Nigerian entrepreneur and Founder of Money Africa, Oluwatosin Olaseinde, took to her Twitter page over the weekend to explain why many businesses can’t kick start in Nigeria.
Poverty and Low Purchasing Power are to blame
According to her, Poverty and low purchasing power are the main reasosn why a lot of businesses fail to kick start in the country.
Sharing further, she stated that even though businesses need to scale, they are often limited because their founders cannot afford the costs that comes with doing that. Moreover, there are way too many businesses fighting for limited and low disposable income, she said.
Poverty and low purchasing power is the reason why a lot of businesses can't kick off in Nigeria
At the end of the day
The business needs to scale
But how many people can afford itDifferent businesses fighting for limited/low disposable income
— Olúwatósìn Olaseinde (@tosinolaseinde) April 21, 2019
The need to invest mainly in essential products
Many of Oluwatosin’s followers agreed with her perspective. Some, however, suggested that in order for Nigerian entrepreneurs to beat the odd and flourish in the Nigerian market, their business models must begin to focus on the production and merchandising of essentials such as food, clothes, and drugs. This is because the need for such items never runs out.
People will keep buying essentials. Food, clothes, drugs.
[An Indian pharmaceutical company in Nigeria made rev of 800m last year].
Finding the right market entry strategy to capture your share is key!— Simi (@JSBabasanmi) April 21, 2019
Another follower opined that another way entrepreneurs can beat the market is to either focus on providing essential commodities as enumerated above, or ensure that they earn in dollars; in other words, export their products.
Deal in the essentials, or make sure you earn in dollars(export).
Anything else, is a little tougher
— Simi (@JSBabasanmi) April 21, 2019
Competition is also a problem
Meanwhile, inasmuch as it is important for entrepreneurs to focus on the production of essential commodities, the fact remains that the weak purchasing power of most Nigerians remain a major issue to contend with. This is according to another follower of Oluwatosin, who also argued that competition is yet another problem that may be hindering some businesses from growing.
The problem isn’t the deal. It lies with the purchasing power here and competition when you eventually begin
— Otunba Iperu-Remo (@SirBusayoAmusan) April 21, 2019
Many other factors could also be responsible for business failure
In Nigeria, new businesses spring up almost on a daily business. However, the unfortunate pattern is that these new businesses seldom last. This is due to a whole lot more factors other than the ones enumerated above.
The truth is that running a business can be tough. Even when a business owner has the most perfect business idea/product, such a business can still fail. This is because there are other factors that can militate against business success. See below:
- Lack of long term vision and goal,
- Absence of Brand Identity,
- Improper account reporting,
- Inadequate use of technology,
- Poor business packaging,
- Lack of ethics and conducts.