So, you want to start a small business in Nigeria – A company!
Starting a successful business in Nigeria isn’t as difficult as you might think. There are plenty of opportunities out there for people who are willing to work hard. If you’re looking to start a business in Nigeria, then you should consider reading through this article first.
As a practising serial entrepreneur and business owner in Nigeria, I know what it takes to go around operating a small business, especially in a country like Nigeria, where almost everything works anti-clockwise.
Surprisingly, most first-time business owners, traders and intending entrepreneurs have one major setback: not knowing the best ideas to invest in.
Your chances of success or failure in business depend on the market need that your product or service is trying to solve; the market target (demographics and economic power of that market segment), and your ability to Forecast Revenue and Position a Company for Growth.
So for an entrepreneur to start a business, he or she must have the ability to identify opportunities where others feel discomfort. It must be stated that though entrepreneurship always seems a better way to financial success, there is no much of a guarantee of success.
So, to improve your chances of success as a Nigerian entrepreneur, there are proven steps that successful entrepreneurs have taken, steps we believe would improve your chances in entrepreneurship in Nigeria.
Below is a list of steps any aspiring entrepreneur must take to start a lucrative business. These steps were arrived at from careful research, interviewing more than 50 successful Nigerian entrepreneurs.
Understand yourself
Scout for opportunities
Develop the big idea
Conduct market research
Write a business plan
Get expert feedback on your business plan
Get legal covering – Register your company
Open a bank account
Setup a simple bookkeeping and accounting system
Seek funding for your business
Build a strong team behind your business
Grow the business
Factors that affect how to start a business in Nigeria
Conclusion
Consider reading this high ranking article if you want to learn how to start a drop shipping business for the Nigerian Market and more – Click here.
Unfortunately, Nigerians are not “angels”, it is extremely difficult to ask a Nigerian, most of whom struggle with their individual finances, to give angel funding to a business.
How to guide – A step by step guide towards how to effectively start and run a successful business.
Total Time:
Understand yourself
The ability to understand yourself as an entrepreneur is one of the very essential attributes entrepreneurs must have to be successful.
Understanding yourself has a lot to do with why you would want to become an entrepreneur and not sit behind a desk working a nine to five job. Read more on understanding entrepreneurs here.
You need to also understand why you intend to start a business: Are you seeking freedom from the stress of having to work for someone and have more control of your time, or are you trying to make more money and believe that you would be more successful as an entrepreneur?
Scout for opportunities
Opportunity discovery or otherwise known as entrepreneurial discovery – has been defined by many thought leaders as the process of systematically scanning for changes in technology, social, demography, the political and regulatory landscape of a people or place to come up with new products, goods, services or service delivery methods.
As an entrepreneur, you must develop the capability to sniff out opportunities where other none trained eyes may see despair and frustrations. Remember, without pain, there are no entrepreneurial opportunities
Develop the big idea
I cannot stress this enough – At the very heart of a business, is the idea it is anchored on. Once you identify opportunities, the next thing is to develop an idea to seize the opportunities discovered.
Fortunately, like opportunity discovery, idea generation also has a process to it. There are lots of documented articles on developing ideas, please take your time to read up on the one I feel suits Nigeria the most here.
Conduct market research
Most entrepreneurs take the leap from having an idea to set up a business without seeing the need to go through the steps highlighted here. A majority even go-ahead to hire experts to write their business plans without first taking the time to conduct market research.
Please do note that it is imperative to carry out market research before going forward to writing your business plan. Failure to conduct market research could be likened to building a hostel in the Sahara desert simply because you heard once you build it they would come.
Yes, you may see a couple of guests from time to time, but a carefully conducted market research would save you from unnecessary surprises.
Luckily, separate market research is needed and should be conducted for different stages of a business life cycle. The need for pre-launch market research differs from market researches needed to grow from one business stage to the other.
Read up on the 5 stages of business growth by HBR here
Write a business plan
I bet that you must have heard the saying: failure to plan is planning to fail. So, we are always planning to do something either consciously or otherwise.
In starting a new business, you must make deliberate efforts at planning and documenting how you want to see your business thrive; you must detail every thought you have given to the process, your goals, marketing, financials, etc.
According to Investopedia, a business plan is a written document that describes in detail how a business—usually a new one—is going to achieve its goals. A business plan lays out a written plan from a marketing, financial and operational viewpoint.
The main usefulness of a business plan to a startup is that it helps you see a helicopter view of your company and how it is positioned.
Major component sections of a business plan, according to Sequoia capitals, are: Company purpose Start here: define your company in a single declarative This is harder than it looks. It’s easy to get caught up listing features instead of communicating your mission.
Problem Definition: Describe the pain of your customer, how this pain is addressed today and what the shortcomings to current solutions are.
