Abdihakin Geelle

Starting a small business is a dream for Somali people, but the sad truth is that most small businesses fail within the first few years. In fact, according to the Small Business Administration (SBA), only about half of all small businesses survive past the five-year mark. The reasons for this high rate of failure are many and varied, but there are a few common themes that emerge time and again. If you’re thinking of starting a small business, it’s important to be aware of these pitfalls so you can take steps to avoid them.

Lack of Planning

One of the biggest reasons why Somali small businesses fail is a lack of planning. Many Somali entrepreneurs start a business without creating a detailed business plan, which is a roadmap for the company’s future. Without a business plan, it’s difficult to identify key milestones, set goals, and allocate resources effectively. Additionally, a business plan can help you secure funding from investors or lenders. If you don’t have a solid plan in place, it’s easy to get sidetracked and lose sight of your goals.

A business plan should include a detailed analysis of your target market, your competition, your marketing strategy, and your financial projections. It should also outline your company’s mission and vision, and clearly define your products or services. Taking the time to create a comprehensive business plan can help you avoid costly mistakes down the line and give you a roadmap to success.

Insufficient Funding

Another reason why small businesses fail is a lack of funding. Starting a business requires a significant amount of capital, and many entrepreneurs underestimate how much money they will need to get off the ground. Even if you have a great business idea, it’s essential to have enough funding to cover startup costs, operating expenses, and unexpected expenses. Many Somali small business owners rely on personal savings or loans from friends and family, but this may not be enough to sustain the business in the long term.

If you’re starting a business in Somalia, it’s important to have a realistic understanding of your financial needs. You should create a detailed budget that includes all of your startup costs, such as equipment, inventory, and legal fees, as well as your ongoing expenses, such as rent, utilities, and employee salaries. You should also have a plan for how you will generate revenue and when you expect to become profitable. If you need additional funding, there are a variety of options available, including loans, grants, and crowdfunding.

Poor Management

Finally, poor management is a common reason why most Somali small businesses fail. Running a business is challenging, and it requires a diverse set of skills, including financial management, marketing, and leadership. Many entrepreneurs start a business because they have a passion for a particular product or service, but they may not have the expertise to manage the business effectively. Poor management can lead to cash flow problems, low employee morale, and a lack of direction for the company.

If you’re starting a business, it’s important to be honest about your strengths and weaknesses. If you don’t have experience in a particular area, such as accounting or marketing, consider hiring someone who does. It’s also important to develop strong leadership skills, so you can motivate and inspire your employees to do their best work. Finally, it’s essential to have a clear vision for your company and to communicate that vision effectively to your team.

Abdihakin Geelle


Starting a small business can be a rewarding experience, but it’s important to understand the risks involved. Many small businesses fail due to a lack of planning, insufficient funding, and poor management. By addressing these common challenges, you can increase your chances of success and build a thriving business. Remember to create a solid business plan, secure enough funding, and develop strong management skills to give your business the best chance of survival. With the right mindset and approach, you can turn your small business dream into a successful reality.

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