Having a great idea or product, brimming with enthusiasm and confidence that Nigeria and the rest of the world would key into your business is only the beginning of your journey. The road ahead will certainly be filled with speed bumps and potholes, from competitions and internal disputes within your company to inadequate resources and funding challenges. The irony though is that most times, potential startups in Nigeria get carried away by the excitement of their ideas, plans, or services; as a result, most of these SMEs end up making some avoidable but devastating mistakes.
- Inaccurate or No Record-Keeping.
Successful SMEs in Nigeria understand the importance of keeping accurate records of their daily business activities. Keeping records is the holy grail of surviving, and as a young business owner in Nigeria, you should pay special attention to this. Accurately kept business records serve not only as great sources of reference but can become handy when any issue arises. Records can also be helpful when tracking the growth of your business and monitoring tasks assigned to your team members. Profit is not the same as cash flow, and your records would go a long way to stop you from mistaking one for the other. Be sure to keep close tabs on accounts receivable and do your best to ensure customers can pay you quickly before doing business with them.
- Not Protecting Your Intellectual Property.
We all can agree that it is almost always a good idea to have your products tested before you introduce it to your target market. The challenge startups in Nigeria face is that it is very easy to have your original idea shamelessly copied by the lazy entrepreneur next door. It is important to nip this in the bud by taking measures to protect your ideas as fast as possible. You can do this by registering your company with CAC; having your potential investors sign a non-disclosure agreement before showing them your products; or by patenting your products. The mistake many SMEs in Nigeria make is waiting until they have legal problems before consulting a lawyer. The chances are that the longer you wait, the higher you will be paying in legal fees when issues arise than you would have paid had you retained a lawyer to protect your business in the first place.
- Lack of A Clear Business Strategy.
The harsh reality for startups in Nigeria is that simply knowing how to engage in the activities of buying and selling won’t cut it. Business management is a skill, and sometimes the best way to learn is to map out a clear business strategy for your growing business. If you ask one or more SMEs in Nigeria today what their business goal is, I’m willing to bet that a vast majority of them would say that they want their business to be the biggest in the country. If you ask further, you will find to your disbelief that there are startups who do not even know what a business strategy is, let alone having one. You can’t start and run your business without a simple business plan or a concrete approach to drive growth.
- Unrealistic Expectations and Lack of Patience.
Most startups in Nigeria are so excited about getting returns from the sales of their products or services rendered; they forget that all good things take time. Monet planted his garden before he painted them, but most startup founders in Nigeria are so impatient that they expect to become the next big thing overnight. Business success does not equate to blowing up the proceeds of your business in a bid to maintain the facade of a successful founder. Reinvest your profits into the business and plan for it’s long term growth. Be patient with the process and understand that all good things do take time. You will eventually reap the benefits of your commitment, but it will take longer than you’d prefer. And that’s okay.
- Complicating Your Central Message.
Another common mistake startups in Nigeria make is the assumption that the average consumer is willing to give them more than a few seconds of their attention as far as their business messages go. This often results in a complication of what should otherwise be a simple enough message and the more confused your customers feel about your product, the less likely they are to patronise your business. Keep your central business message as straightforward as possible while also appealing to the emotions of your target customers. You can demonstrate that to people that already are keying into your idea without being unnecessarily verbose. Remember, the easier your business message is, the more relatable your customers will find your idea, and that is how you win.
- Hiring The Wrong People.
Not hiring the right people is a costly mistake, and it has led to the demise of many SMEs in Nigeria in the past few decades. It’s a difficult thing to get right, but it pays to put as much effort as possible into recruiting and retaining the best people for the job. Hiring the wrong people for the wrong reasons will damage your business. If an employee or team member is unqualified or unmotivated, they’re not going to do the work you need to be done.
- Not Identifying Your Target Customers.
It is crucial that as a startup founder to know the types of customers, you need to advertise to sustain your business model. You cannot hope to make a product targeted at the whole world because it would be near-impossible to gauge the reactions and feedback to your services. You’re better off starting with a smaller target group, advertising consistently to them and seeing how well they accept your product. That way, you can fix your ideas to better suit their needs before moving on to a wider target range.
- Being Afraid to Pivot.
Successful SMEs in Nigeria understand the need to remain flexible with your business plan. As you grow as a startup founder, you will realise that some elements of your business plan can change completely, if you hit some administrative bottlenecks. No matter how much time you spend on your business plan, you’re not going to foresee some of the challenges that you’ll face, so don’t let the fear of changing your ideas hold you back. Be flexible and embrace pivoting early on. Don’t let obstacles get you down; they’ve happened to every single business. Most times, it seems like all hope is lost in the entrepreneurial journey of many startup founders when all they needed to do was pivot and try again.
- Rushing to Be First to Market.
There’s a culture of panic that often makes startups in Nigeria so anxious about the need to be the first company to market, such that they rush into the market too soon. This never ends well for SMEs in Nigeria because the first to market is not always the consistent market leader. You need to take your time and plan out your launch. To be clear, I’m not advising to procrastinate your launch. Far from it, don’t launch prematurely merely because you don’t want another venture to launch before you do. If you do, you are only starting on the wrong motives, and the result would be the end of your business before it even begins fully.
- Not Separating Personal Income From Business Income.
It’s imperative to keep your personal finances separate from your business finances, but most startups in Nigeria don’t practice this. Don’t view your business proceeds as your allowance or you would be digging your own grave. Of course, you could pay yourself and your team members a modest salary, but there should still be a clear line between personal and business finances. Create a business checking account and a personal checking account to keep these different funds separately. Endeavour to maintain a business credit card, in addition to any personal cards that you have. This way, you will be sure that you are running a business, even if it’s a one-person operation.
Finally, remember that it won’t be easy. You’re bound to make a few mistakes from time to time, but your business will survive as long as you learn from those mistakes quickly. The most important thing is to start, and when you fail, get up and begin again.
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