WHY FAILURE DESERVES A SECOND LOOK

What Every Nigerian Business Owner Should Understand About Setbacks, Survival and Sustainable Growth

Let us be honest. Running a business in Nigeria is not easy.

You may have started your business with a clear vision, a good product, a business plan and the determination to succeed. You may even have experienced some growth. However, as the business expands, the realities of operating in Nigeria begin to test your decisions.

The cost of supplies increases. Electricity and transportation expenses take a bigger share of your revenue. Customers become more careful about spending. Suppliers change their prices, employees expect better compensation, and access to affordable funding remains a challenge.

A business that appeared profitable a few months ago may suddenly find it difficult to meet its obligations.

When this happens, what do you do?

Do you increase your prices? Reduce your workforce? Borrow more money? Spend more on advertising? Introduce another product? Or simply wait for the economy to improve?

These may be reasonable options, depending on the circumstances. However, before making another major decision, there is something every business owner should do: Stop and examine what the situation is revealing about the business.

A difficult business period may expose weaknesses that were already present yet had gone unnoticed. It may reveal poor financial controls, inefficient operations, weak leadership, inadequate employee skills, an unsuitable pricing structure or a business model that no longer meets customers’ expectations.

This is why failure deserves a second look.

Not because losing money is good. Not because every failed decision is a blessing in disguise. Rather, it is because a business that examines its mistakes has a better opportunity to make informed changes than one that keeps repeating them.

The real question is not simply, “Why did we fail?” It is, “What must we understand, change or improve to avoid making the same mistake again?”

1. Are You Managing the Business You Have Today or the Business You Started Yesterday?

One of the biggest mistakes a business owner can make is becoming too attached to the approach that brought the business its initial success. Think about a retailer who has operated from a physical shop for several years. The business has a familiar location, loyal customers and a product range that once generated good sales.

However, customers are changing how they shop. They now discover products on Instagram, compare prices on WhatsApp, ask questions online and expect convenient payment and delivery options.

The retailer notices a decline in walk-in sales and responds by reducing prices or spending more money on traditional advertising. Yet, what if the problem is not simply the price? What if customers have changed how they want to find, evaluate and purchase products?

The business may need to improve its online presence, display products more effectively, respond to enquiries faster and provide a more convenient buying experience.

Netflix provides a useful example. The company began with DVD rentals delivered to customers. As technology and customer preferences changed, it moved into online streaming and later expanded into original programming. In 2023, Netflix announced the end of its DVD rental service, describing how the DVD business had paved the way for streaming.

The lesson is not that every business must become a technology company. Rather, the business model that helped you start may not be the model that will sustain your future growth.

Ask yourself:

• Are my customers still buying the way they used to?
• Has the market changed while my business has remained the same?
• Are my competitors providing something customers now value more?
• Am I investing in activities because they produce results or simply because I have always done them?

A business owner must learn to recognise when an old approach has reached its limit.

2. What If the Idea Was Not Completely Wrong, but the Approach Was?

Not every disappointing business result means the original idea has no value.

Sometimes, the product is not the problem. The price, target market, positioning, timing or way the product is presented may be wrong.

Consider an entrepreneur who invests a significant amount of money importing kitchen appliances. The products arrive, yet sales are slower than expected. The immediate conclusion may be that customers are not interested.

However, is that really the case? Perhaps the products are being marketed to the wrong audience. Perhaps customers do not understand their benefits. Maybe the price is beyond what the target market can afford, or the business has not established enough trust for customers to make a purchase. Before abandoning the idea, the entrepreneur needs to investigate.

This brings to mind the development of Post-it Notes.

According to 3M’s account of the product’s history, scientist Spencer Silver developed an adhesive that did not work as a conventional strong glue. It could stick lightly and be removed without damaging the surface. Another 3M scientist, Art Fry, later recognised that it could solve a different problem: keeping bookmarks in place without damaging the pages of a book. That discovery eventually led to Post-it Notes.

