Are you a Nigerian entrepreneur? Do you need advice on how to start a business in Nigeria? Do you need a sample business plan template or feasibility study report? Or you need Small Business Opportunities and ideas for starting a small business in Nigeria? Do you want to know the costs and challenges of doing business in Nigeria? Please read on to find out all of your doubts about “how to start a business in Nigeria.
I was inspired to write this article because I often come across Nigerians bracing up to start a business; armed with nothing but a presumed “million dollar idea.” Trust I have been there before.
Well, experienced entrepreneurs know that starting a business successfully takes more than just an idea.
I am a Nigerian entrepreneur with successful businesses to prove it (This blog is one proof) but this write up is not about me; it’s about you.
I am an active member of Nairaland.com; the largest online forum in Nigeria and everyday on this forum, I come across people wishing to start a small business but don’t know how to go about it.
Also on Nairaland will you find individuals with cash but they just don’t know what business to start or where to invest their money.
Well, this article will serve as a guide to those who want to start a small business in Nigeria. Now how do you start a small business in Nigeria? You will find out below.
But Just before I proceed to sharing with you some of my “how tos of starting a business in Nigeria”, let me also tell you that the act of buying and selling of goods or services called business may be categorized into small scale or large scale business. But the introduction of the internet has also created another type of business called the online business.
But the small scale businesses are more common in many countries, especially in Nigeria, due to its size, problems, advantages, benefits and source of funding are all easy to manage.
Any one can start a small scale business with a little capital but the large scale business has a bigger size of employees and cant easily be setup by small individual with low capital.
But either large or small, anyone going into business must consider the following strategies and see if he/she can work it out. (Well, you will be able to work it out with this definitive guide).
So let’s get down to business. BTW, I hope this helps you to start a successful business in Nigeria.
16 things to consider before you start a business in Nigeria:
The first step to starting a small business in Nigeria is to adequately prepare yourself.
You may think this is not important but it can be the thin line between success and failure.
Running a business in Nigerian is tough but highly rewarding; so to survive, you have to be tougher.
Nigeria is a harsh terrain to operate in but since we are Nigerians; I believe we are well grounded to tackle the challenges on ground.
Therefore, if you’re an entrepreneur and you intend to start a business in Nigeria that is gonna succeed, then it’s a must you have a good knowledge of the business and should be able to ask questions from mentors or other people on the same field of business.
Its important to know everything about the business which could be the good, the bad and the ugly side of the business
Now the question is, how do you prepare yourself?
You can prepare yourself by attending a seminar on the chosen line of business you wish to venture in and getting all the necessary information about your chosen industry.
You can also prepare yourself by accepting the reality that you can fail tomorrow; you prepare yourself by increasing your risk bearing capacity.
And ultimately, you prepare yourself by making up your mind to succeed despite the odds and competition.
To successfully start a small business in Nigeria, you must have a good idea. In fact, any idea or business opportunity will do; except you are pioneering a new invention.
I emphasized that any business opportunity will do because most Nigerians focus solely on the business idea without knowing that a business idea is just a tip of the iceberg in the entrepreneurial process of building a business.
A good business idea alone does not guarantee success in business; an average business idea with good business fundamentals does. The world is filled with brilliant “million dollar ideas” but the world lack seasoned entrepreneurs.
You don’t need to crack your head to create something new; don’t bother re-inventing the wheel, just find a proven business line and learn the fundamentals.
You can even decide to buy a franchise if the capital is on ground. Nigeria has the needed population to absorb any product that is backed by a strong business sense.
The third step to starting a small business in Nigeria is to do a thorough feasibility study before investing a dime in any business opportunity.This is basically where the failure of most Nigerian entrepreneurs begin.
I have seen people who invest in a business idea or opportunity simply because a friend or relative said the business is profitable.
I have seen people jump into an industry blindly in reaction to unverified information.
I know entrepreneurship is all about risk taking but jumping into an industry without an adequate knowledge of its fundamentals is suicidal.
I know this because I am talking from experience; my uncle made this very mistake and he paid dearly for it.
Before jumping into any business or industry; make sure you have thorough understanding about its fundamental metrics.
Every business has an inside secret and if you must succeed; you must find such secret.
Understand the market of the industry you are going into and you will increase your chances of success.
The best way to begin such is by asking yourself the questions below:
Can you grab some market share in that proposed business industry of yours? These are the questions you must answer before starting a small business in any industry.
Don’t miss this post: 6 Steps To Decoding Your Target Audience
This is another point where most Nigerians miss it. It is estimated that over 85 percent of small business owners in Nigeria operate without business plans.
While I won’t criticize them because I started my first business (Pro Motivator) without any business plan; I think it’s worthwhile when you separate yourself from the pack.
Since majority business owners are operating without business plans; why can’t you capitalize on it and make it a competitive advantage for your business.