Solution: Explain your eureka moment. Why is your value prop unique and compelling? Why will it endure? And where does it go from here?
Why now? The best companies almost always have a clear why now? Nature hates a vacuum—so why hasn’t your solution been built before now?
Market potential: Identify your customers and your market. Some of the best companies invent their own markets.
Competition/alternatives: Who are your direct and indirect competitors? Show that you have a plan to win.
Business model: How do you intend to thrive?
Team: Tell the story of your founders and key team members.
Financials: If you have any, please include it.
Vision: If all goes well, what will you have built, in five years?
Get expert feedback on your business plan
It is always a very laudable idea to write your own business plan as an entrepreneur and give it out to a business plan writing service for expert review and possibly a rewrite. What this would avail you is a view of all the processes and stages your business must follow to attain your desired objectives.
No business expert would be able to read your mind and write your plan the way you have envisioned it, and writing it yourself would also keep you abreast of most of the nitty-gritty and challenges you may encounter at different stages of your business.
Get legal covering – Register your company
Yes, register your company. Avoid using a business name to start and run a successful business unless of course that you are testing the waters.
Setup a simple book-keeping, Invoicing, and accounting system
To an untrained eye, Accounting and Bookkeeping may appear similar, they are however different, though they overlap at various functions.
Bookkeeping involves the day-to-day entry of all financial transactions entered into by a small business or company, while Accounting is the high-level interpretation of records, viz classification, analyzing, and reporting of transactions.
In business, especially as a startup, you need a system for tracking all financial transactions and records. Not only is it a requirement for reporting finance, but it is also a means of projecting and reporting the overall position of a company’s performance.
For ease of accounting, I would recommend some products that take care of your accounting from invoicing down to inventory control. Such software include the likes of Sage, Invoice.ng, etc.
It is always in the interest of a startup to hire a professional to set up a proper system that fits into the operations of the company.
Seek funding for your business
Bootstrapping is always the first choice for startup funding for most entrepreneurs.
However, though this typically comes as a natural instinct for most entrepreneurs due to the simple fact that there is always the need to validate their own business ideas before asking someone else for funding, there are many other legitimate sources of funding out here in Nigeria.
Family and friends Government institutions Government grants Local Venture capital firms International venture capital firms
Build a strong team behind your business
A major error most entrepreneurs make is that because they are very good technically, they assume they are also good at running businesses. Unfortunately, most entrepreneurs going into business do so because they mastered the technical aspects of the business they intend going into.
The author of the E-Myth, Michael E. Gerber writes that most entrepreneurs make a fatal assumption, that is: “if you understand the technical work of a business, you understand a business that does that technical work.”
As a fresh entrepreneur, you would definitely lack a lot of skills with most of those skills essential to the successful running of your business.
Create a team around your weaknesses, try to get people better than you and pay them well. If you cannot afford to build a team immediately, try and start from the most essential skills and gradually build your way up.
Business success is more about the team than the idea. The stronger your team, the more capabilities you have at executive your business tasks and achieving your set goals.
Grow your business
Yes, ideas without proper execution When it comes to starting a business, not all business ideas are worth starting at all. Ensure that you carry out a feasibility study and follow the report generated to know the kind of business – Product or service that best suite your target market.
The best business ideas are unique, practical, needed by the market and easy to scale. In the search for a business idea, start by looking at what problems exist in your environment and try to provide a solution to such a problem and monetize it.
And if your business idea is completely new, think of what your business can offer and focus on how to create something better and cheaper.
You may need to ask questions from people, make your own research and as well seek advice from entrepreneurs.
Understand Factors That Affect Businesses
Businesses succeed faster within a functional ecosystem – this is a known fact. Researchers have carried out several pieces of research with the hope of pinpointing the success sauce that any entrepreneur or business owner can key into and have a fairly great chance at business success.
Fortunately, these researchers all agree on the same outcomes; to be a successful entrepreneur, 3 factors usually come to play. These factors are resources that shape the entire business landscape, regardless of geographical location and the type of business.
Access to markets, the supply of human capital, and access to funding have been identified as the foremost resources cum success factors common with every successful business. It is important that you locate your office or operational base close to either your raw materials, resources or market.
This article takes a look at these factors with a view to understanding how they affect the micro and small business concerns in Nigeria. Understanding how these resources affect the growth of micro and small businesses may help a budding entrepreneur better understand the business landscape and better design her business structures.
1. Access To Markets: This is rather a very controversial piece; Nigeria has a population of about 180 million people, with about 30% of these people as prospective markets regardless of the type of business ventured.
It, therefore, means that regardless of the type of business ventured into, the minimum possible market size being shared by all players within that market nation-wide is a minimum of 54 million possible clients – That is huge!
