequate and unreliable, which can make it difficult for businesses to operate efficiently.

16. Lack of access to technology: Many businesses in Nigeria lack access to the latest technologies, which can make them less efficient and less competitive.

17. Poor cash flow management: Poor cash flow management is a major reason why businesses fail in Nigeria, as it can make it difficult for businesses.

1. Enough capital need to be provided for the enterprise to move in a stable way, without enough money been used in starting up a business then that particular business may not last.
Before starting a business or been an entrepreneur one need to first of all prepare a good and deserved amount of capital that can sustain that particular enterprise.

2. Good management need to be ensured in the business administration for the success of the enterprise, any organization that lack a good system of governance will certainly go down, so also applied to business.

3. Access to technology and modernization, any business man that wants to achieve his aim in business must give way to any technological development.

4.Innovation is also a very vital key point in starting or managing and existing business whereby creating the chance of competition leads to high rate of sales.

Guworoko Tech

Im from Nigeria. Blogging is part of what i do but not only thing. I purposely choose blogging as one of my works just to help people on their daily activities.

Post a Comment

was this helpful?

Previous Post Next Post