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5 Pitfalls To Watch Out For In Your Business

5 Pitfalls To Watch Out For In Your Business

Doing business in Nigeria can be very profitable and rewarding but many still wonder why some are doing well and their business is nothing to write home about. Anybody can start business but not everyone who starts the business soar after 3 year or 5 years of starting; many great business idea die along the way. What could have been responsible for this? In this edition, I will share with you 5 practices that kill business fast, share some experience with you and bring out the moral lessons so that you can identify the mistakes that could drown your business and take caution. If you find your business along this route, you make a U turn and cling on to business wisdom that works. The business mistakes are as follow!

1. Recruiting staff on Emotions: Many businessmen see their business as way to make some people happy or as a means of paying back “Bad” people in their own coin. They employ unskillful family and friends in other to make someone happy and compensating the goodwill shown to them at one point or the other. Please note that there is nothing wrong employing family and friends to business but if they are not skillful or qualified for the post you give them they can run your business down. In another vain, some businessmen employee their newly found “love” to sit at the helm of affair of their business. Emotion can never build business rather it’s an expressway to send your business to early grave.

Obahan and Son is a business center in Lagos, because of the good heart of Mrs Obahan, she sees her business center as haven of all unemployed graduates from his village and all family members who are who are looking for job. She bothers less if these graduates have appropriate skill for the business but she sees her Business Center as a compensation centers to family and friends. In less than 2 years the unskillful staff offer bad services to the customers and the customer went on their ways to better business centers. It was just like a dream for her, the incompetent staff got her out of business. Lesson: Don’t use emotion in recruiting your staff; it will always hunt back at you.

2. Doing business on competition: Many business men do beyond their capacity; they borrow and run a self inflicting race because they set out to compete with their “competitor” who is not at their level. The forget their strength; they take no cognizance of what makes them thick, their weakness, opportunities and their uniqueness. They forget every business has DNA, they run and run until they breakdown along the track. They go to bank to borrow money; they buy buildings, rent offices beyond their financial capacity just to be able to match up with the competitor. They forget that the assume competitor grow to that point, so they groan to meet up.
Hibiscus Fashion is a fashion designing outfit in city of Port Harcourt, this company is 1 year in business but they do everything to beat their major competitor (Glimmer) that has been in business for more than 10 years. Glimmer has 2 offices in Lagos and Abuja, they have turnovers in millions. Hibiscus Fashion went to the bank to borrow money to buy pool of cars, rented a big show room in the heart of town paying millions they do not have. They became so stressed that in 2 years they made little or no sales while they competitor was sliding in progress. Hibiscus Fashion was out of business and was chased out of their office. Lesson: Don’t compete with anyone in business, run your race as you do that you win more customers from your competitors.

3. No distinction between business and private purse: I have seen much business fail just because they do not have a clear distinction between business and the owners pulse. When business money is mix with private money, the future of the business is doomed. People tend to turn gross money from their business as harvest for their personal spending, this is dangerous! When the Self employed or CEO does not have salary structure but rather spend all the money in his business on himself and the family. The implication is that there is nothing left for the business and anytime the business needs cash flow to survive, the business is suffocated.
Mr Alabi is a spare part merchant who spends all the money he gets from his business. He spends the money arbitrarily as he makes the money. After paying his staff, the rest of ht e money is his to spend. One day the shop was getting empty and one of his staff brought it to his notice, he said “No problem, we would make more sales to buy” unfortunately he had a friend’s party that weekend, he spends all the money made that week. At the end of the day their business was closed down because they could not raise money to buy more goods to fill up the shop.
Lesson: When you make money in business pay yourself and other salary and save the remaining for a raining day for your organisation.

Join me in the next edition as I finish the remaining 2 pitfalls to watch out for in business.

4. Jack of all “work”

5. Doing businesses of the moment
(Pls note that you can change the topic to 3 pitfalls if you want me to do something fresh for next week edition but I can also finish this and send to you for next edition. It is because of space am considering and I don’t want to change my style of writing because of the everyday street stories I put in there. Thanks)

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