The important business lesson is that an idea may need a different application to become useful.

For a Nigerian entrepreneur, this could mean discovering a different customer segment, changing the packaging, introducing smaller and more affordable product sizes, improving distribution or repositioning a service.

However, this does not mean continuing to invest blindly in an idea that is not working. It means gathering information before deciding whether to improve, reposition or abandon it. Do not confuse persistence with refusing to change.

3. Is Your Business Growing Faster Than Its Ability to Manage Growth?

Some businesses do not struggle because they lack customers. They struggle because they are not prepared to manage the customers they already have.

Imagine an SME that started with five employees and has grown to twenty-five. It now serves more customers, processes more orders and generates more revenue.

From the outside, this looks like progress. However, behind the scenes, orders are delayed, customers complain about poor service, employees are overwhelmed and managers keep referring routine decisions to the owner.

The owner still approves payments, handles major customer complaints, supervises operations and settles disagreements between employees. The business has grown, yet its structure has not.

This is a common trap for entrepreneurs who build a business around their personal involvement in almost every activity.

At the beginning, this may work. When the business is small, the owner can supervise most activities directly. However, as the organisation expands, the same approach becomes difficult to sustain. The owner becomes the accountant, operations manager, sales supervisor, human resources officer and chief problem-solver.

Employees wait for instructions. Managers hesitate to make decisions. Simple tasks require approval, and the owner becomes the biggest bottleneck in the organisation. At this point, the problem may not be a lack of customers or employees. It may be the absence of proper structure.

The business needs clear responsibilities, defined reporting lines, effective processes, capable managers, performance targets and employees who understand what they are expected to deliver.

Ask yourself:

• Can my business operate effectively when I am not physically present?
• Do my managers have the authority and ability to make decisions?
• Are employees clear about their responsibilities?
• Do I have systems for monitoring performance and controlling costs?
• Can the business handle more customers without compromising service?

Growth without structure can turn an opportunity into an operational problem.

If your business cannot function without your constant involvement, you may have built a job that depends on you rather than an organisation that can operate independently.

4. Could Doing Less Help Your Business Perform Better?

When sales decline, the natural response is often to do more by introducing another product, opening another branch, employing more people, increasing advertisement, expanding the menu or adding another service.

However, is more always better?

Consider a restaurant in Lagos with an extensive menu. The owner believes that offering more meals will attract more customers. However, some meals require expensive ingredients and generate little profit. Others are rarely ordered. Food goes to waste, the kitchen becomes difficult to manage, customers wait too long and operating costs continue to rise.

The owner initially believes the restaurant needs more customers.

However, after reviewing sales records, food costs and customer feedback, the owner discovers that a few meals account for most of the regular orders.

The restaurant decides to reduce the menu, focus on its most popular meals, improve kitchen operations and train employees to deliver better service. The business becomes easier to manage. The problem was not necessarily the absence of customers. It was the complexity and cost of running the operation.

This is an important question for every entrepreneur: Are you expanding because the business is ready, or because you believe expansion is the only way to grow?

Before adding another product, service, location or employee, examine the performance of what you already have. Are your existing products profitable? Are customers satisfied? Are your operations efficient? Can your current team handle additional responsibilities? Sometimes, the best business decision is not to add more. It is to remove what is not working and concentrate on what creates value.

5. Before Replacing Your Employees, Have You Examined What They Need to Perform Better?

Here is another situation many business owners will recognise. You have an employee you trust. The person understands the business, knows the customers and has been part of the organisation for some time.

However, whenever a difficult assignment comes up, you still have to step in. When a major customer complains, you must resolve the issue. When a new opportunity arises, you cannot confidently delegate the responsibility. Your first thought may be that the employee is no longer suitable for the job.

