Today we are going to be looking at why young Nigerian business owners fail in business. I think this is very important for you as you move towards starting a business or making your current business profitable and sustainable.
The reason why Young Nigerian business owners and other Africans fail in business is because they started a business. This may sound strange but its true. A lot of young Nigerians make the mistake of starting a business, quiting their job and facing the business fully from day one. This will kill that business.
Now, I know that a lot of experts will ask you to focus all your attention on your new business but they forget that the primary reason why businesses die is when the life blood of that business dries up. That life blood is cashflow.
Young Nigerian business owners fail primarily because their business though is doing well lacks the cashflow to sustain it. A business must first be sustainable with enough cash before it can become profitable.
What this means is that if you start a business with all your savings, then you will kill that business if you quit your job. Young Nigerian business owners need to realize that a profitable new business is still very fragile and cannot carry a lot of financial burden that can come from paying the salary of the founder and the staff.
For instance, my wife started a school but for the first one year, she retained her job. she used the salary she was paid at her job to pay the teachers in her school while ploughing back the school fees into buying what the school needed to grow.
Arnold Schwarzenegger once said that he established a construction company when he started his acting career. That, he said saved him from the desperation that forces new actors to take roles that kill their careers.
This is the mistake that young Nigerian business owners make. They quit their jobs once they start their business. This transfers a huge financial burden onto the new business that eventually strangulates the young business with huge potential to death.
At Kanselor University for instance, the funding for running the university has been coming from our other business because we know that if we place all our financial burden on the school as at now, that it will die.
So, make sure you have enough extra savings that can carter for your needs for at least six months when you start a new business. Try to get some extra source of income as you set up the new business so that the extra income source can sustain you as you nurture your new business to maturity and excess cash and profitability