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Seun Tuyo: 6 Challenges of Sole Proprietorship



Starting a business is a huge accomplishment for many entrepreneurs, but maintaining one, is a bigger challenge. There are many challenges common to any business – small, large, sole-proprietorship, partnership or limited liability Company. Some include finance and human resource management, market stability, customer satisfaction and branding. However, there are some that are peculiar to small or large businesses run by sole-proprietors. This is popularly referred to as “One-man business” in Nigeria. Below is a summary of the peculiar challenges I believe these type of businesses face.

Owner Dependence
Many business owners work longer hours and a lot harder than their employees. This can be because they fear that their absence may put the business in grave danger. To these owners, if you were involved in a fatal accident, what would happen to your business? Nothing? Or everything? Many businesses suffer “owner-dependence syndrome”, which is often a result of the business owner being unable to let go of certain decisions and responsibilities as the business grows. The owner sources for funds, customers and new businesses by themselves. These owners fear that the employees may not have the same level of interest in the business as they do and may not be fully committed or that the employees may compromise the quality of the business as they may not entirely understand the business as seen through the eyes of the owner. The inability to delegate decisions and responsibilities is one of the biggest problems with these types of owners.

To delegate, however, you must first hire people that you have great confidence in their abilities. This way, you can be assured that your business will be properly managed. Andrew Carnegie, a self-made steel tycoon and one of the wealthiest 19th century U.S. businessmen said “No man will make a great leader who wants to do it all himself, or to get all the credit for doing it.”

Business Processes & Procedures
Most one-man businesses begin as small-scale businesses and they expand overtime. Two or five or twenty people working together to fulfill the business needs begin to increase in hundreds of thousands. Although these changes are happening, many sole proprietors hold on to the image of that small-scale business and do not welcome them. They make everything priority and ultimately, nothing a priority. Often times, entities like this do not have relevant business processes and policies that provide them with the information about what is working and what is not working. Chaos is the enemy of any business that strives for excellence. Without establishing realistic performance benchmarks, entities are unable to measure their results. How then can they tell if they are succeeding or not? Implementing realistic metrics and timelines for measuring and tracking key performance indicators (KPI) and key success indicators will create room for exploiting opportunities and/or managing challenges/threats.

Managing the Finances
Having enough funds to run your business is essential. The financial planning of any business should begin simultaneously with the business idea. This will help to put the cash flow of the business in perspective. Many businesses set a budget and struggle to manage their finances successfully and therefore, they begin to over trade or under trade. A budget can tell you what to trade or not to trade in, but it will not prevent you from trading, good judgments will. Staying in control of finances in any organization is important. Manage the business accounting efficiently and objectively. Get professional help if possible.

Human Resources
Our society breeds favoritism when it comes to employment. Often times, it is a factor of who you know and the level of influence that person has on the organization that gets you the job. It has become increasingly difficult for organizations to hire and maintain quality employees based on merit. This can be attributed majorly to the fact that some of these roles are given out on compassionate grounds or as a reward.

To grow an excellent business, it is important to have the end in mind at the start, find talented individuals with the right expertise who care about exactly the same things as you do and also, create the enabling environment in order to preserve these talents. You may be thinking of financial limitations, considering the amount of money to be spent on salaries, but many employees look for environments that make them feel appreciated. Maslow’s hierarchy of needs is a theory in psychology proposed by Abraham Maslow in 1943.

He described the pattern in which humans generally are motivated in a pyramid of five levels; he stated that the motivation travels upwards satisfying “physiological”, “safety”, “belongingness” and “love”, “esteem”, and “self-actualization” needs. Salary is important. However, rewarding a staff with other perks of the business – promotions, bonuses, holidays, will guarantee you their total commitment. Eventually, management, listed in order of importance, involves people, product, services and profits.

Quality & Growth
Whether a business is run solely by the owner or not, there comes a time in the business when the problems and benefits of growth struggle for the spotlight. As the business expands, it becomes almost impossible to be as detailed in managing the delivery of product/service compared to when it was small-scale. Unfortunately, many successes in business can be attributed to this committed and detailed style of management. Thus, it is harder for business owners to let go of this practice because of the fear of it been disadvantageous to the company. There is need for the business to strike a balance between the threshold for quality and sustainable growth.

Attracting New Businesses
Unless as a business owner you are heavily capitalized, you may need to consider other areas to generate funds that can support the business where the need arises or begin to roll out the business in phases while you maintain a job in paid employment concurrently. If only one client provides more than half of your income, then you are better of known as a contractor or a sub-contractor rather than a business owner. When that one client decides not to make payments as agreed or no longer desires your product or services, what happens to your business? Becoming a business owner means you are offering a variety of services that meet different needs. Many businesses are built around one objective – to meet the needs of one client. It is advisable to have more than one client you do business with. This way, you can manage your business better and prevent it from folding up if one client quits. Henry Ford, who was an American industrialist and founder of the Ford Motor Company, said, “It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages”. Do not put all your eggs in one basket.

With the society gradually becoming self-reliant, the business world is evolving. More entrepreneurs are struggling for center stage; more businesses are being set up and this means stiffer competition. It is only wise not to be complacent and content with mediocrity. Constantly review your marketing strategies as the market evolves and build a reputable brand.

