A lot of businesses are coming up every day in Nigeria and only 10 in 100 succeed. Most of the businesses that fail in Nigeria must have followed the right channel, but they still couldn’t succeed. 

The question now is why do they actually fail?

This post will highlight key reasons why businesses are failing in the country. Some people will actually blame it on the economic situation or the government. No, that is not our focus today. In some cases, a failing business is a result of negligence from the founder or CEO due to a lack of proper information at their disposal. Before they might realize that, it is already late.

Without any doubt, most business professionals know that lack of proper management is one of the root causes of a failing business. A poor management system in a firm structure can actually affect a business.

Without wasting much time, let discuss 4 reasons Why Businesses Fails In Nigeria.

4 Reasons why Nigeria Businesses Fail

Wrong Business Location

The location of your business is one of the most important factors that can determine the success and failure of your business.

Having or making poor visibility study of a location will drastically affect your business. That is why it is always advisable to always conduct demographic research and the religious and cultural beliefs of the people leaving in that location.

For example, in places like Kano and Sokoto where religious activities are taken seriously, you are not allowed to do some certain kind of business.  They take religious beliefs very serious because they want to ensure that the people follow the teachings of the koran. It is well known that the Muslims take drinking or alcohol as a serious offence because it goes against the teaching of the koran.

As a business owner, you need to understand that if you’re into the sales of alcohol, then your business will not succeed in that location. that is why it is always advisable to ensure that your business location is one of the first things you need to take very seriously if you really want to succeed.

Having Wrong Business Partners

A partnership business has proven to be better than a sole proprietorship. But in the case of Nigeria, people prefer to work alone.

Most people in Nigeria are going into partnership because of the financial commitment from their partners and oftentimes they end up teaming up with the wrong people.

It is always advisable to get the service of an attorney to handle any legal documents for both parties just in case if any of the partners are trying to dissolve the partnership.

We have seen cases where two friends who start a business and they got a misunderstanding, due to the bad grudges between them, they end up destroying years of hard work and also the source of livelihood of their employees which might lead to the shutting down of the company.

To avoid such kinds of issues, try as much as possible to solve problems before they escalate into something that can not be handled.

Poor Cash Flow

 As a business owner, you need to understand the differences between cash flow and earnings. You need to understand your profit and loss.

Most businesses that fail in Nigeria are always found guilty of this as a result of their poor accountability in terms of inflow and outflow of revenue.

Some CEO of businesses are having big dreams that overshadow their reality, you will see them thinking of upgrading their equipment, cars or renovating their business which in the end they might spend more than they are actually earning. 

When this happens, they will start retrenching staffs and this will start affecting them negatively which will eventually lead to the failure of the business.

Changing Services Without Involving Customers

most businesses fail to involve their customers when they are creating a new product or service during the development stage.
For example, creating a sudden price hike of your product or services without notifying your customer will lead to a sudden loss of existing customers which will eventually make them start patronizing a competing product.
conducting a survey to know how people feel towards your business is very important. This will help you understand which area is failing or doing okay. with a proper channel of communication, you can get to improve your business through customer feedbacks


If you have any questions, drop them in the comment section. We’ll reply to them as soon as we can. Thank you for reading and don’t forget to share.

By naija

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