Why Many SMEs Collapse After Crossing ₦100 Million Annual Revenue

In Nigeria and across Africa, a lot of small businesses fight tooth and nail to cross that ₦100 million annual revenue mark. It feels like the promised land. Many entrepreneurs see it as the point where their hustle finally pays off.

But the truth is this, crossing ₦100 million is not always a sign of stability. In fact, it’s the point where many SMEs start to crumble.

Why?

First, most businesses were built to survive, not to scale.

When you’re running below ₦100 million, you can still get by with informal structures — your cousin handling finance, one loyal staff doing three roles, and decisions being made on the fly. But once revenue grows, cracks begin to show. Suddenly, the same informal system that once kept the business afloat becomes the very thing that drags it down.

According to PwC, 80% of Nigerian SMEs die before their 5th year. Many of them collapse when they start growing too fast without building the systems to sustain that growth. And it’s not just Nigeria — Kenya, Ghana, and South Africa show the same pattern.

Second, many founders fall into what I call the “growth trap.” They see ₦100 million as proof they’ve arrived, so they start spending big, expanding too quickly, or diversifying into areas they know little about. Instead of reinvesting in strong financial controls, governance, or skilled talent, they chase the next shiny idea.

I once advised a mid-sized agribusiness in Abuja that crossed ₦120 million in annual turnover. On paper, they looked solid. But the books told a different story — no clear financial reporting, weak supply chain management, and a founder still trying to approve every single transaction. Within two years, the business was bleeding cash and eventually folded.

The third problem is talent. Many SMEs fail to transition from hiring “helpers” to hiring “professionals.” At ₦100 million and above, you need accountants, HR managers, legal advisors, and proper sales teams. Relying only on loyal staff who grew with you may be good for trust, but not always for growth.

So what’s the way forward?

Crossing ₦100 million should not be seen as a finish line but as the beginning of a new phase that demands stronger structures. Build systems, separate business money from personal money, invest in proper governance, and hire people smarter than you in key areas.

Because the truth is this:

What gets you to ₦100 million is not what will take you to ₦1 billion.