Photo Credit: Dreamstime | Roi Brooks

Seun Tuyo is interested in social development. She loves to interact with people and has a desire to make a profound and positive impact around the world. She suffers moments of weaknesses at the sight of a cold bottle of Coca-cola and Chocolates. Feel free to reach her on twitter and instagram @seuntuyo.


  1. NotOneMan

    February 5, 2015 at 1:43 pm

    The problems highlighted here resonates with my company, I wish my boss can read this and learn.Good one Seun

    • Seun Tuyo

      February 6, 2015 at 11:44 am

      Please feel free to share NotOneMan, we all need these information at some point. Thank you

  2. Tito

    February 5, 2015 at 1:49 pm

    very interesting article Seun. Many indigenous companies in Nigeria do not survive a generation, mainly because of these points you have explained. I will recommend this to a few people who parade themselves as entrepreneurs, they need to plan their businesses properly in order for it to stand the test of time. good job and this was very well written

    • Seun Tuyo

      February 6, 2015 at 11:46 am

      Tito, thank you for your comments. I agree with you that strategies for business continuity are very important in any organization. Be it small, medium or large.

  3. Neighbor

    February 5, 2015 at 1:55 pm

    Nice write up…would pass this to my friends who want to be entrepreneurs.

    • Seun Tuyo

      February 6, 2015 at 11:48 am

      Thank You Neighbour

  4. Precious Okundaye

    February 5, 2015 at 2:04 pm

    Seun I concur…u nailed it.

    • Seun Tuyo

      February 6, 2015 at 11:49 am

      Thank you Precious

  5. Steego

    February 5, 2015 at 2:15 pm

    Another good one Seun. There are so many factors that will cripple a Sole -Owner of business in Nigeria. All your points are valid and any business will do well in most places anywhere in the world if they follow your advise. I will concentrate back home in Naija. The major problem of the Sole-owner of business in Naija as I see it is the employability of the employees. According to how they you as the owner, you are established and getting by and do not need the profit from your business. All they want to do is steal and divert funds from your business all the time. And there is a common saying that kills all businesses in our culture” you eat where you work” The eat in this saying is not their wages but all they can siphon or divert from you. They do not see the aspect that if they help you grow they will grow with you. On the other hand too, the attitude of owners which is very common towards salaries and wages is so poor that the employees will be tempted to pilfer. There is a saying in business that if you pay peanuts you will have monkeys as workers. It is a small forum would have loved to discuss the effect of government on the Sole-owner of business. Just to indulge you look at power. I rest my case.

    • Seun Tuyo

      February 6, 2015 at 11:51 am

      Thank You for taking time to read and offer very valid points, I appreciate Steego

  6. flors

    February 5, 2015 at 2:48 pm

    Well written Seun as usual. Many private entrepreneurs need to read this article. Often times entrepreneurs jump into business as sign of prestige without feasibility study, plans of quality staff, and even succession plans.All they care about is the immediate profit” no room for auditors and means of control. Their attitude is its my money, I can spend it the way I like.Before you know it they’ve tampered with capital and the little profit accruing. Then they begin to down size. All they care is to go on holidays, with family whether staff welfare is affected or not. Gradually staff seek alternatives and the business begin to nose dive. Little attention is paid to human development. What do we see business once booming is going aground. .One man business in Nigeria suffer same end only a few with vision make it. .Thanks Seun it’s some food for thought! !!

    • Seun Tuyo

      February 6, 2015 at 11:53 am

      Thank You Flors

  7. anonymous

    February 5, 2015 at 3:32 pm

    Lovely write-up darling. In your self description ‘She suffers moments of weaknesses at the sight of a cold bottle of Coca-cola and Chocolates.’. Did Coca-cola pay for this? if not. methinks Cola should replace this. You don’t know the value in Naira this ‘free’ ad is giving them. I guess that’s the product of a good brand equity

    • Seun Tuyo

      February 6, 2015 at 11:56 am

      lol, this one had me in stitches. Over to you Coca Cola!!!!! Thank You Anonymous

  8. Jakal

    February 5, 2015 at 5:21 pm

    Tuyo, this is nice. Many Business owenrs are actually hustlers and just go for the money without creating a proper structure and continuity. They focus on the money and there is no precise plan for proper continuity and taking their business to the the global market. They do all the business thinking and do not encourage ideas that might affect their pockets, many useful ideas from employee die without even consideration. Thanks for the write up, hope they read and reflect on the way they do business and run their firms.

    • Seun Tuyo

      February 6, 2015 at 11:56 am

      Thank You Jakal

  9. Fola

    February 5, 2015 at 10:50 pm

    Thank you!

    • Seun Tuyo

      February 6, 2015 at 11:56 am

      You Welcome Fola

  10. Nonso

    February 6, 2015 at 9:46 am

    Nice article seun.. very well written..

    • Seun Tuyo

      February 6, 2015 at 11:57 am

      Thank You Nonso

  11. Seun Tuyo

    February 6, 2015 at 11:47 am

    Thank You Neighbor

  12. Tinuke

    February 28, 2015 at 1:37 pm

    Hello Seun, I enjoyed reading your article on being Thankful but not surprised and would like to feature it in my church’s bulletin this sunday. Please let me know if you are fine with this and if there will be any strings attached. Most certainly your name will be mentioned as the author. Thanks

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