Our focus will be in Kigali Rwanda.

So many businesses I personally know of here in Kigali has closed shop. Not only Nigerian owned, Rwandan owned but also non African ones.
It appears these businesses commit same mistake! As a strict business man, I squarely blame the business owners!

Keep your eyes on this thread. We shall be updating common reasons why these Businesses fail in Kigali Rwanda.... while we're still standing.

You can learn a lot from here before coming because we're right here in the city of a thousand hills. We have conducted extensive street based research, so we spoke with those in the field. We say it as it is, while looking at it from different angles!

Businesses fail for a coterie of reasons, and it's not restricted to Rwanda, Nigeria or elsewhere in Africa. It's a fact the world over.
Businesses fail in Canada, USA, China, Japan, Europe and other developed countries. According to research, the reason (s) for failure are similar....
Infact, 70% of new startups are likely to go out of business before the first 24 months of commencing operations.
Can this trend be halted?
Yes.
Follow up on this thread to learn more!

To safeguard a new or established business, it is necessary to understand what can lead to business failure and how each obstacle can be managed or avoided altogether. The most common reasons small businesses fail include a lack of capital or funding, retaining an inadequate management team, a faulty infrastructure or business model, and unsuccessful marketing initiatives.

KEY TAKEAWAYS
Running out of money is a small business’s biggest risk. Owners often know what funds are needed day to day but are unclear as to how much revenue is being generated, and the disconnect can be disastrous.
Inexperience managing a business—or an unwillingness to delegate—can negatively impact small businesses, as can a poorly visualized business plan, which can lead to ongoing problems once the firm is operational.
Poorly planned or executed marketing campaigns, or a lack of adequate marketing and publicity, are among the other issues that drag down small businesses.

1. Financing Hurdles
A primary reason why small businesses fail is a lack of funding or working capital. In most instances a business owner is intimately aware of how much money is needed to keep operations running on a day-to-day basis, including funding payroll; paying fixed and varied overhead expenses, such as rent and utilities; and ensuring that outside vendors are paid on time; however, owners of failing companies are less in tune with how much revenue is generated by sales of products or services. This disconnect leads to funding shortfalls that can quickly put a small business out of operation.


A second reason is business owners who miss the mark on pricing products and services. To beat out the competition in highly saturated industries, companies may price a product or service far lower than similar offerings, with the intent to entice new customers.


While the strategy is successful in some cases, businesses that end up closing their doors are those that keep the price of a product or service too low for too long. When the costs of production, marketing, and delivery outweigh the revenue generated from new sales, small businesses have little choice but to close down.

Small companies in the startup phase can face challenges in terms of obtaining financing in order to bring a new product to market, fund an expansion, or pay for ongoing marketing costs. While angel investors, venture capitalists, and conventional bank loans are among the funding sources available to small businesses, not every company has the revenue stream or growth trajectory needed to secure major financing from them. Without an influx of funding for large projects or ongoing working capital needs, small businesses are forced to close their doors.

To help a small business manage common financing hurdles, business owners should first establish a realistic budget for company operations and be willing to provide some capital from their own coffers during the startup or expansion phase.

It is imperative to research and secure financing options from multiple outlets before the funding is actually necessary. When the time comes to obtain funding, business owners should already have a variety of sources they can tap for capital.

2. Inadequate Management
Another common reason small businesses fail is a lack of business acumen on the part of the management team or business owner. In some instances, a business owner is the only senior-level person within a company, especially when a business is in its first year or two of operation.

While the owner may have the skills necessary to create and sell a viable product or service, they often lack the attributes of a strong manager and don't have the time to successfully oversee other employees. Without a dedicated management team, a business owner has greater potential to mismanage certain aspects of the business, whether it be finances, hiring, or marketing.

Most small businesses start out with the entrepreneur's savings or money from friends and family and then look for outside financing to grow.
Smart business owners outsource the activities they do not perform well or have little time to successfully carry through. A strong management team is one of the first additions a small business needs to continue operations well into the future. It is important for business owners to feel comfortable with the level of understanding each manager has regarding the business’ operations, current and future employees, and products or services.

3. Ineffective Business Planning
Small businesses often overlook the importance of effective business planning prior to opening their doors. A sound business plan should include, at a minimum:

A clear description of the business
Current and future employee and management needs, Opportunities and threats within the broader market, Capital needs, including projected cash flow and various budgets, Marketing initiatives, Competitor analysis.

