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Why do Small Businesses Fail and How to Avoid it?

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Small business owners

By Catherine Smith

A small business, and especially a start-up is a bud of a beautiful flower into which it may turn over time. This is possible if you don’t commit any of the typical but fatal mistakes that kill a business. Here we describe some of these mistakes.

  1. Poor planning

You have a great business idea and are already looking forward to seeing an amount with many zeros in your bank account. But an idea is not a business yet. A fatal mistake of many start-up entrepreneurs is that they do not plan their future actions accurately. This is partly because they cannot predict many hindrances they will face and partly because they have little business experience and are thus too impatient.

What to do?

Appropriate planning provides the lion’s share of success. You cannot foresee all details, but you have to plan how your entity will be working before you launch it. Everyone knows the examples when the idea was so brilliant that it ensured the market’s hype while proper planning was done afterwards. But in all other cases, comprehensive planning, which indicates how your business will function, is crucial.

  1. Running out of money

One of the aspects of inappropriate planning is the deficit of funding a business may face. Unexperienced entrepreneurs want to start making millions as soon as possible. They may see the perspectives unobjectively and much brighter than they are. They may take loans without planning how they would be paid back. They may spend the available capital on unnecessary and secondary things instead of paying for the needs of primary importance. And, of course, this is much more likely to happen if appropriate planning is not done.

What to do?

At the first steps of your business, no single cent should be spent without the significant need. This is especially true until the moment when your business starts generating stable cash flow. Even the first trickle of revenue is not a guarantee that it will turn into a strong stream of income. Even if a business lives for some time, do not hurry to take quick actions trying to grow it fast. If you attract external capital, plan the ways and terms of paying it back. When you think of buying expensive equipment, think a thousand times about whether it is feasible.

  1. Poor management

Management of a small business is mostly about mindset and attitude. It is often not strong enough to hire all the necessary professionals, so an entrepreneur is forced to combine several functions. This is fraught with different consequences, from lack of time because of inappropriate time management to bad decisions made because of the lack of expertise and unobjective vision. Moreover, while medium and large business is based on managerial technologies so that it depends little on a single person, in the case of small business, this dependence may be absolute. As one person bears several responsibilities at a time, their physical tonus and mood play a vital role.

What to do?

Dysfunctional management in a small business might harm and nullify every aspect of your business, from managing finance to employees’ attitudes toward work. And if productivity is constrained, it won’t be long until failure comes.

Self-educate, go to training, find a mentor – in other words, do everything possible to improve your managerial and leadership skills and expertise in the industry. Study other domains and find best practices to check whether they can be applied in your own business.

  1. Inappropriate business model

Once again, an idea and a business that is based on it and brings solid revenue streams are two different things. The main question when designing a business model is how the revenue streams will be organised. How will you monetise your idea? Once an inappropriate model is chosen, your idea will underperform and will not completely realise its money-making potential.

What to do?

This is where a business plan would be useful. Imagine that you are a customer who might buy your product or service. Will you prefer it to competing products? Do you think the price is right? How will you pay for the product? How will you know about it? Answering these questions will allow you better to understand your customer and their thoughts about your product. Try to examine other potential mechanisms of sales, such as collaboration and partnership or sales for other audiences. Launch the project only if you are sure that it will be appreciated by the market.

  1. Lack of value and originality

You may have planned and launched the business, but the sales are still low. Your product is good, but customers do not hurry to line up for it. The problem may be that dozens of similar products are already in the market. Customers already use them and know what to expect from them. So, why would customers switch to yours if it does not bring them higher value?

What to do?

Ask yourself how your product differs from those of competitors. Is it better than those? What specific traits does it have? What do competitors do in other ways? The set of particular characteristics of your product and everything which is around it form the brand.  A brand is the customer perception of your firm and your product that sits in their heads. Every detail is important.

You should be different. Make all the traits of your product unique so that each of them tightly associates with your product in the customer’s mind. Tell them why your product is different and why it will bring them more value. Explain how this value can be obtained. Communicate with the client and present them with your ideas about the product. Tell them about all updates, new versions, new tastes and forms so that a client can choose the most appropriate ones. Follow the marketing plan rather than hope for the success of accidental activities. Relevance and consistency are the two key principles of success for a small business.

