The risks of starting a small business are real, but not equal. A handful, mostly around money and suppliers, cause most import-business failures. This guide ranks all ten, then goes deep on the three that actually kill importers: cash flow, supplier risk, and cross-border payments, with fixes specific enough to act on this week. It is written for online sellers and importers sourcing from China.
Key Takeaways
- The three risks that end most import businesses are poor cash flow, unverified suppliers, and costly cross-border payments, so put your effort there first.
- Every fix below includes a concrete action and a way to judge whether you have done it, not just general advice.
- Cash flow fails on timing, not just profit, so forecasting when money actually lands is more urgent than forecasting how much.
- Supplier fraud is reduced through trial orders, verification, and escrow, not through trust in a single conversation.
- Cross-border payment cost and visibility directly affect margin, so measure your true cost per order before you scale.
The three risks that actually kill import businesses
1. Poor cash flow management
Cash flow is the timing of money in and out of your business, and running out of it is the leading reason small businesses close. The trap is subtle: you can be profitable on paper and still fail because money arrives later than your bills are due.
The fix, step by step:
- Build a rolling 13-week cash forecast. A simple sheet works: one column per week, rows for opening balance, expected money in (with the date it actually lands, not the invoice date), money out (rent, stock, supplier deposits, duties), and closing balance.
- Mark your tightest week, the one with the lowest closing balance. That number is your real runway, not your bank balance today.
- Build a buffer equal to at least one full supplier order cycle, because a single delayed supplier payment can stall your entire inventory cycle and turn a profitable month into a missed restock.
How to know you have done it: you can answer, without checking, “which week in the next quarter is my tightest, and what is my balance that week?” If you cannot, the forecast is not real yet. For the mechanics of holding and converting funds across currencies, see our guide to multi-currency accounts for businesses.
2. Operational and supplier risks
Once you source from China, your biggest operational risk shifts to suppliers. This is where importers lose the most money, usually to a supplier who takes a deposit and disappears, or ships goods that do not match the sample.
The fix, step by step:
- Verify before you pay. Ask for the supplier’s business licence, cross-check the company name against the platform account, and confirm the receiving account belongs to the same registered business, not a personal name. A mismatch between company and payee is one of the clearest warning signs.
- Start with a small trial order rather than a full container. The cost of one small order is your insurance premium against a five-figure loss.
- Use platform escrow or trade-assurance features where available, so funds release only after agreed conditions are met.
- Keep every quote, chat, and specification on record in one place, so a dispute has evidence behind it.
How to know you have done it: before any payment leaves your account, you can tick all four of company name matches account, payee matches registered business, trial order placed first, and terms documented. Our guide to verifying Chinese suppliers walks through the checks in detail.
3. Cross-border payments that quietly eat your margin
Paying overseas suppliers is where hidden cost and poor visibility do the most damage. Traditional SWIFT transfers can carry layered fees and unclear status, leaving you unsure whether a supplier has even been paid, which delays production.
The fix, step by step:
- Calculate your true cost per transfer. Add the FX conversion spread, the transfer fee, and any intermediary or receiving-bank charges, then divide by the order value. That percentage, not the headline fee, is your real cost.
- Compare that figure against paying in CNH or CNY directly through a payments provider built for China trade. CNH is the offshore Chinese yuan and CNY the onshore version; the difference is explained in our note on CNY vs CNH.
- Prioritise payment visibility, so you can confirm a supplier has been paid and release production without guessing.
How to know you have done it: you can state your cost per order as a single percentage, and you have compared at least two ways of paying against it.
This is where a tool like WorldFirst’s option to pay Chinese suppliers fits. WorldFirst is a payments provider, backed by Ant International, that lets you hold and send multiple currencies and pay suppliers on platforms including 1688. Opening a business account is free with no monthly fee and pay-as-you-go pricing. To register, you will generally need your business registration documents, director identification, and business verification details. Fees and features vary by region, so confirm current terms before you rely on them.
[CTA: Open a World Account]
The other seven risks, and quick fixes
These matter, but they rarely sink a business on their own. Handle each with one concrete action.
Choosing the wrong market or niche
Before committing capital, confirm demand with real signals: check how many active sellers list the same product on Jumia and Amazon, and how their reviews read.
Done when you can name three competing listings and why buyers choose them.
Weak sales and customer acquisition
Pick one primary channel and one test channel rather than spreading thin. Track cost per acquired customer on each for 30 days.
Done when you know which channel returns more than it costs.
Underestimating competition
List competitors from both directions, local marketplace sellers and direct importers, with their price and delivery promise.
Done when you can state the one thing you do better than each.
Failing to build a scalable business
Document your three most repeated tasks (sourcing, fulfilment, customer service) as written steps someone else could follow.
Done when a task runs without you having to explain it.
Regulatory and compliance challenges
If you import physical goods, a Form M is mandatory, processed through an authorised dealer bank and the Central Bank of Nigeria, and must be completed before goods ship.¹ Goods without a valid Form M can be detained at customs, adding delay and storage cost.² As of 2026, documentation goes through Nigeria’s Single Window for Trade portal.³
Done when your registration, tax, and import obligations are confirmed with a qualified professional. This is general information, not legal advice.
