16/09/2025
Why Nigerian Employees Should Resist the Temptation of Running a Side Business by Proxy
In today’s Nigeria, the desire to own a business is strong. Many employees see entrepreneurship as the ultimate escape from the pressure of a 9–5 job. This has led to a common practice: setting up a side hustle while still working, then handing it over to someone else, usually a manager or staff—to run.
On paper, this sounds like a smart move: keep your salary, run a business, and make extra income. But this often ends in disappointment, financial loss, and frustration.
The Harsh Truth About Delegating Your Business
From experience, no one can run your small or medium-sized enterprise (SME) with the same passion, commitment, and discipline as you. Your employees see your side hustle as an opportunity to enrich themselves, not to grow the business.
They know you have a steady salary, so they rarely feel the same passion or sense of urgency as you do. Instead of sweating to make the business profitable, many quietly “milk” it—diverting money, overpricing suppliers, underreporting sales, poor customer service or simply being careless with operations. By the time you realize what’s happening, your hard-earned investment is already collapsing.
This is why so many side hustles fail—not because the idea was bad, but because the owner was absent.
Real-Life Stories of What Can Go Wrong
To make this concrete, here are simplified composite stories (drawn from patterns seen in many cases) that illustrate what can happen when you entrust a business that you only observe from afar.
1. The Boutique in the Suburbs
A mid-level public servant invests heavily in a boutique. She hires a manager to run it while she keeps her full-time job. Sales look okay for the first few months, but discrepancies emerge in stock records. She later discovers that cheaper items are going missing, pricing is inconsistent, and payments sometimes go into the manager’s account before ever being recorded. The shop closes within two years.
2. The Food Stall That Burned Out
Someone opens a small restaurant by investing severally. He entrusts daily operations to a friend while working his 9-5. The friend makes deals with suppliers that benefit himself, allows staff freebies, gives out credit too freely, and neglects maintenance. Profits spiral down. The owner attempts to intervene but finds that trust was misplaced. Eventually, the losses force closure.
3. Imported Goods from Abroad
Another example: someone procures goods overseas, stocks a shop, but leaves management to a distant relation - supervisor. When goods arrive, the supervisor delays clearance, allows local copying, distributes stock to insiders, and fails to update financial records properly. Local cheap versions of imported goods crop up. With weak oversight, costs accumulate. The business becomes unprofitable and is shut down after months of disappointment.
4. The Bakery Dream That Turned Sour
A young banker in Lagos invested heavily to start a bakery as his side hustle. He hired two trusted staff to run it while he kept his job. Within six months, he noticed sales reports didn’t match the supplies purchased. By the time he visited unannounced, one of the workers had opened a small shop nearby—selling bread baked with his flour and oven. The bakery shut down shortly after, leaving him with millions in debt.
5. The Fashion Store That Was Milked Dry
A woman in Abuja opened a boutique while still working at an international NGO. She stocked the shop with quality clothes from Turkey and entrusted her cousin to manage it. At the end of the first quarter, there was barely any profit to show. Later, she discovered her cousin had been selling at discounted rates to friends and keeping part of the cash. Within a year, the shop couldn’t sustain rent payments, and she closed it down.
6. The Costly Restaurant Experiment
In Port Harcourt, a civil servant invested his gratuity in a small restaurant managed by a family friend. The first few months looked promising, but as time went on, the staff became complacent—eating meals for free, giving credit endlessly, and inflating expenses. Eventually, the restaurant was running at a loss. With no close oversight, the business collapsed, and the man lost his retirement savings.
These stories are not exceptions—they are everyday realities. These stories reflect what many SMEs experience. The root cause isn’t always a bad business idea—it’s poor oversight, misaligned incentives, and letting someone else run “your baby” without your daily input.
Real Statistics: The Harsh Reality for Nigerian SMEs
These aren’t just isolated stories—you’ll see across Nigeria, many new businesses don’t survive long, especially when they are not closely managed by the owner.
• According to a 2023 report by SMEDAN (Small and Medium Scale Enterprises Development Agency of Nigeria), about 80% of SMEs fail before their fifth anniversary. (thesmebusinesshub.com+3Punch+3Independent+3)
• More than 20% of SMEs fail in their first year, and nearly 50% fail within the first five years. (The Guardian Nigeria+2thesmebusinesshub.com+2)
• A scholarly study of Lagos State found that only 42.2% of SMEs survive up to five years. (Lagos Institute of Research+1)
• In Lagos State, manufacturing SMEs have a somewhat better survival; about 53.8% survive longer (with an average lifespan of ~18 years among surviving ones), but trade SMEs have lower survival rates. (Lagos Institute of Research+1)
• Over 40% of SMEs fail because of low demand for their product/service; nearly 20% fail because they’re outcompeted; another ~17% due to poor product offerings. (The Guardian Nigeria+2Moniepoint Inc.+2)
These numbers tell a story: most businesses don’t make it to year five. Many fail early. That makes running a business part-time—and letting others manage it for you—more dangerous.
The Better Alternative: Strengthen Your Salary Earning Power
Instead of chasing a business you cannot monitor, focus on building and strengthening your salary-earning capacity. That means:
• Acquiring new certifications to make yourself more valuable.
• Improving your skills so you can qualify for promotions.
• Positioning yourself for better-paying opportunities within or outside your current organization.
The salary from a stable job is not just “survival money.” If managed wisely, it can be the seed for future wealth.
Let Your Savings Work for You
Rather than pouring millions into a business that others will mismanage, channel your savings into financial instruments that grow quietly and securely over time:
• Money Market Instruments – Treasury bills, fixed deposits, and mutual funds provide safety and moderate returns.
• Equity Market – Investing in well-selected stocks can grow your wealth over the long term.
• Real Estate – Land banking or rental properties can preserve and appreciate value and provide steady income.
By diversifying your savings into these assets, you build a financial cushion that grows while you focus on your career.
Build First, Then Launch
The goal should not be to avoid business altogether but to time it wisely. When your savings have grown significantly and your career has given you the experience, network, and confidence to step out, then you can transition.
At that point, you can liquidate part of your investments and set up a business that you will directly manage. This way, you are not gambling with your hard-earned money. You’re entering with stability, experience, and financial backing.
Final Thoughts
In Nigeria’s unpredictable business climate, passion and oversight are non-negotiable. Delegating your SME business while you remain in full-time employment is a gamble that too often ends up in tears.
Instead, appreciate your job, maximize your earning power, and let your savings work for you through investments. By the time you’re ready to take the bold step into entrepreneurship, you’ll do so from a position of strength—not desperation. Remember the ultimate guide, make sure you understudy and work with an existing business of your proposed entrepreneurship journey before starting yours. Even if it is some months apprenticeship.
Your job is not a trap; it’s a ladder. Use it to climb steadily toward your business dreams, the right way.
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