It is a painful thing to see a shop that was once bubbling with life suddenly go empty and lock its doors. In our country, many people start businesses with great passion, but within two years, the money vanishes. While people often blame “bad luck” or “village people,” the reality is often found in the way the money was handled. Solving financial failure in Nigerian businesses requires us to look at our habits and change the way we treat our “working capital.”
The “Owanbe” and Family Trap
In Nigeria, there is a lot of pressure to look successful. An owner might take money from the business to buy expensive “Aso-Ebi” for a wedding or to pay the hospital bill of a distant relative. While being generous is good, taking that money directly from the business cash drawer is dangerous. When you do this, you are “eating your seed.” You won’t have enough money to buy new goods to sell tomorrow. Solving financial failure in Nigerian businesses means you must pay yourself a fixed salary and treat the rest of the business money as “sacred.”
Chasing Growth Too Fast
Many people think that having three branches is better than having one. They quickly take high-interest loans to open new locations before the first one is even stable. In the Nigerian economy, interest rates can be very high, and if sales slow down for even one month, the debt can swallow the whole business. It is better to have one small, profitable shop that you own 100% than to have five big shops that belong to the bank. Patience is a key part of financial survival in our market.
Not Knowing the “Numbers”
You cannot manage what you do not measure. Many owners don’t know exactly how much they spend on fuel, or they forget to include the cost of their own time when pricing their goods. If you sell a product for 5,000 Naira but it cost you 4,800 Naira to get it to the customer, you are barely making anything after you pay for your own lunch.
To avoid failing, you must sit down every week and look at your books. Understand where every Naira is going. If you catch the problems early, you can fix them before they grow into a disaster that closes your shop.