Founder burnout
Move your most repetitive admin task off your plate this month, whether by delegating or automating it.
Done when you have reclaimed at least a few hours a week for decisions only you can make.
Chasing short-term profits over sustainable growth
Dropshipping is a fair example: low upfront capital, but thin margins and heavy reliance on supplier reliability. Treat it as a tested stepping stone with real numbers, not a shortcut. Our guide to dropshipping from China to Nigeria covers the trade-offs.
Done when you can state your true margin after all fees, not just the sticker markup.
How new providers compare on cross-border payments
If you are weighing options for paying suppliers and receiving marketplace payouts, compare features side by side. The table reflects publicly stated features and should be verified directly before you decide.
| Provider |
Hold multiple currency balances |
Pay Chinese suppliers directly |
Availability note for Nigeria |
| WorldFirst |
Yes, 20+ currencies held⁴ |
Yes, including on 1688⁴ |
Payments provider, no local licence in Nigeria |
| Wise |
Personal accounts only for Nigerian residents; cannot hold NGN balance⁵ |
Not positioned for direct China supplier payment⁵ |
Business account not available to Nigerian residents⁵ |
| Payoneer |
Sends NGN but cannot hold an NGN balance⁶ |
Not positioned for direct China supplier payment⁶ |
Card supports USD, EUR, GBP, CAD only⁶ |
Note: Features and availability may vary by region and are subject to change. Always verify current offerings directly with each provider before making a decision.
The core distinction is fit for China trade. WorldFirst positions its account around paying Chinese suppliers directly and holding balances across many currencies.⁴ Wise remains a strong tool for sending money abroad, but Nigerian residents cannot open a business account or hold an NGN balance on it.⁵ Payoneer can send funds in naira but does not let you hold an NGN balance, and its card supports only four major currencies.⁶ Choose based on whether direct supplier payment and multi-currency holding match how you actually trade.
Your pre-launch risk checklist
Work through these before committing significant capital:
- Build a 13-week cash forecast and identify your tightest week.
- Verify any new supplier’s licence and payee details, then place a small trial order.
- Calculate your true cost per cross-border payment as a single percentage.
- Confirm demand with three real competing listings before you buy stock.
- Pick one primary and one test sales channel, and track cost per customer.
- Confirm your registration, tax, and import documentation obligations with a professional.
- Document your three most repeated tasks so the business does not depend only on you.
FAQ
How risky is it to start a business?
Starting a business carries real risk, and a significant share of new businesses close within their first few years. The most common causes are running out of cash, misjudging demand, and operational breakdowns. None of these is inevitable. With honest planning around money, suppliers, and payments, you can reduce the odds of failure considerably, though no business is ever risk-free.
What are some types of risks when starting a business?
Common startup risks include financial risk such as poor cash flow, market risk from weak demand or heavy competition, operational risk including supplier and fulfilment problems, and compliance risk from missed regulatory obligations. For importers, payment and currency risks are especially important. Identifying which risks apply to your specific business is the first step to managing them.
What are the 7 types of business risk?
Business risk is often grouped into categories such as financial, operational, strategic, compliance or regulatory, reputational, market, and security or fraud risk. The exact list varies by source, but the idea is consistent. Different parts of your business can fail in different ways, so mapping each category helps you prepare rather than react.
What is the most risky business to start?
There is no single answer, because risk depends on capital required, competition, and how well you understand the market. Businesses with high upfront costs, thin margins, or heavy reliance on unfamiliar suppliers tend to carry more risk. Rather than avoiding a sector, reduce risk within it through research, small starting steps, and careful financial planning.
Can I import from China without a large starting budget?
Yes, though you should plan carefully. Starting with small trial orders reduces your exposure while you verify suppliers and test demand. Keep tight control of cash flow, understand your full landed cost including shipping, duties, and currency conversion, and confirm your import documentation obligations before you order.
Sources
- https://customs.gov.ng/?page_id=3145
- https://grokipedia.com/page/Form_M
- https://widophlogistics.com.au/what-documents-do-you-need-for-customs-clearance-in-nigeria-complete-checklist/
- https://www.worldfirst.com/af/product/pay/pay-chinese-suppliers
- https://wise.com/help/articles/2978049/where-can-i-use-wise
- https://wise.com/gb/blog/payoneer-nigeria
This article is intended for informational purposes only and does not constitute legal advice or professional advice. This article should not be regarded as constituting an offer or a solicitation to buy or sell any regulated or financial products or services. WorldFirst makes no representations or warranties regarding the accuracy, completeness, or applicability of the content, and readers are encouraged to consult with legal professionals or other professionals for advice tailored to their specific situation. WorldFirst does not guarantee the accuracy and completeness of this article and expressly disclaims any and all liability to any person in respect of the consequences of anything done or omitted to be done wholly or partly in reliance on this article.
