Here is a reason many businesses shut down...

Besides access to finance, another major reason businesses shut down is this.

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A friend of mine ran a tech company that seemed promising. They had customers, good branding, and a solid business model. But within two years, the company collapsed: not because they didn’t have demand, but because they mismanaged their money.

Many entrepreneurs think competition is the biggest threat to their business. They worry about pricing wars, market saturation, and bigger brands. But in reality, competition is rarely the problem. Most businesses die because they don’t manage cash flow well.

I’ve seen businesses with amazing products run out of money because they spent too much on unnecessary things: expensive office spaces, flashy branding, hiring too fast. I’ve seen others collapse because they failed to separate personal money from business money. When you keep dipping into business funds for personal expenses, you’ll wake up one day and realize you’re out of cash.

One of the worst mistakes a business owner can make is spending based on projected revenue instead of actual cash in hand. Just because you expect ₦10 million in sales next quarter doesn’t mean you should start spending like it’s already in the bank. I’ve seen entrepreneurs sign long-term office leases, hire too many staff, or launch expensive marketing campaigns, only for expected revenue to delay or never come at all.

The businesses that survive long-term manage cash like oxygen. They control costs aggressively, avoid unnecessary expenses, and prioritize cash flow over profit. A business can be profitable on paper but still fail if cash flow is negative.

A friend once told me, “Revenue is vanity, profit is sanity, but cash flow is reality.” Many entrepreneurs chase high revenue numbers, but if cash isn’t properly managed, it means nothing. The real flex is running a business that can survive even when revenue slows down.

So before you worry about competition, fix your money management. Track every kobo. Avoid overspending on non-essentials. Pay yourself a salary, don’t use business funds for personal needs. Because businesses rarely die from competition—but poor cash flow will kill you fast.