Business owners who fail to address the needs of the business through a well-laid-out plan before operations begin are setting up their companies for serious challenges. Similarly, a business that does not regularly review an initial business plan—or one that is not prepared to adapt to changes in the market or industry—meets potentially insurmountable obstacles throughout the course of its lifetime.

To avoid pitfalls associated with business plans, entrepreneurs should have a solid understanding of their industry and competition before starting a company. A company’s specific business model and infrastructure should be established long before products or services are offered to customers, and potential revenue streams should be realistically projected well in advance. Creating and maintaining a business plan is key to running a successful company for the long term.

4. Marketing Mishaps
Business owners often fail to prepare for the marketing needs of a company in terms of capital required, prospect reach, and accurate conversion-ratio projections. When companies underestimate the total cost of early marketing campaigns, it can be difficult to secure financing or redirect capital from other business departments to make up for the shortfall.

Because marketing is a crucial aspect of any early-stage business, it is necessary for companies to ensure that they have established realistic budgets for current and future marketing needs.

Similarly, having realistic projections in terms of target audience reach and sales conversion ratios is critical to marketing campaign success. Businesses that do not understand these aspects of sound marketing strategies are more likely to fail than companies that take the time to create and implement cost-effective, successful campaigns.

What Is the Small Business Failure Rate?
Approximately 40% of small businesses fail in their first year, 60% fail within five years, and 11% make it to 10 years and further.

What Are Some Signs That Your Business Is Failing?
Signs that a business is failing include small levels or lack of cash, heavy operating expenses, inability to pay back loans on time, inability to pay suppliers on time, customers that pay late, loss of clientele, and an unclear business strategy.


Put Your Money to Work.
Managing your money effectively starts with careful planning. With Bigkoko Business Support you can learn from advisor who helped designed Bigkoko as it is, and get empowered so you can make smart financial decisions. Bigkoko Business Support also helps take the mystery out of Starting small and growing big by answering some of the most commonly asked questions in a simple, personalized way.

What You Should Know About Entrepreneurs
Entrepreneurs and entrepreneurship have key effects on the economy. Learn how to become one and the questions you should ask before starting your entrepreneurial journey.

Venture Capitalist (VC)
A venture capitalist (VC) is an investor who provides capital to firms with high growth potential in exchange for an equity stake.

What Is Capital?
Capital is a financial asset that usually comes with a cost. There are four main types of capital: debt, equity, working, and trading.

Business Plans:
A business plan is a written document that describes in detail how a new business is going to achieve its goals.

What Is a Business?
A business is an individual or group engaged in financial transactions. Read about types of businesses, how to start a business, and how to get a business loan. more

What Is a Startup?
A startup is a company in the first stage of its operations, often being financed by its entrepreneurial founders during the initial starting period.

Business most times fail when operating expenses is more than Revenue. This is usually compounded when you took a loan to Startup!
Yours truly; Bigkoko African Integrated Services Ltd resisted this temptation to take a loan from the bank to scale up....

Our Account officer was like, let's give you $5,000 to scale up, bring in technologies, and all that..... I laughed. $5000 at what costs? My peace? Monthly deductions? I told her thanks. No, thanks!
But I know many inexperienced entrepreneurs would rush on it and start hoping for miracles!

As a Business Development Expert, I already know our operating expenses differentials is almost 80% what we end as revenue in a month, so it will be sucidal if I stupidly take that easy loan.....

Note.
Once operating expenses mark up is exceeded by 300% differentials...., Your business is in emergency unit and pooped up on steroids! It's a matter of time before you go out of business!

There are four factors that determine your success in life, business or and pleasurable or non pleasurable endeavors.

1. Intelligence/Smartness.
2. Strength/Brute Force.
3. Capital/Financial means.
4. Divine Mercy/Luck/Grace/God factor...if you believe in that sort of thing. Yes, I Mr Koko himself believe in God (specifically, the Bible God!)

At any point in time, you must have at least two of the above factors counting in your favor. At least Two. With that, you will be at average.... This is the minimum!

At three of these factors counting on your favor, you're on your way to becoming a millionaire.

Four of the above, congratulations man! You're on your way to becoming a billionaire!

Any adjustments at any point in time, will definitely affect your riches!