Catherine Smith is an Online Marketing Manager at PhD Centre, specialising in PhD thesis writing. She is passionate about researching and writing on various topics, including Education, Marketing, and Technology.

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Championing Ethical Sourcing Within Dairy Communities

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Arla Nigeria

Human Rights Day often centres on themes of dignity, equity, and freedom. Yet for many Nigerians, these rights are not debated in courtrooms they are expressed in the ability to access nutritious food, build meaningful livelihoods, and secure a healthy future for their families. Nutrition, in this sense, becomes a fundamental human right.

Despite a growing population and rising nutrition needs, Nigeria faces a pressing dairy reality. The country remains heavily dependent on dairy imports, leaving nutritional access vulnerable and local capacity underdeveloped. This is not just an economic concern; it is a human one. When families cannot easily access affordable, high-quality dairy, the foundations of health and development are weakened.

It is within this context that Arla Nigeria operates not merely as a dairy company, but as a nutrition powerhouse committed to nourishing a nation. Our ambition extends beyond selling products. We are working to build the foundations of a stronger, more resilient local dairy sector that supports food security, economic participation, and national progress.

At the heart of our efforts is the Damau Integrated Dairy Farm in Kaduna Statea fully operational modern farm designed to demonstrate what responsible, efficient, and scalable dairy production can look like in Nigeria. Arla Nigeria produces its own milk on-site, ensuring quality, safety, and consistency as we continue building the systems required for a sustainable local value chain. In fact, until our yoghurt factory launches, the reverse is true: some stakeholders purchase milk from us.

But infrastructure alone is not the story. What truly matters is the human impact surrounding the farm.

Arla Nigeria has been intentional about engaging and empowering the communities around Damau. By creating employment opportunities for local residents, providing skills development, and contributing to community growth, we are ensuring that the benefits of dairy development extend beyond production lines. This is development rooted in people where progress is measured in livelihoods improved and opportunities created.

As Arla Nigeria continues to expand operations, our long-term commitment remains clear: to contribute meaningfully to local milk sourcing and value chain development, strengthening Nigeria’s capacity to feed itself. Backward integration is not a slogan for Arla Foods; it is a structured pathway with building responsibly and sustainably. From farm systems to future household milk initiatives, the goal is to create a model that supports farmers, enhances productivity, and drives economic inclusion in the years ahead.

On Human Rights Day, the conversation often revolves around preventing harm avoiding exploitation, ensuring fair labour, and upholding ethical standards. These are essential, but they are only the beginning. True respect for human rights means creating enabling systems that allow people to thrive.

With Arla Foods, that begins with nutrition. Milk is a super food, rich in essential nutrients that support growth and development. Ensuring access to such nutrition contributes directly to national well-being and productivity. When we help secure a healthier population, we strengthen the foundation for education, economic participation, and long-term prosperity.

This is why Arla believes that dairy is not just food it is nutrition, livelihood, and progress. By investing in sustainable production, community development, and future local sourcing capabilities, Arla Nigeria is contributing to food security and economic growth in a tangible, measurable way.

Ultimately, ethical business is not defined by corporate language or labels. It is defined by the stability, nourishment, and dignity it brings to people’s lives. As Nigeria celebrates Human Rights Day, let us recognise that the right to nutrition and the opportunity to build a better future are among the most powerful rights we can help protect.

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In Praise of Nigeria’s Elite Memory Loss Clinic

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memory loss clinic Busayo Cole

By Busayo Cole

There’s an unacknowledged marvel in Nigeria, a national institution so revered and influential that its very mention invokes awe; and not a small dose of amnesia. I’m speaking, of course, about the glorious Memory Loss Clinic for the Elite, a facility where unsolved corruption cases go to receive a lifetime membership in our collective oblivion.