Banks don’t lend money to businesses that are operated without business plans but what if you have one? Well, I leave that for you to answer.
Please write a business plan for any business venture you want to undertake. Even if it is an informal, one page business plan; write it.
Your one page business plan may not get you the bank’s attention but it’s a way forward because it will help you concentrate on fulfilling your business mission.
Getting a business name not only shows the business is registered but gives an impression that your business is not a scam.
The name of the business makes it save for investors or sponsors to come invest in it.
You need to register your business, give it an uncommon business name and get started.
Don’t miss this one: 8 Mistakes To Avoid When Naming Your Business
7. Obtain the necessary Licenses and Permit
Well, I don’t need to hit much on this. If you don’t want to have the government and its law enforcement agents on your heels; make sure you obtain the necessary licenses and permit needed to operate your line of business.
Every industry has regulatory bodies governing it; so be sure to check their operational policy to make sure you are not going against the law.
Special edible product like foods and drinks need an approval from the food and regulatory body. It varies from countries to countries but anyone planning to go into business need a business license for its operation.
Also remember that you may need licenses and permits from both the local, state and federal government. So make sure you factor their costs in your budget.
Most businesses operate as sole proprietorships in Nigeria; you can choose to go the same way. But if you are truly out to build a successful business that will stand the test of time; I will advice you register a business name or factor it in your cost projections as a short term plan.
You can choose between the sole proprietorship; limited liability or public liability form of entity.
After choosing your business entity, you can get your business name registered at the Corporate Affairs Commission’s office in Abuja, Alausa Lagos or anywhere nearest to you.
I will advice you go through a lawyer to avoid unnecessary mistakes.
So you want to start a small business in Nigeria? If yes; then where are you going to locate your business?
Note: If you intend dealing on general merchandise; then you can consider locating your business in districts such as Alaba, Yaba, Tradefair, Idumota, Lagos Island, Oshodi, Mile 12, etc. But if you are in a service business or you are building a specialized brand; you can situate in areas such as Ikeja, Allen Avenue, Apapa, VGC, Victoria Island, CMS, Ikoyi, etc. But wherever you choose to situate, make sure you are well prepared to face the challenges of that terrain.
10. Raise Capital
Before making up your mind to start a small business in Nigeria, I want to assume that you have the necessary capital to at least launch the business.
After going through all the processes above; this is where you get down to the real deal, this is where you start the business.
Most people make wonderful plans, do feasibility research and even raise the needed capital to start a business. But for reasons best known to them; they just fail to start.
Maybe it’s because of the fear of failure; but what I do know is that not everybody has the guts to start a business. Most can only dream of it but only few dare to take the risk.
Are you willing to take the risk and start your own business here in Nigeria? Only you can answer that.
Actually, this is where your work as an entrepreneur gets tougher because statistics reveal that 75% of all new businesses started fail in their first five years. And of the 25% that survived; 80% of them will fail in the next five years.
It then means that about 90% of all businesses started will fail in their first ten years.
This statistics may be harsh but it’s the truth in its entirety. Are you prepared to lose it all? If your answer is yes, then start.
12. Choosing the Right Business
Have said a bit about this above. But just to clear your doubt the best lucrative type of business is to solve people’s problems.
And I strongly believe that if an entrepreneur can find a solution to problems regarding any field he’s about to venture into, his chances of succeeding in his business is well higher than if he just started a business that doesn’t outline nor value peoples lives.
13. Look for Leverage
The fastest way to grow in business is to leverage on the structure of well established businesses.So if you want to grow; then look for leverage.
Leverage can be in the form of getting a bank loan, getting credit line from suppliers; striking strategic alliance with a bigger player or getting a contract. No matter what leverage you decide to pursue; go for it.
Business without marketing is a waste of time. Marketing is the sole of business which can be inform of word of mouth, Internets e.g Google adwords, facebook adverts, blogs, banners, t.v and radio commercials.
Marketing could be in any form but it’s something that must be done if a were business were to thrive.
Don’t forget to read this: 31 Low-Cost Ways to Promote Your Business
If you can make it to this stage, then it’s congratulations because you’ve just started your own small business in Nigeria. You have started the game and showed resilience; now is the time to break it through.
At this stage, survival is the name of the game. You might take some pounding from stronger competitors; you might make a business mistake or even face intricate business challenges like a change in government policy but don’t give up. Stay strong and fight it through, I will see you at the top.
16. Patience is the Key
Well, too many individual want to become rich and successful entrepreneurs in a short period of time, especially my Nigerian Counterpart. Good but it takes patience and hard-work to actually reach that height. So you will do well to deploy patience if truly you want to achieve the most from starting a successful business in Nigeria.
Do you have any doubts or Have anything else to add? Do share your thoughts by using the comment box below.
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