A startup is any business venture that has the potential of high growth rate and as well as durability. This startup can be owned by either an individual or a group of people.
Successful startups have been seen to be ones that meet the needs of people, so there is a readily available market for such startups.
Startups in the beginning usually have only ideas, how to make it work and yield profits while meeting the market need but most times no assured source of capital. Therefore the need for investors arises for these intending startup founders.
For startups in Nigeria, unless one turns to family or friends for funding. The funds for the startups are most likely to come from either angel investors, venture capitals or the traditional way of getting loans from banks and the latter takes one through a tiresome process and at the end of the day might not release the fund.
Crowdfunding is a good way for outsourcing funds for startups. However, in Nigeria crowdfunding works best for societal projects.
Outsourcing funds from family and friends unless an understanding is reached between both parties could be dangerous.
Also read, Penetration of Tech Startups in Africa
If the startup fails, family members might take it out on you, and unlike other investors putting in more money when no profit is yet realized would be difficult for them.
Some startups in Nigeria have failed due to this reason, once the initial money elapsed in the process of setting up the startup, they go back to ask for more and when refused unless there’s an alternative capital plan. The startup dies a natural death.
There are other reasons why startups in Nigeria fail, lack of sustainability plans. The startup founder just wants to get into the market without a detailed plan on how to remain in the market.
Others don’t check out the feasibility of the products or service they offer meeting the customers’ needs and the competition.
So if the competition meets the same needs your startup is intending to meet and at a cheaper rate than you are intending to do it for. That’s a red flag one should hearken to.
Another reason startups in Nigeria fail is a poor marketing strategy. The startup and its product could be top-notch but if people don’t know about the product how will they patronize the market.
Poor managerial skills, poor leadership skills and poor entrepreneurial skills are also reasons why startups fail, especially young startup owners who want to start making money as soon as possible.
In as much as being a startup founder sounds lucrative, there’s a lot of work put into making a startup work. Joining an incubation centre is a good start, as these centres exist to help startups.
Managerial, entrepreneurial and leadership skills are taught in these centres.
Access to funding is higher, mentorship and networks are added benefits. There is also the possibility of getting partners.
There are post-incubation stages where even while in the market these incubation centres follow up and provide the necessary support.
About the author
Chibuzor Elizabeth Chijioke a graduate of Abia State University is a Nigerian based entrepreneur and content writer. She trained as a digital marketer at Innovation Growth Hub. She is committed to teaching people how to apply technology to better their lives and businesses. She spends her leisure reading sci-fi and fantasy novels.
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