However, have you considered whether the person has received the training, guidance and support required to handle greater responsibilities? A performance problem is not always an attitude problem. It could be a skills gap, unclear expectations, poor supervision, inadequate tools or a lack of confidence.

For example, an employee may be excellent at customer service yet lack the negotiation skills required to manage a major corporate client. A competent supervisor may understand daily operations while lacking the leadership skills needed to manage a larger team. Replacing such employees without investigating the real problem may mean losing valuable experience and spending more money recruiting and onboarding someone new.

This does not mean every employee should be retained regardless of performance. It means management should understand the reason for poor performance before deciding what to do.

Ask yourself:

• Have we clearly communicated what we expect from this employee?
• Does the person have the skills required for the role?
• Have we provided adequate training and supervision?
• Are we measuring performance using clear targets?
• Is the employee being given the opportunity to improve?

The answer may be recruitment. However, it may also be training, coaching, clearer responsibilities or better performance management. Before you replace a good employee, examine whether you have given that person the opportunity and support to become better.

6. Are You Treating the Symptoms or Solving the Actual Problem?

One of the reasons businesses repeat mistakes is that they often respond to the visible problem without investigating what caused it. Imagine your business launches a new product, yet sales are disappointing. Management concludes that the marketing team has not done enough.

However, why are sales low? Perhaps customers do not understand the product.

Why do they not understand it? Perhaps the business has not communicated its benefits clearly.

Why is the message unclear? Perhaps the organisation did not properly research what customers wanted before launching the product.

The problem may not be advertising after all.

This is where root cause analysis becomes useful. One recognised technique is the Five Whys, which involves repeatedly asking why a problem occurred to investigate its underlying causes. The American Society for Quality explains that the technique is intended to help teams move beyond symptoms towards the root of a problem.

For example:

Problem: Customer complaints about delayed deliveries are increasing.

• Why? Orders are not leaving the warehouse on time.
• Why? Products are not ready when dispatch is scheduled.
• Why? Inventory records are not updated promptly.
• Why? Employees are not following a consistent stock-recording process.
• Why? The business has not established clear procedures or adequate supervision.

The answers will vary depending on the actual evidence, yet the exercise helps management investigate beyond the first explanation.

The same approach can be applied to employee performance, customer retention, rising expenses, poor productivity and operational delays.

A business owner must be careful not to blame employees automatically when the organisation itself may have created the conditions that make good performance difficult.

Do not rush to find someone to blame. First, find out what is causing the problem.

7. Five Lessons Every Business Setback Should Teach You

A setback should not end with regret. It should produce a better decision or a practical improvement.

Here are five lessons worth taking seriously.

Lesson 1: Admit when something is not working.

You may have invested heavily in a product, location, strategy or business idea. However, the money already spent cannot be recovered simply by continuing to invest. If the evidence shows that something is not working, be willing to reconsider it. Good leadership requires the courage to face uncomfortable facts.

Lesson 2: Listen to customers, especially those who stop buying.

When sales decline, businesses often concentrate on attracting new customers. However, customers who have stopped buying may have important information about what needs to improve.

Find out whether the problem is price, quality, service, delivery, convenience or customer experience. A complaint may be uncomfortable to hear, yet it can reveal a weakness that management has overlooked.

Lesson 3: Prepare the business before expanding.

More branches, products and employees do not automatically create a stronger organisation. Before expanding, examine profitability, cash flow, workforce capacity, management capability and operational systems. Growth should be supported by the resources and structure required to sustain it.

Lesson 4: Test before committing large resources.

Before importing a large quantity of products, test customer demand. Before renting another shop, assess the market. Before employing a large team, establish whether the business can sustain the additional costs.

Small experiments can help you learn before committing significant resources.

Lesson 5: Turn experience into a system.

If employees repeatedly make the same mistakes, review their training and supervision. If orders are regularly delayed, improve the delivery process. If expenses keep exceeding the budget, strengthen financial monitoring.

