Starting a small scale business in Nigeria is a significant achievement for many entrepreneurs, but maintaining one is the larger challenge. Businesses are characterized by ups and downs at every turn, be it small, medium, or large-scale business.
These challenges of make up their success stories and the journey itself. But for this purpose, we will narrow our focus to topmost challenges of small-scale businesses in Nigeria.
A small-scale business is one marked by a limited number of employees and a limited flow of finances and materials. Ford Motors and Wal-Mart are not companies that one would mistake for a small business.
By the same token, it is simply conspicuous enough, that a one-person home business or a mom-and-pop corner candy store are the epitomai of a small business such as school stationery shops, bakeries e.t.c
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It has been statistically proven that about 20% of small businesses fail by the end of their first year, by the fifth year, 50% go under; and by the tenth year, that number rises to 80%.
Whether you are thinking of starting a small business, or in the first few years of operation, here are common problems that occur:
1. Stress in small scale business
The hours, the work, and the constant pressure to perform wear on even the most passionate individuals. Many business owners even successful ones get stuck working much longer hours and harder than their employees.
Plus, they fear their business will stall in their absence, so they avoid taking any time off to recharge. Excessive stress can lead to rash decisions, including the desire to abandon it altogether.
Finding a pace that keeps the business humming without grinding down the owner is a challenge that comes early (and often) in the evolution of a small business.
Therefore, stress levels should be minimized at all costs.
2. Owner Dependence
If you get knocked over by a car, is your business still producing income the next day? A business that can not operate without its owner is a business with a deadline.
Many businesses suffer from owner dependence, and it is often caused by the owner being unable to let go of/delegate certain decisions and responsibilities as the business grows.
Theoretically, meeting this challenge is easy—a business owner merely has to give over more control to employees or partners.
In practice, however, this is a significant stumbling block for founders because it usually involves compromising (at least initially) on the quality of work being done until the person doing the work learns the ropes. Growth should never be the enemy of quality. A small business needs both.
3. Unpredictable Disasters/Economic Uncertainty
Some challenges you face in your business are beyond your control. Natural disasters are unpredictable, that’s why they are referred to as acts of God. As a business owner, you must prepare for any eventuality.
No business is immune from disaster, which means you should always be prepared (just like the Boys Scout motto, lol)
There is also the case of an economic disaster. Depending on which expert you talk to, the economy could either be headed for explosive growth or headed for a recession.
As a small-business owner, you want your business to be strategically placed to deal with whatever comes. Do this by making strategic plans for the entire year carefully in advance.
4. Hiring New Employees
Around the nation and even internationally, many small businesses face employee-hiring troubles. The cost (equipment, benefits, taxes, bonuses, etc.) of hiring new employees, unfortunately, keeps rising.
All those hurdles come into play before outlining the position’s salary. Indeed without employees, a small business cannot run successfully (with the rare exception of home-run businesses).
It is always wise to judge the profit against the cost.
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5. Finding Customers
This isn’t just a small business problem. The marketers at well-known companies like Arla and The house of chi don’t just sit around waiting for the leads to come in even the biggest, most successful companies have people working hard every single day to find new customers.
But for small businesses, the challenge is even more significant. The question usually is, how can you find customers when you’re not a household name? With so many channels to focus on for acquisition, how do you know what to prioritize?
All you need to do is figure out who your target customers are and create awareness. then you can begin creating content that caters specifically to your target demographic and shares it in the channels you know they are in, with the messages you know they care about.
6. Delighting Customers/Clients
Customer satisfaction is a great goal, but customer delight is a better one. Positive service experiences entice customers to make additional purchases and repeat loyal customers spend more, satisfied customers engage in word-of-mouth marketing, helping you with the free acquisition.
Trust me, It is cheaper to retain an existing, satisfied customer than it is to acquire a new one. Unfortunately, as a small business, it can be tough to delight customers in the way they desire.
- Some ways to overcome this include:
- Understanding why your customers chose you and what they need
- Set concrete expectations at the start of the engagement
- Deliver on and if possible, surpass those expectations (and satisfy your customers’ needs)
- Continue to measure satisfaction and improve your customer experience
- When you understand your customers’ needs, expectations, and cater to their desires, it will pay off.
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7. Artificial Intelligence (AI)
As a small business owner, technology is either your friend or your enemy, depending on your choice. Most businesses are beginning to see the benefits that come with AI and have started to implement it in their businesses.
Ultimately, whether AI is a good thing for your business is entirely up to you. You need to make that decision. Good thing is, you don’t have to dive in with both feet; start small and see how it goes.
If you have a website, (you should) integrate some chat-bots to help with customer service
Conclusion
Conclusively, as a small business owner, it is important to remember that a challenge simply presents another opportunity for you to keep striving.