Common Mistakes Nigerian Small Business Owners Make (And How to Avoid Them)

Wed, 26 Jun 2024
Mistakes Nigerian Small Business Owners Make

The hustle is real indeed. As a small business owner in Nigeria, apart from the general issues that face small business owners, yours might have an extra layer on top because of certain conditions in Nigeria. Meanwhile, avoiding common mistakes made by Nigerian small business owners can make all the difference in the success of your business. In this article, we will discuss the most frequent mistakes faced by Nigerian small business owners and provide you with practical tips on how to avoid them.

 

3 Common Mistakes Nigerian Small Business Owners Make (And How to Avoid Them)

For the purpose of clarity, let’s classify these mistakes into three:

  1. Marketing and Sales Mistakes
  2. Operational Mistakes
  3. Financial Mistakes

 

1. Marketing and Sales Mistakes

This is one of the most common mistakes that can ruin a small business. Without sales, a business will run out and fold up. Here are common mistakes you could have made as a Nigerian small business owner in terms of marketing and sales:

 

  • Lack of a Proper Business Phone Number: The image you present when your customers call you is highly important. Most small businesses in Nigeria use their personal phone number as their business phone number. There is no way customers will pay you what you are worth if you do not project a professional image. Alternatively, some small businesses in Nigeria have a separate “business” phone number which is a sim card in another phone. There are a lot of problems with this. A sim card limits your business in so many ways.
  • Underestimating the Value of Customer Service: Providing poor customer service can damage your reputation and drive customers away. A study by Nnamdi Nwaogwugwu published on LinkedIn Pulse shows that 70% of Nigerian consumers are known to be brand loyal. However, bad experiences can quickly turn them against your business. Most small businesses in Nigeria have no tools in place to understand how to improve on their customer service. Some small businesses in Nigeria even ignore customer feedback and do the same things their customers complain about. Improving on customer service goes beyond having a customer service line.
  • Failing to Understand your Target Market: Without properly researching and understanding your ideal customer, you could be a victim of ineffective marketing campaigns and wasted resources. It would be difficult for you to understand the type of people buying your products or service, or what part of your product or service they demand ‌more of in comparison to the other ones.
  • Not Tracking or Analyzing your Sales Efforts: When you or any of your staff try to convert customers over calls, do you track how many customers actually made a purchase? or customers who still feel they need to be convinced more, those that don’t and why they didn’t make any purchase. As a small business owner in Nigeria, it is easy to overlook these things when you seem to be doing fine or having a trickle of sales every month. This is a common mistake and it hinders your business growth.
  • No Tools to Improve Sales Performance: Without important tools to gain insights on how to grow your small business in Nigeria, you are making a mistake by thinking that you will naturally understand your customers more as time goes on. Most small businesses in Nigeria do not know about important tools to sell more to their customers and grow their business easily. This also hinders them when it comes to coaching their sales team on how to convert customers easily.

 

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2. Operational Mistakes

You could be making operational mistakes that could be holding your business growth and expansion back. Here are a few of them:

  • Lack of Proper Delegation: As a small business owner in Nigeria, you could be operating your business with a small team and still manage them inefficiently. This means that your team members may not be meeting their KPIs or getting assigned tasks on time because you have decided to take all the burden on yourself. Trying to do everything yourself can lead to burnout and hinder your ability to focus on the growth of your business
  • Poor Technology: Simply having technology isn’t enough. While most small businesses in Nigeria do not adopt technology to enhance how their business operates, others adopt the wrong technology which wastes resources and hinders their progress.
  • Infrastructure Issues: Unreliable power supply, limited access to high-speed internet, and poor transportation systems can create a logistical nightmare for you as a small business owner in Nigeria
  • Poor Employee Management: Inconsistent or ineffective communication with your staff members could result in misunderstandings and reduced teamwork.

 

Related post: The Benefits of a Virtual Company Phone Number for Small Businesses and Startups

 

3. Financial Mistakes

You could be turning in great sales and still run your business at a loss. Here are some common financial mistakes you could be making as a Nigerian small business owner.

 

Using your Personal Bank Account for Business: 

Let’s say John, a Nigerian small business owner, starts a fashion design business with an initial capital of ₦2,000,000. He uses ₦1,000,000 to rent a shop, buy equipment, and purchase initial inventory. The business is growing, but John constantly withdraws money from the business account to cover personal expenses, such as:

 

  • ₦350,000 to pay his house rent
  • ₦200,000 to buy a new phone
  • ₦100,000 to fund his sibling’s education
  • ₦50,000 for feeding

 

Within a few months, John has withdrawn a total of ₦700,000 from the business account, leaving the business with only ₦300,000 in working capital. This reduces the business’s ability to restock inventory, pay his employees, or cover unexpected expenses.

A very common mistake small businesses in Nigeria make is digging into their capital. Without managing your business finances, it’s easy to lose track of your income and expenses. You might not know how much profit you’re actually making, and this limits your ability to make informed business decisions.