Take a walk down the memory lane of scandals past, and you’ll encounter a magical fog. Who remembers the details of the N2.5 billion pension fund scam? Anyone? No? Good. That’s exactly how the clinic works. Through a combination of political gymnastics, endless court adjournments, and public desensitisation, these cases are carefully wrapped in a blanket of vagueness. Brilliant, isn’t it?

The beauty of this clinic lies in its inclusivity. From the infamous Dasukigate, which popularised the phrase “arms deal” in Nigeria without actually arming anything, to the less publicised but equally mystifying NDDC palliative fund saga, the clinic accepts all cases with the same efficiency. Once enrolled, each scandal receives a standard treatment: strategic denial, temporary outrage, and finally, oblivion.

Not to be overlooked are the esteemed practitioners at this clinic: our very own politicians and public officials. Their commitment to forgetting is nothing short of Nobel-worthy. Have you noticed how effortlessly some officials transition from answering allegations one week to delivering keynote speeches on accountability the next? It’s an art form.

Then there’s the media, always ready to lend a hand. Investigative journalists dig up cases, splash them across headlines for a week or two, and then move on to the next crisis, leaving the current scandal to the skilled hands of the clinic’s erasure team. No one does closure better than us. Or rather, the lack thereof.

And let’s not forget the loyal citizens, the true heroes of this operation. We rant on social media, organise a protest or two, and then poof! Our collective short attention span is the lifeblood of the Memory Loss Clinic. Why insist on justice when you can unlook?

Take, for example, the Halliburton Scandal. In 2009, a Board of Inquiry was established under the leadership of Inspector-General of Police, Mike Okiro, to investigate allegations of a $182 million bribery scheme involving the American company Halliburton and some former Nigerian Heads of State. Despite Halliburton admitting to paying the bribes to secure a $6 billion contract for a natural gas plant, the case remains unresolved. The United States fined the companies involved, but in Nigeria, the victims of the corruption: ordinary citizens, received no compensation, and no one was brought to justice. The investigation, it seems, was yet another patient admitted to the clinic.

Or consider the Petroleum Trust Fund Probe, which unraveled in the late 1990s. Established during General Sani Abacha’s regime and managed by Major-General Muhammadu Buhari, the PTF’s operations were scrutinised when Chief Olusegun Obasanjo assumed office in 1999. The winding-down process uncovered allegations of mismanagement, dubious dealings, and a sudden, dramatic death of a key figure, Salihijo Ahmad, the head of the PTF’s sole management consultant. Despite the drama and the revelations, the case quietly faded into obscurity, leaving Nigerians with more questions than answers.

Then there is the colossal case of under-remittance of oil and gas royalties and taxes. The Federal Government, through the Special Presidential Investigatory Panel (SPIP), accused oil giants like Shell, Agip, and the NNPC of diverting billions of dollars meant for public coffers. Allegations ranged from falsified production figures to outright embezzlement. Despite detailed accusations and court proceedings, the cases were abandoned after the SPIP’s disbandment in 2019. As usual, the trail of accountability disappeared into thin air, leaving the funds unaccounted for and the public betrayed yet again.

Of course, this institution isn’t without its critics. Some stubborn Nigerians still insist on remembering. Creating spreadsheets, tracking cases, and daring to demand accountability. To these radicals, I say: why fight the tide? Embrace the convenience of selective amnesia. Life is easier when you don’t worry about where billions disappeared to or why someone’s cousin’s uncle’s housemaid’s driver has an oil block.

As World Anti-Corruption Day comes and goes, let us celebrate the true innovation of our time. While other nations are busy prosecuting offenders and recovering stolen funds, we have mastered the fine art of forgetting. Who needs convictions when you have a clinic this efficient? Oh, I almost forgot the anti-corruption day as I sent my draft to a correspondent very late. Don’t blame me, I am just a regular at the clinic.

So, here’s to Nigeria’s Memory Loss Clinic, a shining beacon of how to “move on” without actually moving forward. May it continue to thrive, because let’s face it: without it, what would we do with all these unsolved corruption cases? Demand justice? That’s asking a lot. Better to forget and focus on the next election season. Who knows? We might even re-elect a client of the clinic. Wouldn’t that be poetic?

