In order to avoid such, read carefully through this post and study it in order to avoid common pit holes in your business
I write out of experience, not just as a blogger, I own 2 successful businesses which I run and it would be nice to relate to readers how to run a successful business in Nigeria despite the harsh economic policies. I resigned from my paid job of 184,000 monthly to start up my own business after I had been able to save up a few Naira, I have always dreamt of waking up in the morning fully aware that my business is in my hands, and the will to succeed depends on my determination and most importantly, God’s grace.
Everyday u hear people say “I want to start a business but I don’t know how to start or what to venture into” though I was once in that shoe until I started checking online and talking to friends about business opportunities in Nigeria, and that was how I ventured into my first line of business of which I am very proud of today.
Oops!! I’ve been talking too much about myself, now to the crux of the matter. This article will serve as a guide to those who want to start a small business in Nigeria. You can also visit one of my posts on profitable businesses you can start with 10,000 Naira in Nigeria.
How To Successful Business In Nigeria With Ease
1. Mental Preparedness
The first step to starting a small business in Nigeria is to adequately prepare yourself mentally. You need to throw pride aside and hit the street. Throwing pride aside does not meant making yourself available to be trampled upon, it is very important 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, it is always good to expect the best but be prepared for the worst, with that mentality, you will be mentally alert and guarded.
Also, attending a seminar on the chosen line of business you wish to venture in and getting all the necessary information about your chosen industry, the beautiful thing about this is that most seminars for SMEs are free to attend or if a fee is attached, its usually a negligible amount. 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. Carry Out A Proper 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 begins. 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. Carry Out Survey Plan
Do you know what wins wars between two countries or more? Information does the winning. This is the most vital part of starting up a business, getting information gives you the right tools and amour, it is important you carry our proper and detailed survey plan before venturing into any business of your choice; 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. Draw Up A Business Plan
This is another point where most Nigerians miss it. It is estimated that over 85 per cent of small business owners in Nigeria operate without business plans. Well this does not determine the success or failure of your business but it plays a key role in defining your business path. It helps in acquiring loans or grants for your business from banks or the government.
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
Your location can mar or make your business. You must take location likely when carrying out your survey plan as stated earlier in this post if you want to run a successful business in Nigeria. Questions you must ask yourself are
- Where do you intend locating your business
- What is the population density of the area
- What are the calibre of people in that location, this depends on the nature of business you are venturing into (Residential, industrial or corporate environment)
- 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, Trade Fair, 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
This is very important in order to avoid embarrassments from government agencies. 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 Business
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. Acquire Leverage
One of the fastest ways 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.
11. Business Take-Off
Once you are done with all the processes listed earlier in this post; this is where you get down to the real deal, this is where the business takes off. 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.
At this stage, all I can say is that you are good to go 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, hard work, consistency, honesty, determination should be your watchword and most of all the Grace of God and the sky would be your take off point
I hope this post has been helpful in its little way.