2017 Top Startups Challenges Faced In Nigeria :
The common reason most tech startups in Nigeria are not yet successful is their approach to the problems they face. Most are responsive in taking actions and also defensive in getting things done or approaching customers. The best way to take the lead in such environment like Nigeria is to be proactive in actions and aggressive in getting things done. It’s a kind of CRM that many entrepreneurs in Nigeria don’t understand or put into practice. They focus more on the business model than how to execute or get that business model to work for them and thus, they find their company facing lots of challenges because of low cash flow and other variant things.
The problems could be solved if entrepreneurs can get the right people to work for them or if they can increase their knowledge on business principles and inspire their employees to give their best to meet the goal of the organization. Some of the major problems facing entrepreneur’s business in Nigeria are as follows;
POWER PROBLEM :
Inadequate of satisfactory power supply: Power supply is insufficient in Nigeria and it is expected to control electrical apparatuses and different machines required to improve generation of products and administrations. Lion’s share of occupations and organizations in Nigeria require satisfactory power supply to guarantee sought efficiency for instance Frozen sustenance organizations, pointing, Cyber bistro organizations (little scale organizations) just to say a couple, not to discuss substantial scale organizations that make utilization of overwhelming obligation machines to do producing exercises among others. In Nigeria, we encounter epileptic power supply and incessant power disappointments. We consequently don’t anticipate that organizations will flourish and grow in this sort of environment.
Rather than making beneficial utilization of the benefits picked up from business, we spend them a great deal more on making the business supportable immediately by concentrating on obtaining petroleum items to power machines and gadgets which in the long run expands the cost of creation. With time and weight, such organizations start to pack up or overlap up. Thinking once more into history, The movement of DUNLOP organization from Nigeria to Ghana is a regular case of the impact of force deficiencies and disappointments on organizations in Nigeria. It is however essential to take the matter of sufficient power supply genuine to energize business rise and extension.
GRANT FUNDING :
Funding is a big problem with startups in Nigeria as most startups don’t even have a well detailed business plan. They tend to think that bank is responsible for financing their business but “Wale Tinubu” in a Nigeria economic summit stated that “Any small business here must know that banks are not designed to fund startups. What is required is more private equity investors”. This is very true when it comes to funding startups. They should focus on raising money through the sales of equities that concentrating all their effort on Nigeria bank loans.
2017 Top Startups Challenges Faced In Nigeria :
ANGEL INVESTORS :
Financing is intense not withstanding when you have seed investor’s interest. Selecting the right investors and getting the right valuation are extra troubles for startups in Nigeria. Knowing how to negotiate with potential investors is a challenge in Nigeria startups as most foreign investors tends to lower the valuation and potentials of the Nigeria startup for their own gains.
Marketing strategy is likewise vital for any business. When you have an unmistakable thought regarding your objective business sector and your opposition, you can allot a financial plan for publicizing and advancing your business and choose which medium to promote through. You can likewise choose your item estimating through target market examination. This is where most Nigeria startups don’t get it. They don’t understand the objective and the target market of their marketing campaign and at most times, they over spend doing such.
Nigerian entrepreneurs are usually aligned to the work culture and they don’t conceive brand new ideas. Managers and employees avoid change and oppose whatever progressions that occur in the organization. The best thing to do is to be interested in advancement. At the point when bringing a change, guarantee that every one of your workers are readied for it. Talk about it with them in a meeting, let them know that it is so vital to be creative, make them see how helpful it will be as its a big challenge in Nigeria startups.
UNSTABLE BUSINESS MODEL :
Most startups in Nigeria lacks the will to make profit on their own as they rely on duplicating some western tech startups idea that have been valued for much money but makes little profit. Their ability to copy the copes of these western startups only ends in a clear phase that they could see as those companies will not expose the main secret of their success. So In Nigeria, the entrepreneurs building these businesses, tends to lack the strategies on how to make such business earn profits in this part of the world. The reason can be traced to lack of critical infrastructure that is not yet in place and others maybe lack of customers’ preferences as the European approach to buying goods and services is different from an African view considering the low purchasing power and starvation of credible information in Africa.
POOR INVENTORY SYSTEM :
Credible accounting is a serious problem among startups in Nigeria because of the lack of accounting knowledge from most entrepreneurs. They lack skills in accounting and fail to keep up with numbers in their early stage of business and it affects their business. In business, numbers is very important from the very moment you start your business. Ability to keep up with numbers and understand how these numbers work will shape the way you manage your money. I have talked to many entrepreneurs in Nigeria who are yet to understand what is asset, liability etc. And this is a challenge to some of them because when you have no knowledge about such, you may not even know if the person you hired is doing the right thing.
Shipping is still a huge challenge among startups as there is little credible logistics companies which can deliver goods to customers timely. Most customers of e-commerce startups end up receiving their goods in 6 days or more for their order. And some of the goods maybe faulty at arrival due to the way it was carried along by the logistics company. This challenge is costing many startup businesses a huge amount of money yearly. It’s is unlike western countries where there is a functional postal service and private companies that deliver goods within hours to their destinations. Nigeria entrepreneurs are expected to find a new strategy on how customers can get their goods timely and securely.
E PAYMENT SYSTEM :
There is still a big fear among middle class earners in Nigeria over the idea of exposing their bank details or debit card information to these startups in Nigeria. Because of a potential hack or unauthorized withdrawal of their money, many Nigerians like to play it safe or even safer. This is one of the major challenges facing the e-commerce startups in Nigeria as Konga and Jumia has adopted cash on delivery system but even at that, it affects their profit range. While some targeted e-commerce website like Supermartng, Gloo and Printivo are trying to make people to trust their brand by only allowing payment online. Konga has also adopted a strategy by launching of Kongapay, an online payment system that the consumer can trust and will hold the costumers fund till goods are delivered by the merchants at customers’ satisfaction. Regardless of that, online payment solutions are still a challenge facing most startups in Nigeria.
As a Nigerian entrepreneur entering into any business, it is essential that you educate yourself about the business, do a lot of market research and evaluate the industry as you may lose a lot of money if you fail to do the right things. It is also important that you have ample knowledge about your competitors, your target market, current trends, advertising and marketing techniques as well as financial know-how.