10 Steps to Starting a Small Business in Nigeria
We all have a dream of becoming financially independent. One way to do this is by starting a successful business. This is more than just having an interesting business idea or registering with the Corporate Affairs Commission.
There are several ingredients that you must bring together to start a small business in Nigeria. Just so you have a clear picture, a small business is one with less than 500 employees. In this post, we will share 10 key steps to help you start a small business in Nigeria.
Steps to help you start your small business in Nigeria
Find your idea
As they say, ideas run the world. If you ever doubted that phrase, you better start believing it now. Your business idea is the starting point for your new business. What this means is that every business starts with an idea.
It is not strange for aspiring entrepreneurs to ask the question, “What is the perfect business idea?” While it is only logical to ask this question, what should be on your mind is “how do you find the right idea?”
There is no such thing as a perfect business idea. A great idea in the UK might be crap in Nigeria and vice versa. This is an indication that business ideas are relative to location.
Fine-tuning your business idea is very important. Here’s a list of questions to help you fine-tune your idea:
a. Where does your passion lie?
b. What needs will your idea meet?
c. What will be different about your product/service?
d. Who are your likely customers?
e. Who is the competition?
f. What are your capabilities (strengths and weaknesses)?
Answering these questions will lead you to other questions you must answer to improve that idea.
Many entrepreneurs take this step for granted. Don’t ever believe that you have it all together. There is always room for more, you can always get better. Preparing yourself for your new business means you need to acquire the knowledge required to be an authority in that field.
In some cases, you’d need to get extra training, and sometimes, you need to speak to someone experienced in that business. Scouring through webpages is also a great way to learn more about your new business.
Running a business you know about in Nigeria is very difficult, let alone one that you have the least idea about. Learn all that you can to become the best you can be.
Conduct a feasibility study
This step will give you a clear picture of your business idea. You’ll get to know if the business is viable or not through a feasibility study. A feasibility study also shows you the opportunities that abound and the pitfalls you are likely to face.
There are tons of reasons why you need a feasibility study. Rather than just take mental notes, put together an actual document. In some cases, you’ll need to reach out to professionals to handle this process on your behalf. Most of all, a feasibility study gives you a broad perspective of the sector you are about to involve yourself in.
Write a detailed business plan
Even though most aspiring entrepreneurs overlook business plans, this is one of the most important documents for your business. A business plan is a document containing details about your business idea, specific goals, and a clear path to achieving these goals. It acts as the road map for your business as it helps you chart a clear course towards achieving your business goals.
In simple terms, a business plan brings your business idea to life. Statistics show that up to 85% of Nigerian SMEs run without a detailed business plan. Don’t fall into that bracket. Whether it is highly detailed or just a page, have a business plan. A business plan helps you to:
a. Run your business.
b. Attract investors.
c. Get loans from banks.
Gain more understanding about the market
Each sector has secrets to success. Finding these secrets means that you increase your chances of attaining success. Don’t remain a novice in the sector.
It is important that in understanding the market, you are not building your skills. What you are doing is understanding the market matrixes. This step helps you understand who your customers are likely to be and what they expect of you.
It also helps you know the competition and their keys to success. With this knowledge, you can figure out how to stand out and beat the competition.
Find your location
Every business has a location. It is either physical or virtual. Regardless of which applies to your business, several factors will help you guide your choice of a business location.
Among all the factors you should consider, you must consider your target market and your products or services. Each location has its challenges. Discover them and find ways to beat them.
Register the business
Building a successful business requires you to register with the appropriate authorities. Again, many SMEs in Nigeria operate without registering with the CAC. It is important that you do to unlock the amazing benefits of this process.
Your registration is based on the magnitude of the business. Click here to learn more about registering with the CAC.
Financing a business can be a headache, especially for a sole proprietor. There are several ways of finding capital for your business. Capital is the fuel upon which your business runs.
One way to raise capital for your business is personal savings and another is gifts from friends. You can also raise money through equity from investors and loans. Check out our guide to get business loans.
Grow your team
Growing your team is a very important component of your business. The kind of individuals you work with will determine how successful your business will be.
There are two ways of recruiting talent. You can either choose the best hands in that industry or find suitable hands that you can groom. Most businesses go for the second because the first is rather too costly. Find people that are self-motivated and able to learn quickly on the job.
Start the business
With all of these in place, you can start your business. Don’t rush to get it all together in one day. One step after another gives you a more solid structure, after all, Rome wasn’t built in a day. It is okay to dream big, but why dream when you can’t actualize it? Make that move now!
With these steps, actualizing your dream of owning your business shouldn’t be farfetched. Don’t let the limitations scare you. You have all that it takes to make that idea become a business and grow that business into an empire. Wishing you the best of luck from this end.