This comprehensive article on Starting A Business In Nigeria will help everyone both a foreigner and those residing in Nigeri to set up a profitable business. The mindset of every entrepreneur is to make profit from their business, find fulfilment from it and earn a respectable income. Due to some factors affecting the Nigeria economy, businesses finds it difficult to strive. Starting a business in The country is not a child’s play, if you most do business and succeed in Nigeria, you most come prepared.
Here are the steps you should take when Starting A Business In Nigeria.
Choose A Business Idea
You don’t just jump into any business that comes to your mind. If you most start a profitable business and succeed in Nigeria, you need to carry out a proper research by choosing a business idea that has the potential to do well. When choosing a business idea, it is advised that, you study the market very well. while studying the market,look out for a pressing need in a location and then profer a solution.This solution could be in the form of products or services.
Here are some proven steps to choosing a great business idea:
Evaluate Your Skills, Experience And Passion
Before choosing any business idea,it is of great importance for you to evaluate yourself. You should go for a business you have passion for. Something you would enjoy doing. Moreso, your experience in a particular field wouldn’t be bad for you to turn it into business ideal.
Take A Look At Your Environment
Look around your environment, you most see somthing that people need You most see one or two problems that needs solution. Seize the opportunity by providing a solution to that problem. Ensure that, it is something that people will patronise come what may. Entrepreneurs make money while they Carter for people’s want.
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Tap Into Your Own Experiences
Most entrepreneurs, set up there own businesses based on their previous work experience.for example, if you have worked as a client support officer in a micro finance Bank, it will be easy for you to go into money lending business. With the wealth of experience you most have gathered in your previous firm,you can use it to build your own.
Generate Some Ideas
Now it is not enough to conceptualise an idea, bringing it to reality is what matters most.one of the steps to doing that is by you writing down a list of all the ideas you have in mind. Writing them down is one Step taken to bringing it to reality. Ask questions, consult family and friends and write down their own ideas too.
Select The Best Idea
Having written all the business ideas down, the next thing to do is to select the best ideas to run with. By doing so you will need to consider, profitability, viability, proximity to source of raw materials if need be, passion, and other factors. Moreso,you should also consider your knowledge about the business.Remember that, entrepreneurs don’t just plunge into business with out having an idea of what the business is all about. After putting all these and more into consideration,you should be able to part with one idea at the end of the day.
Research Your Idea
Now that you have selected the best business idea, it is now time for you to carry out your research. Test your business and find out how viable it is, by researching your business idea,you will know where best to make changes and also stand out amongst competitors.
Test Your Idea
Finally, you have to test your business idea. This is to ensure that, you are really choosing the right business idea. Take a walk around your your community speak with your prospective clients.
Conduct Market Research
If you want your business to strive in Nigeria, make sure you Carry out your research. Proper research will enable you understand the challenges and opportunities in market place.
Below are some questions you should seek to answer with your market research:
1) Who are my potential customers?
2) How large is my target market?
What are my customers’ shopping and buying habits?
3) Who is my competition?
4) How much are potential customers willing to pay?
What are my competitors’ strengths and weaknesses? (A SWOT analysis will help here)
5) How can I take advantage of my competitor’s weaknesses?
Now, if you are able to answer these questions well, It will help give you important information on how to position your new business for success as you enter the market. Also, the market research will help you reconfirm if your business idea is worth pursuing or not.
Create A Business Plan
The need for a business plan in starting a new business can not be over emphasized. A business plan is a document that details the financial and operational objectives of a business. It reveals the mission and vision of a business, who the the business plan to sell to, it’s unique selling point.The business plan is actually a simple tool to achieve and manage business growth. It is used to define business strategy, goals, deadlines, budget, etc.
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Determine The Purpose Of The Business Plan
You have to decide,whether the plan is to be used internally, by third parties, etc. It will help in determining what sort of information to concentrate on. before starting the business plan preparation.It’s important that you determine what sections of the business plan are relevant to your business
You do not need to stress yourself if you can not prepare your business plan. look for a professional to help you out. Meanwhile, you will need to go through the plan thoroughly, in orther to grasp everything written in it, because it is important that you understand the contents of your business plan and can defend it.
Take Note Of Actual And Estimated Figures
When you are starting a business, ensure you use proper figures in other not to mislead investors. If you are already running your business, you should have actual figures.
Write The Executive Summary Last
This should be as short as possible. since a page summary filled with important information is enough.
