Basic economic problems are challenges people encounter satisfying their wants with the limited resources available to them.
List of Economic Problems in Nigeria.
According to Legit.ng, here are the economic problems in Nigeria.
- Lack of interaction between the government and society.
- Human Development
- Crime and Terrorism
- Poor Educational System
The basic economic problem can influence the type of product a business produces. How they produce it. Who consumes it. The durability and usability of the product.
What if I am not offering products?
Your business should also be able to solve economic problems. Before you start a business, ask yourself – What problem will my service(s) solve.
In 2017, I was a step away from starting a campus magazine because the idea sounded very great. The magazine would provide the students with news and campus life articles, etc.
When I calculated the cost of producing one magazine, compared to how much the student can afford to buy.
I realized that I would run at a great loss. I would have to offer more than news articles. Besides, they can Google these news updates.
The idea was super cool and I was beginning to imagine that I would become the next Richard Branson. But, the service won’t have been valued because it won’t have solved any real problem.
Steps in Identifying What to Produce or Services to Render
Thinking of what to produce or the best service to offer is one of the basic challenges every business owner encounters. This results from the fact that the human wants unlimited but their resources are limited.
Other factors that affect what to produce is the production cost, availability of material for production. We will discuss this extensively in future. Don’t forget to subscribe to our newsletter, you will be notified.
Factors that Determine What to Produce
Factors that determine what to produce or the best type of services to render include;
Currently, the world is on lockdown due to the COVID-19 pandemic. In Akwa Ibom State where I live, everyone is required to stay at home expect from a health worker and food-related businesses.
Nobody is buying new clothes, cars, cosmetics right now. I feel sad for my customers who are in these industries. On the other side, we can see big brands like Google, Apple, Virgin, Tesla diving into the health sector.
They are assisting in the production of ventilators, face shield and other medical facilities to help in the eradication of the coronavirus. Ensure that your product/service provides a solid solution to an essential human need.
When considering the type of product/service to render. Be sure that people want to buy your product/service continually.
E.g: Imagine you had N500 but you didn’t have toothpaste (N450), Deodorant (N400) and Data (N500 – 1gb weekly plan).
Which will you buy?
Almost everyone will buy a toothpaste. No one thinks of buying toothpaste or foodstuff. They just buy it even with their only available resources.
Ask yourself – Does my target customer have enough money to buy my product or service?
“Do you see a Lamborghini ad on TV? No! That’s because people that buy Lamborghini cars don’t watch TV”
I saw this quote on a motivation handle on Instagram. It’s funny and sounds true. It is also the perfect example. There is no point selling car parts in a community where everyone owns a bicycle.
You also have to consider the cost of providing your services or manufacturing your products. Once I got over-excited with a new client.
I didn’t want to lose the client so I undercharged her. The side effect of that decision cost me a year in school. Your business will collapse if you don’t have enough profit.
Most business owners focus on generating revenue and they don’t care to calculate the actual profit they will make.
Availability of Resources
As a digital marketer, my basic resources are data and constant power supply. When school is in session, I used the school power supply and free internet service to do my work and charge my gadgets. I save a lot of money on power and data subscription.
Let’s say, you are a Cake Designer. You should travel halfway across the world to get resources for your products. But if that is the case, you have to partner with a logistics agency to get you material to you with much stress.
Don’t just start a business because the idea sounds super cool. Do some research, be sure that people need your products or services. Also, ensure do to proper market research to know if you have enough audience to support your business. We will publish an article that covers this topic shortly.