How to Start a Small Business in Nigeria
Nigeria has over a hundred and fifty universities, both government and privately owned alike, and each of these universities produces graduates on a yearly basis. It is no longer news that the jobs available are not adequate to satisfy the demand placed by the several millions of young graduates in the country. Most people have thus resorted to looking for other means of seeking a livelihood and providing for their daily needs.
One of the major ways these young graduates have taken to is starting small-scale businesses which should be enable them get a honest living. Asides the young graduates, several other people in different classes of the society are looking for a way to support their present income.
Recently Nigeria has plunged into recession, and even though news has it that the worst has been overcome, people are still feeling effects of the recession as prices of commodities which skyrocketed are yet to return to normal. As a result of this problems, the salaries that used to be enough to cater for families can barely see them through the first two weeks, not to talk of a month. People now have no option but to seek out ways to bring a balance to their financial positions and thus most have resorted to starting up petty or small businesses.
The question to answer however most times is how many of these business actually thrive and grow to become top class businesses at the end of the day? Most of these business do not get to thrive for long and others just remain on an average level for a very long time. Only a few make it to being top businesses, and with this the question that begs is what do these business owners do to make their businesses thrive? Nobody starts a business just to be an average business owner, everyone wants to become a top shot at the end of the day. This is exactly what this article seeks to answer, you have a chance to start a business and grow it to becoming a top notch business in Nigeria and even the shores of the country. This article will educate you on what steps to take in starting up a successful business and also the challenges you will face as a business owner on your way to success. The journey promises to be worth the read so please stick with me through the ride.
Here are a few steps you should take when planning to start a business from the scratch in Nigeria:
- Be ready to take risks. This is not just for the Nigerian market, it applies to starting up a business in any part of the world. You must have a heart ready to take risks if you are planning to start any business. In fact the decision to start a business is a risk on its own, every stage of a business is totally dependent on one risk or the other. So once you have your mind made up to start a business then you should take steps to prepare your heart ready for the risks you will be taking. There are several steps you should take in preparing your mind for business risks:
- Attend as many business seminars and trainings as well as workshops that you can. From these you are sure to hear other people’s experiences and learn from their mistakes also.
- Take time to study the niche of business you are planning to specialize in. you can surf the net or visit business libraries, but you must gain vast knowledge while preparing to start your own business.
- You must work on your mindset and get it ready for any failures of any of the decisions you will be making. The truth is every decision you make in business is a risk, it can be a good break for you or it could be the waterloo of your business. Thus your mind must always be ready for the worst that could happen.
- You must be as resilient as you can be. Determination is the name of the business game, despite the odds, the impending competition, the prevalent situations, you must stay strong and ready to move on regardless of what happens. Rome was not built in a day, there will always be challenges, you can be sure that if you keep on you will definitely make it.
- Put on your thinking cap and seek out a great business idea to start with. You should know that coming up with a business idea is not the easiest job in the world. But there is a set of simple guidelines which can help you in getting the idea that will help your small scale business to thrive:
- You should firstly base your idea on something that you know how to do. You really do not have time to start learn something new in a different field, it is best to look within the confines of your abilities.
- Next you should pick something that you have interest in. The bottom line is, if you do not have a flair for a field then it is not wise starting a business in that field. This is because even if you are initially motivated to start probably because of your needs, you will definitely lose interest before long. Once you lose interest, you can be sure all your efforts is going down the drain.
- Pick something that will attract stakeholders and investors. It is interesting to note that every business will require stakeholders and investors at one point or the other. This reason means that your idea should be one that will spark interests from people who are ready to invest as well as people who are ready to assist you in bearing risks. This means a lot of thought must go into your thinking process.
- The idea should not be too capital intensive. Since you have in mind to start the business from the scratch, you should think about something that would not cost you too much to start.
At this point I should state the fact that regardless of how industrious or profitable your idea may be, there is so much more to making a business work than a great idea. Asides the great ideas you need to imbibe business fundamentals which will help you see through your idea to fulfillment. More than anything, you must take time to study your chosen field intently, this will prepare for any challenges you will come across on your way to success.
- Ensure you take time to study the market. Like I said earlier, just having an appealing idea will not make you a successful entrepreneur. There are several think tanks who are yet to make a kobo from their business ideas. You will need to take time out to study the market to properly understand the metrics, ideologies and specifics of the chosen business field. Your understanding of the business niche will be a major determinant to how successful the business will turn out to be. To understand the market properly, there are questions you must be able to answer, these include;
- Who are the target customers of your new business?
- How do the target customers want to be treated?
- Who are your real competitors in the business?
- Who is the leader of the market at your point of entry?
- What are the possibilities of survival in the market?
- Write a business plan. The importance of a business plan to the existence and success of a business cannot be over emphasized. It is the map that gives direction to the business operator on where the business is headed in the nearest future. The business plan should contain the mission and vision statement of the business, the management structure of the business, the initial idea, the different stages the business owner hopes the business will achieve, the financial projections both in terms of capital to be used as well as profit to be gained, marketing strategies, etc. There are several advantages that accrue to possessing a business plan, some of them include:
- It could help attract investors for the business. No one will want to invest in a business without having full knowledge about what the business is about and whether the business has a future or not.
- It will definitely assist in getting a bank loan. Banks will want to see your business plan before giving out a loan as they will want to know how profitable the business will be.
- It will also assist in getting investment capital from friends and other loved ones.
- Getting a suitable location. The location of your business is also one of the most important factors that affect the success of any business. You should get a location that best suits the kind of business you want to indulge in. two major factors to consider when choosing a location include:
- A place that is close to the raw materials you need for your business to thrive.
- Proximity to the market where you will be selling your goods or services.
- Accessibility to customers. You customers must be able to access your business location via any means of transport that is available.
- People will never visit a place that is not secure, no one wants to lose their lives or belongings while trying to conduct a business transaction.
- A place close to a concentration your target customers.
- Get registered with the Corporate Affairs Commission. This registration ensures that your business stands out of the crowd, giving you credibility among your customers. You might not register initially but if you plan on going far with the business then you must factor this into your plans, you do not want to remain at a mediocre level for the rest of the lifespan of the business.
- Get the necessary licenses and permit. Every sector has its own approving bodies and related licenses. For you to gain the trust of your customers, it is imperative that you register with all these bodies, get accredited where necessary and get all the required certificates. You will also need these licenses to avoid unnecessary embarrassment from government agencies and other regulatory bodies.
Once all these are in place then you can set out to start up your new business, with the proper measures set in place, you can be sure of outstanding success in your business.
Challenges that face new small-scale businesses
It is no new knowledge that every business has its own challenges, however considering the economic climate of Nigeria, below is a list of challenges that generally affect new small-scale businesses in Nigeria:
- Scarcity of viable business locations. Most of the choice locations to site businesses in different parts of the country are quite expensive to acquire or they have already been acquired. This puts the new business owner at a serious disadvantage as they are left with choosing from places that do not really suit their businesses.
- Difficulty in raising capital. The economic situation of the country has made raising capital especially for young graduates who are just starting out extremely difficult. Without a strong capital outlay most of these businesses are bound to collapse within a very short period of time.
- Poor feasibility study. Most of the business owners do not take extensive time to study the existing market before diving in to begin operations. This causes them to lose a lot due to lack of experience and adequate information. As result of this most of these businesses pack up before they even begin to make hay.
In conclusion, starting a new business is not rocket science and it is not something you should be scared of engaging in. once you follow the stated guidelines, you can be sure that before long you will hit gold.
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