 

Tax Trouble: 

Imagine this: you’re running a thriving business, customers are happy, and the hustle feels real. But then, tax season rolls around, and your financial records are a jumbled mess. Tax season can be a nightmare without clear financial records. The Nigerian tax system can be complex, and inaccurate records can lead to huge fines or penalties.

 

Related post: 9 Signs Your Business Phone Needs an Upgrade

 

Avoiding Common Mistakes as a Nigerian Small Business Owner

Now that we’ve discussed the possible mistakes you could make as a small business owner in Nigeria, here are practical ways you can avoid them to take your business to the next level.

 

1. Avoiding Marketing and Sales Mistakes

Marketing and Sales are the pillars of any small business. Here are ways to avoid common mistakes in this area as a small business owner in Nigeria.

 

Upgrade your Business Phone Number: 

It’s time to project a professional image to your customers and make them pay you what you are worth. Using your personal phone number or a sim card for your business phone number is outdated and comes with so many disadvantages. For example, with a PressOne Business Phone number, you get a number that allows you to make and receive calls over the internet without a physical setup. It is a single number that can be used by all members of your team. You can easily transfer calls from one person or department to the other which means you will never miss a call from a customer or lose sales.

 

Infact, imagine that you are not in your place of business at the moment, and your “business phone number” which is a phone with a sim card, is with one of your sales staff. They need to transfer a call to you with a potential partner or investor, or a bigger customer. This means they will have to hang up with the person, and call you on your own personal phone number, which may be busy because you’re also using it for business or may not go through because of network issues. You could lose a huge sale, a potential partner of an investor. Never underestimate the power of a good business phone number. See more on how it works here

 

Track and Analyze your Sales Efforts: 

One of the best ways to track and analyze your sales efforts is by using call tracking and call analytics. To simplify it for you, call tracking is a method by which you can measure the success of your business calls. It makes you understand:

 

  • Who was the caller: Did they come across your number from an advertisement, your website, or another source?
  • What was the purpose of their call: Were they curious about your product, seeking assistance, or had an inquiry?
  • How did the call end: Did it result in a purchase, set up a meeting, or did the caller become uninterested and terminate the call?

 

Call tracking aims to assist your sales teams in effectively connecting with various customers throughout their entire journey as a customer.

On the other hand, Call analytics is the process of collecting and analyzing data about your business calls to understand the volume of sales calls you receive, the demographics of your callers, and how long they stay on the call. This will further help you when making marketing strategies and campaigns because you now know what your customers want more and how you can easily sell more to them.

How can you get these features? When you get a PressOne business phone number, these features automatically come with your number. So you see, you’re missing out a great deal on the power of a proper business phone number.

 

Use Call Recording to Improve Sales Performance:

A lot of small business owners in Nigeria make the mistake of underestimating the power of recording their sales calls either because they do not know what tool to use, how to use the tool, or why it is important.

Call recording is the process of capturing and storing phone conversations between your customers and your sales representatives. This allows you to listen to previous calls and review the sales interactions, how the customer responds, and how your sales team resolve customer complaints.

What do you do with this information? The effect of this is to understand how to improve the interaction between your sales team and your customers. You could also rework their current sales talking points if it’s not converting customers easily. With a PressOne business phone number, you automatically get this call recording feature.

 

Leverage Sales Integerations: 

There are so many tools available for you to gain valuable insights on how to sell more to your customers. For example, when you get a PressOne business number, there is an option to integrate your number with sales tools like Hubspot. Our other integrations to enjoy include Zendesk, Zoho, PipeDrive, Fresh Desk and more. There is so much you’re missing out on!

 

Related post: Top Tips for Registering a Company Phone Number in Nigeria

 

2. Avoiding Operational Mistakes

  • You can’t do it alone. Train and observe which of your team members show signs of dedication and delegate some management tasks to them.
  • Your business needs unlimited power supply and reliable internet connection to function. Invest in an inverter or solar panel to enable smooth running.
  • You need to communicate what the business requires to your staff in a civil and polite manner. To better manage staff relations, it is advisable you hire an HR Professional
  • Embrace Technology (the Right Way). Technology can be a game-changer, but don’t jump on every new fad. Research and choose tools that specifically address your business needs and challenges.
  • Always encourage your team to document their processes and their results.

 

3. Avoiding Financial Mistakes

  • Hire an accountant to track and manage your profits.
  • Also, the accounting team will help sort out your taxes early on to avoid tax issues
  • Avoid the temptation to mix personal and business finances. Open a dedicated business bank account and stick to it. This provides transparency and simplifies financial tracking and tax reporting.
  • While debt can be a useful tool, relying heavily on loans can be risky. Be mindful of your borrowing limits and prioritize building a healthy cash flow through sales and smart financial management before resorting to loans.
  • Develop a clear financial plan and budget that outlines your income, expenses, and financial goals. This roadmap helps you make informed financial decisions and track your progress.

 

Most small business owners in Nigeria do not know what mistakes they are making and how exactly they can sell more and grow their business. But now that you know, are you ready to take your business to the next level? Try PressOne today.

 

Related post: How to get a Company Phone Number, a step-by-step guide for an African Phone Number

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