Now, if you’ll excuse me, I have a new scandal to ignore.

Busayo Cole is a Branding and Communications Manager who transforms abstract corporate goals into actionable, sparkling messaging. It’s rumored that 90% of his strategic clarity is powered by triple-shot espresso, and the remaining 10% is sheer panic. He can be reached via busayo@busayocole.com. 

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How Nigerian Companies are Leading More Responsible Digital Transformation

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Kehinde Ogundare 2025

By Kehinde Ogundare

Artificial intelligence is everywhere–in polished social media posts, in the recommendations that guide our viewing habits, and in the bots that handle customer queries before a human agent steps in. On LinkedIn, AI-assisted writing has become standard practice.

A year ago, more than half of English long-form posts that went viral were estimated to have been written by or assisted by AI. If that’s the norm on the world’s biggest business network, it’s no surprise that AI is driving conversations in Nigerian boardrooms as companies move from experimentation to embedding AI into their daily operations.

Part of the package

The Nigeria Data Protection Act (NDPA), modelled on the European Union’s General Data Protection Regulation, together with the Nigeria Data Protection Commission, requires companies to build privacy into their systems from the outset rather than adding it later. This clear regulatory framework has evolved alongside a rapid rise in AI adoption.

New research from Zoho on responsible AI adoption highlights the impact of the regulations. As per the report, 93% of Nigerian companies have already started using AI in their daily operations; 84% have tightened their privacy controls after adoption, and 94% now have a dedicated privacy officer or team, which is well above global averages.

The survey, conducted by Arion Research LLC among 386 senior executives, shows just how deeply embedded AI has become in Nigeria. One in four companies already uses it across several departments, and nearly a third report advanced integration. Financial services firms are pioneers in this sector, using AI to automate client interactions, streamline operations and sharpen their marketing, while staying compliant with data protection rules.

The NDPA has helped make privacy part of business planning. Four in ten companies now spend more than 30% of their IT budgets on privacy. Regular audits, privacy impact assessments and explainability checks are becoming standard practice.

Skills, compliance and capacity

Rapid adoption brings challenges. More than a third of businesses say that their biggest obstacle is a lack of technical skills, and another 35% cite privacy and security risks. Instead of outsourcing, most are building capacity in-house: nearly 70% of companies are training staff in data analysis, more than half are improving general AI literacy, and 40% are investing in prompt engineering for generative tools.

The understanding of the NDPA regulation, which came into force in 2023, has also improved. 65% of organisations see compliance as essential. Many voluntarily apply data-minimisation and transparency standards even when not required to do so, aligning more closely with international norms and easing collaboration with global partners.

Privacy is increasingly influencing business decisions — from investment priorities to system design. Companies are asking tougher questions: is specific data essential? How can exposure be limited? How can fairness and transparency be proven?

Trusted systems

As privacy becomes part of how technology is built, companies are being more cautious about the tools they use because they now want systems that protect customer data, with clear boundaries between data and model training, straightforward controls, and reliable records for compliance teams.

Demand for business software that balances productivity with privacy is also growing. Zoho, among others, has seen strong customer growth as more organisations are looking for platforms that support responsible data handling.

The study identifies three main reasons behind AI adoption: to make work more efficient by automating routine tasks, to support better decision-making by identifying patterns sooner, and to improve customer engagement through faster, more relevant interactions. But none of this can succeed without trust. Nigeria’s experience shows that privacy and innovation can reinforce each other when they’re built together.

There’s still work to do because some industries are moving faster than others, and smaller businesses often face the biggest hurdles in time, cost and skills. Enforcement is also patchy; while the law is clear, application across sectors and geographies is a work in progress.

The next steps are more practical, requiring investment in skills – from data analysis and AI literacy to sector-specific training – and for governance to be put in place, with clear responsibilities, written policies, and a plan for managing errors or breaches. Privacy impact assessments should become part of every new system rollout, enabled by technology.

As AI becomes fundamental to doing business, Nigerian companies that build it carefully and responsibly will be better able to compete at home and abroad.

Kehinde Ogundare is the Country Head for Zoho Nigeria

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