Do not allow the organisation to keep learning the same lesson through repeated losses. Document what happened, communicate what was learned, train the team and improve the process.

That is how individual experience becomes organisational knowledge.

8. How Do You Recover Without Making the Situation Worse?

When a business begins to struggle, panic can lead to decisions that create additional problems.

A business owner may borrow without a repayment plan, slash prices without understanding profit margins, dismiss employees without assessing operational needs or invest more money in an untested strategy. A more structured approach can help.

First, understand your financial position.

Review cash flow, outstanding debts, receivables, operating expenses, stock levels and activities that are losing money. Know where the money is coming from and where it is going.

Second, identify what is putting pressure on the business.

Is it declining demand, high production costs, poor pricing, delayed payments, waste, inefficient processes or weak workforce performance? Use records and evidence rather than assumptions.

Third, speak to the people who understand the problem.

Customers, employees, suppliers, managers and business partners may have information that management has overlooked.

Fourth, decide what needs to change.

Depending on the findings, the business may need to review its pricing, reduce unnecessary expenses, improve customer service, retrain employees, restructure operations or reconsider its business model.

Finally, make sure the changes are sustained.

Introduce clear responsibilities, procedures, performance targets and regular reviews. A recovery plan is only useful when the organisation follows through.

The objective is not merely to survive the immediate difficulty. It is to build a business that is better prepared for the next challenge.

9. The Nigerian Business Environment: What Can You Control?

It would be unfair to discuss business setbacks in Nigeria without acknowledging the environment in which entrepreneurs operate.

Access to finance, poor infrastructure, multiple taxes and levies, insecurity and skills shortages are among the challenges identified in PwC’s 2024 MSME Survey.

The World Bank’s May 2025 Nigeria Development Update also noted that, despite improvements in some economic indicators, inflation remained high and economic growth was not yet strong or broad-based enough to substantially improve living standards.

These realities matter.

A manufacturer cannot ignore the cost of electricity. A retailer cannot pretend that changes in customers’ purchasing power do not affect demand. A logistics business cannot operate without considering fuel, vehicle maintenance and transportation costs.

However, there is an important distinction between what a business owner cannot control and what the business can do in response.

You may not control the cost of electricity, yet you can review energy consumption and investigate more efficient options.

You may not control the general cost of borrowing, yet you can improve financial records, cash-flow planning and working-capital management.

You may not control customers’ purchasing power, yet you can review your product sizes, pricing, value proposition and target market.

You may not control every market change, yet you can improve how quickly your organisation identifies and responds to it.

This is not an argument that good management can eliminate every external challenge. It cannot.

Rather, it is an argument that businesses should not allow external challenges to prevent them from improving the areas within their control.

Resilience is not just about enduring difficult conditions. It is about building the capacity to respond intelligently when conditions change.

10. Is Your Business Equipped for the Next Opportunity?

There is another side to business setbacks that deserves attention. Sometimes, a business is not struggling because opportunities are unavailable. It is struggling because the organisation is not adequately equipped to take advantage of them.

A new customer may require a level of service the team cannot currently deliver. A major contract may demand stronger project management. An expansion opportunity may require managers who can operate independently. A new market may require employees with different technical or commercial skills.

The opportunity is there, yet is the organisation ready?

This is where people, leadership and systems become critical.

A business needs employees who can perform their responsibilities, managers who can lead effectively, processes that support consistency and leaders who can make informed decisions.

It also needs to recognise that people development is not an expense to be considered only when business is doing well. The right training and development can help close skills gaps, improve productivity and prepare employees for greater responsibilities.

At JSK Consulting Group, we believe sustainable business improvement requires the right combination of people, performance, leadership, systems and strategy.

We partner with organisations to identify performance challenges, strengthen leadership, improve workforce effectiveness, develop employees and build stronger organisational systems.

Through tailored learning and development, performance management and business support, we help organisations prepare their people and operations for better performance and sustainable growth.