Entrepreneurs in Ghana pour their hearts into the businesses they build. From the early days of hustling for customers, navigating licensing, managing suppliers and reinvesting every pesewa back into operations, the journey is deeply personal. When the business succeeds—when revenue grows, customers return and staff expand—it becomes more than a livelihood. It becomes part of identity, community and pride.
But markets evolve. New competitors emerge. Customer spending patterns shift with the economy. And sometimes, despite hard work, profits begin to decline. For many Ghanaian founders, the instinct is to hold on tightly—to believe things will turn around. Yet, knowing when to adjust strategy or step away entirely can be the difference between protecting value and losing everything. Recognizing when a decline is temporary and when it is structural is crucial.
A Ghanaian Example: A Local Restaurant Faces New Competition
Consider a business called Akosua’s Home Kitchen, a popular local restaurant in Kumasi that built its name serving homemade-style Ghanaian meals: waakye, banku and tilapia, fufu and goat soup, and assorted stews. It opened in 2019 near a university campus and quickly gained attention, especially among students and working professionals who wanted meals that tasted like home. By 2022, sales had reached GHS 1.8 million a year with annual profit of around GHS 350,000. Business was booming.
However, things began to shift in 2023. Several other restaurants and food joints opened nearby, offering similar menus. Food delivery services like Glovo and Bolt Food surged in popularity, giving customers cheap delivery options from dozens of competing kitchens. Suddenly, Akosua’s advantage—close proximity and convenience—mattered less.
Advertising on social media, once affordable, became more expensive as every restaurant fought for the same customers. Profit dropped to around GHS 180,000 annually. The numbers still looked decent on paper, but the trend was worrying.
In 2024, a large international fast-casual restaurant chain opened within walking distance of her location. They offered promo pricing and weekly combo deals that smaller businesses could not match. At the same time, inflation raised food costs—especially rice, oil and protein—while customers had less disposable income.
Sales projections showed that if Akosua continued operating exactly as she was, revenue might fall by nearly half within a year, and profits could disappear entirely shortly after. Her current financial statements still looked stable, but future conditions were clearly changing.
Weighing the Possible Paths
Once a decline becomes visible, there are generally three decisions a business owner can consider:
Staying the Course
Doing nothing and hoping business improves is understandable—especially when the business has once been stable and beloved. But hope is not a strategy. If consumer behavior has permanently shifted or competition has structurally changed the market, waiting only deepens losses. For Akosua, simply “waiting for things to return to normal” would risk seeing her profit vanish completely.
Restructuring and Adjusting Scale
Akosua could shift operations: reduce menu items, renegotiate rent, shorten operating hours, or move to a smaller space. She could lean into delivery, or partner with offices for catering. This path may stabilize profit on a smaller scale. But if the key issue is declining customer demand in the area, even serious restructuring might not restore growth. Restructuring can buy time, but it does not solve every problem.
Selling While the Business Still Has Value
If she chooses to sell now—based on her most recent profit of GHS 180,000—she may still secure a fair valuation, perhaps around GHS 600,000 to GHS 900,000 depending on assets, customer base and brand strength.
If she waits until profits collapse, that value could drop to almost nothing. Selling before the decline fully appears in financial records allows the owner to exit with dignity, capital and options for future ventures.
Read More: Avoiding Costly Funding Mistakes as a Ghanaian Small Business Owner
When Other Investors Are Involved
If Akosua built the business with support from family members, investors or business partners, the decision carries additional responsibility. These stakeholders trusted her judgment. Selling early while value remains preserves that trust. Waiting until the business collapses harms finances, relationships and reputation.
A founder who exits wisely is more likely to gain support again for future projects.
Identifying Early Warning Signals
Akosua recognized the problem early because she monitored factors that predicted future performance—not just the money coming into the till each week. She tracked:
• Daily customer foot traffic
• Average spending per meal
• Cost of ingredients such as oil, rice and poultry
• Social media advertising cost per engagement
• Local competitor activity
• Delivery versus dine-in ratio shifts
These signals showed where the business was heading long before losses appeared. Too many business owners rely only on monthly revenue and profit reports. Those reflect the past. Leading indicators give warning before damage occurs, allowing time to act.
Different businesses have different leading indicators. For example:
• A fashion boutique may watch store visits and online browsing.
• A transport company may track fuel price trends and vehicle maintenance costs.
• A school may monitor inquiries and enrollment pipeline strength.
The key is identifying the signals that show whether the future looks better—or worse.
Key Lessons When Considering an Exit
Two guiding principles stand out:
Don’t Chase the Past
The fact that Akosua once made GHS 350,000 per year doesn’t guarantee that number will return. Clinging to past success can blind an owner to present reality. A reasonable sale today is better than a regret tomorrow.
Act Before Decline Shows on the Balance Sheet
If the business is sold before revenue visibly drops, the owner negotiates from strength. Once losses appear, buyers lower offers—or walk away entirely.
Choosing to Exit Can Be a Strategic Win
Leaving a business is emotional, especially one built with effort and sacrifice. But choosing to exit while value remains can:
• Preserve financial gains
• Maintain confidence of partners and investors
• Protect personal reputation in the market
• Reduce future debt and stress
• Create space for new ideas or ventures
A successful exit is not quitting—it is good leadership.
Final Thoughts
Every business has cycles. Not every decline is reversible. The smartest entrepreneurs in Ghana are not the ones who hold on the longest—they are the ones who know when conditions have changed and act before value is lost. Recognizing the right moment to let go is not a defeat. It is strategy.
Frequently Asked Questions
Why is it difficult for entrepreneurs to step back when profits decline?
Because many founders are emotionally attached to their businesses and believe that past success guarantees future recovery, making it hard to recognize when conditions have changed.
What signals may indicate that a business is heading toward decline?
Early signs include rising costs, declining customer traffic, reduced inquiries, higher advertising expenses, and stronger competitor presence in the market.
Why is relying on “hope” not a viable business strategy?
Hope does not change market conditions or customer behavior—action, strategy and timely decision-making are what protect business value.
What is a practical example of business decline in the Ghanaian market?
Akosua’s Home Kitchen saw customer traffic drop and advertising costs rise after new competitors and food delivery platforms entered the market, reducing profitability.
What are the main options when profits begin to fall consistently?
A business can: stay the course and hope for change, restructure to match reduced revenue, or sell before value is lost entirely.
Why might selling early be the best option?
Selling while financial statements still show profit allows the owner to secure a meaningful return before decline becomes visible and reduces the business’s valuation.
How does restructuring help in some cases?
Restructuring may reduce expenses and keep the business running on a smaller scale, but it only works if demand for the product or service still exists.
What role do investors or partners play in exit decisions?
When other people have invested capital, the founder has a responsibility to protect their returns. Selling early may preserve trust and future support.
What are leading indicators, and why are they important?
Leading indicators are early metrics that predict future performance, such as customer visits or advertising engagement. They help entrepreneurs act before decline hits profits.
How can waiting too long affect business value?
If decline becomes visible in official financial reports, buyers lower their offers—or may refuse to buy at all—resulting in reduced or zero exit value.
Why is accepting a lower valuation sometimes smart?
It’s better to secure a guaranteed return now than wait for a return to past performance levels that may never come back.
What is the main mindset shift this article encourages?
Entrepreneurs should view exit decisions as strategic moves—not failures—focused on protecting value, relationships and future opportunities.