In 2020, the number of new businesses in Nigeria increased by 4.76%. However, it still remains an uncommon phenomenon for a new business to survive startup stage as 4 out of every 5 businesses in Nigeria fails within the first 3 years of operation. Thus, only about 20% become actual sustainable businesses. (www.dayoadetiloye.com)
STAGES OF NEW BUSINESS
Every new business and start-up, big or small, goes through stages and knowing the stage where your business is can help you see the solutions you need to implement, create growth strategies, and plan for the future.
I) Startup Stage
Starting a new business is the first stage of a business life-cycle. If a new business survives the first 2 to 3 years and conditions are favorable, it then progresses to growth phase otherwise known as sustainable business.
II) Sustainable Stage
This stage involves developing strategic sales, marketing plan, hiring and managing groups of people and knowing how to acquire strategic inputs such as the right kinds of capital and suppliers. In the sustainable phase, the complexity of decision making changes. There are more and more stakeholders involved, and the level of risk the company can afford declines.
FACTORS MILITATING AGAINST THE GROWTH OF NEW BUSINESSES IN NIGERIA
Findings revealed that new businesses in Nigeria find it hard to build on their operations due to the following factors:
- Lack of consistent power supply and poor road network
- Poor inventory management
- Failure to provide value for money which make customers disgruntled and avoid patronage
- Failure to differentiate products and services in a highly competitive environment,
- Lack of capacity to change in size,
- Conflicts within management, business owners, and/or power struggles.
These factors continue to pose the greatest hindrances to the growth of new and small businesses in Nigeria. (businessday.ng)
Furthermore, finding and retaining the right people is one of the most pressing concerns of business, apart from staying competitive and maintaining service levels.
RECOMMENDATIONS TO ENSURE THE SUSTAINABILITY OF NEW BUSINESSES
So how can new business effectively function?
Keep it simple and understandable
Keep it simple and understandable (KISU) is a design principle which states that designs and/or systems should be as simple as possible. Wherever possible, complexity should be avoided in a system as simplicity guarantees the greatest levels of user acceptance and interaction.
Hence there is a need to:
- Review Your Rules.
- Review Your Customer Experience.
- Determine Your Priorities.
- Identify Issues.
- Simplify Management.
Win the love of your customers
What does it mean to say love your customers?
Focusing on the service your customers receive will ensure they come back for more, which in turn, results in more sales.
Loving your customers is about service, not sales. While customer acquisition is important in any business, there is need to focus on the already acquired customers and continue to earn their trust by being:
- proactive,
- getting creative with marketing tactics
- taking responsibility for actions.
Apply Due Process
The easiest way for a business to fail is lack of integrity. Shortcuts will only get a business as far as eventual failure. When a business follows due process, it has every chance of succeeding.
