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. 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. I will suggest you read the article below to further understand the need to prepare yourself.
The Cost and Challenges of Doing Business in Nigeria
Preparation is one of the reasons why most youths apprentice under the watchful eyes of an established entrepreneur for years before breaking out on their own. 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. 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 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
Starting a Business: It Takes More than Just an Idea
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 your Feasibility
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 relation said the line is profitable. I have seen people jump in to 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.
Now how do you conduct feasibility study on a business opportunity? I can’t answer this question in detail here but I have provided all the answers in the articles below.
4. Understand your Market
Before jumping into any business or industry; make sure you have thorough understanding about its fundamental metrics. Every business line has a secret and if you must succeed; you must find it. Understand the market of the line you are going into.
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 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, since 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 one. 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 and commerce 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. 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.
8. 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.
9. 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 but don’t give up. Stay strong and fight it through.