Narrow Down What Makes You Different
This is very important in business. Before writing a business plan, you have to think carefully about what makes your business unique. state what makes your products or services Different from others in your area.
Keep The Business Plan Short And Format For Easy Skimming
Your business plan should be short and more concise.Don’t include all the results of your market research, Keep these details elsewhere for your own use or in the appendix. Formatting is important, please use headers, bullets, and italics to highlight key information for the readers.
You Can And Should Change It As You Go
The business plan should be updated as situations change and as required for particular uses.
Decide On Business Legal Structure
It is very important to choose the right legal structure for your business especially in Nigeria. Most business owners, has made this mistake of registering their business under the wrong legal structure and when you do that, it sometimes means that there are some types and volumes of businesses that you cannot do.There are factors you have to consider before you choose a business structure.
Here are the popular business legal structures that you can choose from in Nigeria:
A Business Name which most refers to as an enterprise or venture is for a sole proprietor or two people who are trying to form a partnership. It is simple to register and you can register yourself online on the CAC platform.
Limited Liability Company
A Limited Liability Company can either be a Private Limited Liability Company or a Public Limited Liability Company. Public limited in the sense that the membership is unlimited. The core feature of a Limited Liability Company is the share capital divisions and directors who make decisions.
Incorporated Trustees/Company Limited by Guarantee
These two falls under what we call Non-Governmental Organization. They are more expensive to register. Because they are social enterprises, they have access to funds especially from international bodies that are interested in corporate social responsibility in Nigeria. They do not pay company income tax. There is no profit sharing; Revenue generated is put back into the organisation. Registering a company limited by guarantee requires the authority of the Attorney General of the federation.
Trademark is simply protecting your name, brand, logo, etc. against theft from competitors, friends, colleagues, etc. When you trademark your brand, you can sue anyone who uses it without your permission.
There are about 45 different classes of Trademark, so find the one that suits your kind of business and trademark it under that class.
Choose A Business Name
There is need for you to choose a business name. As long as you are sure about the legal structure that you will be adopting. Choosing a business name is very important to the process of starting a business in Nigeria. Whit out a business name, you can not conduct a business in the country. You need a business name to open an account and receive payments from customers.
To choose the best business name, it is advised you review why you want to start the business, what it is to be known for, the visions, mission, and selling proposition for it. You should also put into consideration the industry you are in and ensure you are personally happy with the final choice. This is important because your business has to live with the name for a long time. It should be a unique unforgettable name.
[ Here are some tips when choosing a business name:
Choose a name that can stand the test of time
Be descriptive but not too general or vague
Make sure you keep it simple.
Don’t copy your competitors
Avoid using your own name
Make sure you have a related domain
Register Your Business
Business registration is very important to running your business in Nigeria. You are required to register you business before you can operate.
The commission in charge of business registrations in Nigeria is the Corporate Affairs Commission (CAC). You as well, do your business registrations on your own, but,it is advisable that you seek the help of professionals to do the business registration so that you do not commit costly errors.
Apply For Licenses And Permits
There are some businesses in Nigeria that needs licence and permit before you can operate them. Obviously, the first license you need is the business registration certificate, but you might be required to apply for some permits before operating depending on the type of business.
Here are some businesses that you need a permit for in Nigeria:
Oil and gas companies
Freight forwarding companies
Security guard companies
Waste management companies
Power and electricity companies
Open A Business Bank Account
Opening a bank account is very important to running a successful business in Nigeria. It is important because you need it to receive payments and conduct business in Nigeria. To open a business account in Nigeria, you will need to have registered a business name and also have a tax identification number in some cases.
With your business registered, you will be able to open a company account and start transactions immediately. Well, that depends on the legal structure you choose for your business, you might need to obtain a tax identification number after registering your business before opening an account.
Just make sure that you understand the requirements to open a company account in your country and state before proceeding to open the account.
Build Your Team
To start a profitable business in Nigeria you need a strong team. A team who shares the same vision with You. People you can trust your business with.you need people you can trust to get the job done.your team should be able to transform your idea into reality.In the beginning, it is important that you only hire the people that you really need to build your small business startup.
Grow Your Business
Now with your formidable and vibrant team, you can now go ahead to growing your business. You will need to market and promote your business. One of the ways you can actually grow your business is by using social media, we all know how powerful social media is,you can use it to your own advantage. Additionally, you can use search engine optimization and even public relations to grow your business.
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Starting A Business In Nigeria is not easy although due to the country’s present economy. However, if you follow the guidelines detailed in this post, you will be well on your way to starting an amazing business in Nigeria.