Nigeria has become the hub of investment in the Sub-sahara region of
Africa. Even with the almost failing economy as a result of the downturn in the global oil market, the business opportunities
in the country is enormous. In order to start a successful business in Nigeria,
there are steps that must not be overlooked. Before I talk about the
steps you need to take to start a successful business in Nigeria, I will
briefly talk about the pros and cons of doing business in Nigeria.
1. High Population Growth
A country with a growing population of over 200 million citizens
with little available means of sustaining her demands is definitely a
place for you to do business. Nigeria is the most populous African
country and the 9th in the world. With this population the country has
very few companies, industries and enterprises to supply the demands of
her citizens ranging for food, shelter, energy, transportation, labour
market, etc, the list is inexhaustible.As long as the business fills a
need in the country and the strategies adopted are right, success is
assured.
2. Insecurity
Insecurity is nothing new in the country especially in the last eight years. Nigeria has been battling with the issue of terrorism, armed banditry, killer herdsmen which
has been a great cause of concern for business investors especially
foreigners. I am confident that the war
against terrorism in the country will be won. As we await that time, we
have to deal with it.
3. Poor Power Supply
Poor power supply is one of the major challenge facing the
industrialization and the successful growth of small business startups
in Nigeria. A country with a growing population of over 170 million
citizens can only boast of power generation that fluctuates between 4000
MW and 5000 MW. Successful companies operating in Nigeria has found a
way to deal with the challenge of power supply by providing their own
power.
10 Practical Steps to Start a Successful Business in Nigeria
1. Get a Peculiar Business Idea
What do I mean by “Get a Peculiar Business Idea”? Some of our
entrepreneurs or foreign investors believe that copying an already
successful business idea from another country to Nigeria will be the
needed key to success. But, the Nigerian market need ideas peculiar to
her. Look at the country, there are several needs to satisfy. Get your
head thinking, come up with something, satisfy needs, and you will
succeed.
2. Get Prepared
This is a very important step if you want to start a successful business in Nigeria. Sometimes you may get business ideas in
sectors that you are not conversant with. Your next step is to
adequately prepare yourself. You may think that this is not important
but it can be the thin line between success and failure. Running a
successful business on the Nigerian soil is tough but highly rewarding;
so to survive, you have to be tougher. Nigeria is a harsh but
potential-filled terrain to operate in, that is the reason why you need
to be well-grounded to tackle the challenges on ground. You can prepare
yourself by attending seminars and workshops 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 can prepare
yourself further by increasing your risk bearing capacity. And
ultimately, you prepare yourself by making up your mind to succeed
despite the odds and competition.
3. Conduct a Feasibility Study
There several reasons for conducting a feasibility study before
starting any business in Nigeria. One of the many steps to start a
successful business in Nigeria is to conduct a thorough feasibility
study to ascertain the business viability before investing a dime in the
business opportunity. This is basically where the failure of most
Nigerian entrepreneurs begin.
A lot of people invest in a business idea or opportunity simply
because a friend or relative said the business was profitable and they
end up being disappointed. Others jump into an industry blindly in
reaction to unverified information and end up with bankruptcy. Even
though entrepreneurship is all about risk bearing, jumping into an
industry without an adequate knowledge of its fundamentals is suicidal
4. Develop a Good Business Plan
As an entrepreneur, you should know that the importance of a good business plan cannot
be over-emphasized. Proper planning is essential for the success of any
business. Develop a robust business plan that includes every aspect of
your business and follow it judiciously. Business plan is specially
important because further to providing you with a clear set goal and
objectives, it can provide a reference point you can return to at any
point in time in your business.
Many Nigerians miss it here. It is estimated that over 85 percent
of small business owners in Nigeria operate without business plans. You
need to separate yourself from the pack if you are to succeed. Besides,
banks don’t loan money to businesses that are operating or that plan to
operate without business plans. Even if it is an informal, one page
business plan; write it down. Your one page business plan may not get
you the bank’s attention but it’s a step forward because it will help
you concentrate on fulfilling your business mission achieving the
desired goals and objectives
5. Become an Insider, Understand the Market
Before jumping into any business or industry; make sure you have
thorough understanding about the fundamental metrics of its market.
Every business has an inside secret and if you must succeed; you must
find that secret. Understand the market of the industry you are going
into and you will increase your chances of success. Becoming an insider
in any business sector you venture into is a step you should not over
look if you want to succeed.Ask questions such as: Who are my customers
going to be? How would they want to be served? Who are my major
competitors? Who is leading the market and what are they doing
differently? Do I 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 any business in any industry
in Nigeria.
6. Location! Location!! Location!!!
Location! Location!! Location!!! This is a very important step for
you. This decision is dependent on the type of business you want to
venture into. 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 centres 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. Register your Business
Most businesses operate as sole proprietorships in Nigeria and 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. Depending on the magnitude of the business you wants to
start, you need to Register your Business in Nigeria with the Corporate
Affairs Commission (CAC) to enable you do business in the country
legitimately.
8. Source for Start-up Capital
Before making up your mind to start a business in Nigeria, you
should have procured the necessary capital to at least launch the
business. Financing a business can often be one of the biggest
challenges faced by an entrepreneur anywhere in the world and Nigeria is
not an exception. There are a number of ways to source for business
start-up capital and it shouldn’t be difficult especially of you are a
Nigerian (Nigerians are really innovative people).
The truth is that it will mostly depend on the magnitude of the
business. If you do not have the start-up cash, you may resort to
borrowing either from friends or from the bank (in this regard, you have
to be cautious to avoid starting your business on the wrong foot of bad
debt). Debt is only good when the money will be invested for cash flow
or capital gain.
You can also look for levarage. The fastest way to grow in business
is to leverage on the structure of well established businesses. So if
you want to grow faster; then look for leverage. Leverage apart from
getting a bank loan can be in the form of 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.
9. Set Up a Good Team
Developing a winning team is critical to a business’ success. This
applies not just to the manager or top executives in the company but to
every single unit within the business organization. Especially for
start-ups, a good team will go a long way to determine if the business
survives the first few years after its establishment.
When it comes to hiring and managing talent, there are two basic
strategies that work. The first is to hire the very best talent on the
market; the second is to hire solid talent and bring out the best in
them. Since most companies can’t afford the cost of recruiting and
retaining the top tier of talent, most have to pick strategy number two.
From my own personal experiences, I will rate team as the second most
important factor after timing for any business success. As an
entrepreneurs, we sometimes find it difficult or challenging to get
together a great team.
10. Start your Business
Start the business and start it small. Remember that Rome was not
built in a day. After following all the steps above; this is where you
get down to the real deal, this is where you start the business. Most
people make wonderful plans, do a feasibility research and even raise
the needed capital to start the business but for reasons best known to
them; they just fail to start. Maybe it’s because of the fear of
failure. Not everybody has the guts to start a business, so you need
guts. Most can only dream of it but very 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.
You can contact our team if you need any help starting a small
business in Nigeria. Use our contact form on the contact page. Try us
today and you will have no reason to regret. Quality service guaranteed.
This piece originally appeared at
AidWealth