I will explain each of them and give examples.

Let's talk about Intelligence & Smartness...
These are honest opinion gathered while researching the East Africa market & it's supposed skilled workers, & my years in Nigeria!

Give an East Africa a smart phone i.e iPhones, Android etc. You get your self a photographer..or a social media chatter....lol. They seem not to understand the opportunities offered by Google play store or Apple store in terms of free software for self Development that eventually lead to Product/ Services Design and Customization!

Give a Nigerian an Android phone, two weeks later he has developed a service or product he's selling. Though, some unscrupulous Nigerians stupidly wants to destroy this great trait endow on them by their Creator by including scams. Other Africans are particularly intrigued by how them run this sort of things. Well it takes a great deal of Ingenuity to beat the system! I tell you my friend! This by no means endorses such ills.

If you are smart, or intelligent, you are already at an advantage. You need just one of the other three factors to be able to put food on the table for you or for the family!

So let's say;
Smartness+Divine favor = Average!
Smartness+Divine favor+Capital = Millionaire!
Smartness+Divine favor+Capital+Strength = Billionaire!

To remain a billionaire, all four factors must always be at your favor!

WHY BUSINESS FAIL?
Businesses fail everywhere. Its not peculiar to you or your country, but lets take the Rwandan situation.

Mr Smith is an Entreprenuer seeking to try other markets within the Continent he lives.
He zeroes in on Rwandan-EAC regional market as a sure bet for better opportunities.
However, Mr Smith bussiness could not live beyond 90 days as a running business outfit. So what went wrong? Lets x ray.

1. Mr Smith did not conduct a Feasibility study to ascertain if the ideas playing on his head conforms to current realities. The market dictates what to buy, not your passion.
2. Mr Smith did not do Due Dilligience before committing his investment capital to the business venture.
3. Mr Smith has two strong competition: The locals & The Big Players.
4. Mr Smith has huge operating expenses.
5. Mr Smith do not have a niche product/services.

Look my friend if you are coming here to open a barbering salon, owning a bike, a normal restaurants those things you d likely see in every hook & crony etc i will honestly tell you not to make the move. We have lots of them littered here and closing up. Anyone who tells you otherwise is a wicked person. Trust me you would waste your money, and worse get stranded.

For you to scale the first 90 days running your business, make sure

1. You keep funds for your living expenses separate from your business expenses. These motherfuckers here (no offense please) have designed their city & economy to look much like the European ones. I usually call Kigali, Musanze, Gisenyi, QUOTE, "EUROPEAN CITIES WITHOUT WINTER".

2. Make sure, i repeat, make sure you have the right staff. These guys here are laid back. They dont like stress. They are not as flexible as say, the Chinese, Indian, or Nigerians. They all love simple stuffs like the way old people like sun lights. They usually look forward to those good times in a bar. They love booze.

3. Dont employ a staff who do not commit, in writing, to 50% of his salary to be based on KPI or commission. The worker is not serious. So tell me, if the business dont get income, where will i get money to pay them? I have a principle of, QUOTE, 'You dont work, You dont eat. And if you work, make sure it bring results, i believe in results, not efforts" Anyone can make an effort, but not everybody can bring results.

4. Make sure a third party, differently from you, advised you appropriately by doing a Feasibility for you, designing a product/services for you which you might modify to suit your initiative.

If you take these four advise seriously, i m certain your business must cross the first six months. And possibly sustain itself because during those build up time, you will important lessons which Harvard or Princeton wont teach you.

Innovate or go into extinction. Conform to what the market needs or go into paralysis. The business world have no pity on businesses that refuse to innovate or conform. Ask Nokia.

I do rather you be like Dr Chukwuma Innocent of Innoson Brand, than you take after Mr Aliko Dangote of Dangote Brand. Both are miles apart in terms of Creativity, Innovation & flexibility even though both Brands are led by billionaires.
While Dr Chukwuma exhumes the aura of a home grown tactician, who conform to tenets of True Capitalism & Free Market Economy, the same can not be said of Mr Aliko who rides on pure govt goodwill & patronage. The very opposite of a Capitalist Free Market economy which the largest Economy in Africa purportedly claim to practice.

Big girl Rihanna has launched Beauty Products. She has refused to depend on only songs or endorsements. See? Innovate or die. Visits/prayers to Rome/Mecca/Jerusalem will not help you.