Starting a small business is always risky, and the chance of success is slim.
According to the U.S. Small Business Administration, over 50% of small businesses fail in the first year and 95% fail within the first five years.
Even with provision of the necessary things to run a business. i.e Constant electricity, good road and transportation system,available bank loans and minimal taxation.
In Nigeria, There is no constant electricity, transportation system does not work, banks won't give out loan to small businesses and small businesses are over taxed, now tell me how a small business can survive ?
Michael Ames In his book Small Business Management, gives the following reasons for small business failure:
Lack of experience
Insufficient capital (money)
Poor inventory management
Over-investment in fixed assets
Poor credit arrangements
personal use of business funds
And I added Epileptic Power supply - This is a big challenge and a threat to Small businesses in Nigeria.
And from Gustav Berle, he added: Competition and Low Sales as one of the reasons why small business fail
"I was sincere in my YouWin business plan, I requested for 4 million and Promised to Employ 5 Unemployed Nigerians but my business plan was turned down.
The reasons I guess may be due to the high capital demanded and low number of persons to employ but Considering the cost of running a business in Lagos i.e Rent,Transportion, Electricity/Generator bills, LG bills, Abero Bills, Double taxation and salaries.
If I had requested less than 4 million and promised to employ 100 unemployed Nigerians, my business plan might be selected but guess what - the business will fail within a year!
In my business plan, I intended to pay the minimum wage and was ready to increase the pay on a yearly basis just to motivate them and to make them more productive but was turned down.
For those that were selected how many unemployed Nigerians did you promised to employ and how much will you pay your staff ?
If you promised to pay 18k and you also promised to employ let say 100 unemployed Nigerians and you were giving 2 million, Your business will fail in two months."
His comment I'll say it not to scare anyone but to prepare you for the rocky path ahead.
Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face.
However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.
We see many firms, launching different kind of initiative business idea programs and in turn gives grant for productive business startups.
Some of this are:
-Etisalat Easy Business Millionaire Hunt,
-YouWin Programme by the Federal Government and quite some other few ones.
The highest among them all is YouWin which gives Entrepreneurs upto 10million naira grant.
Looking at the above writing, do you think it will be easy to be among the successful ones?
I wish you the best of luck in your endeavor but remember its not going to be easy believe me.
To be among the successful 30%, you must work round the clock.
Comment Source: NL