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.
1.
Prepare Yourself
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 on 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. Now 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.
2.
Have a Good Business idea
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
business idea is just another idea. But an idea backed by a strong feasibility,
a thorough business plan and a smart business team is no longer an idea. It’s
now a solid business opportunity worth pursuing.” – Ajaero Tony Martins
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.
3.
Do a Feasibility study
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 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 dad made this very mistake
and he paid dearly for it.
4.
Understand your Market
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:
Who
are the customers?
How
do they want to be served?
Who
are your major competitors?
Who
is the market leader?
Do
you have a chance for survival?
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.
5. Write a simple Business Plan
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 without any
business plan; I think it’s worthwhile 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.
6. Find a Good Location
So
you want to start a small business in Nigeria? If yes; then where are you going
to locate your business?
Are
you going to site your business within your neighborhood or are you going to
site your business in an industrial area?
Are
you going to separate yourself from the crowd by building your own brand in a
specially selected location?
Or
you are going to operate from the centre of trade or commercial places in
Nigeria?
If
you intend dealing on general merchandise; then you can consider locating your
business in districts such as Aba, 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.
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. 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.
8.
Register your company
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.
9.
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.
10.
Start 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
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.
11. 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.
12.
Survival is the Game
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.
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