This, therefore, means that Nigeria is a viable market considering the market size and disregarding other determining factors. This finding, therefore, begs for the answer to the question of why Nigerian businesses would rather look to satisfying the foreign markets over their local markets.
2. Human Capital Development: Unfortunately, the educational system of this great country has been neglected by subsequent governments since the late ’80s.
The university system still finds it fashionable to take her under-graduates through seemingly obsolete programs and curricular, making their products unsuitable for market demands in terms of skills.
The backlash to this is that Nigeria is not well equipped to play competitively in the global market due to her skills and know-how deficiencies. Manpower is very critical in controlling product value, viz quality, and pricing due to costs associated with skills and labour.
With the scarcity of manpower, the available few that have sought ways of developing themselves mostly outside the current educational system are mostly absorbed by multinationals, and other high net-worth companies all competing within the same market as the micro and small enterprises. Only a few end up as entrepreneurs.
3. Access To Funding: This is one major issue plaguing Nigerian businesses. Raising capital for business in Nigeria is not an easy task. In several pieces of research conducted, angel investment and venture capital were the two sources of funding selected as most important for companies’ growth.
Unfortunately, Nigerians are not “angels”, it is extremely difficult to ask a Nigerian, most of whom struggle with their individual finances, to give angel funding to a business.
Only a few venture capital firms from outside the country invest in Nigeria, and unfortunately, the prevailing bank lending rate of over 25% makes it near impossible to do business with.
Conclusion
So, to start and run a successful, an entrepreneur must first seek ways to circumnavigate the identified issues; the government and other high-growth companies should help to find ways to increase entrepreneurs’ access to the identified resources.
To make one available without the other will not make any impact; the three factors must be dealt with and managed properly prior to starting a business.
Fortunately, with the establishments of companies like Experts.ng the shortage of skills can be easily taken care of through the access to verified experts willing to carry out micro-consulting tasks for a fraction of their normal charges outside the experts.ng platform.
With the right skills taken care of, the Nigeria market is resilient enough to deal with possible shock from lack of funding, due to the size of the available market.
Just like Jack Ma’s Alibaba, the Nigerian entrepreneur must, therefore, find ways to create a chain of resources and partners readily available to form the much-needed ecosystem, even if it is virtual.
The best business ideas are unique, practical, needed by the market and easy to scale. In the search for a business idea, start by looking at what problems exist in your environment and try to provide a solution to such a problem and monetize it
Bookkeeping is the process of recording and coordinating a business’s financial transactions. Therefore, bookkeepers record transactions, process payments, send invoices, manages accounts, and prepares financial statements.
Though Bookkeeping and accounting are similar, bookkeeping forms the basis of the accounting process.
Approximately
40% of small business owners believe bookkeeping and tax preparations are the tasking
parts of building a business, 47% say they are against the financial cost, and
8% don’t enjoy all the paperwork.
Why Bookkeeping is crucial to
Small Businesses in Nigeria
Bookkeeping
is critical to the sustainability and success of any small business. Because
you still need to have a perfect picture of all the financial inputs and outputs
of your business. Understanding the state of your business’s finances helps you
to make accurate financial decisions and plan for the future.
Bookkeeping
also enables you to safeguard your business. For instance, your business is
involved in a dispute with a vendor or under audit by the government. Without a
comprehensive financial record system, you may find yourself at risk of paying
settlements or tax penalties for unnecessary financial errors. It helps you to
prevent or uncover fraud and discrepancies from vendors, customers or
employees.
Bookkeeping
also saves you time as it simplifies your business financial processes from payroll
taxes, managing invoices; it saves you the stress of tracking down all your
expenses amongst others.
An
efficient bookkeeping system makes information easy to find, because it places
everything in perfect order, making your information search stress-free rather
than staying up for hours to find a particular document. This is one of the best
features of a great business bookkeeping system; it makes it easier to find
useful numbers automatically.
With
bookkeeping, your vital information is secure. You don’t have to worry about
losing information because you have a backup of everything.
Tips for Effective Management of
Bookkeeping Process
How
do you turn Bookkeeping into a new habit? Habits are loops with three parts –
Cue, Routine and Reward
Cue
– Delegate an hour weekly to your business finances. Scheduling an hour per week
in advance will help you in creating a weekly habit. Choose an hour in your
diary when you will be available and block that time off. Then set reminders to
help you stay on track with the agenda and stick to it!
Routine:
Map out the activities you plan to undertake within the allotted time weekly.
The most effective way to work on it is to create a checklist.
Reward:
As a business owner, you will learn something new about your business by paying
attention to your books. There is a wealth of knowledge to gain by spending
regular time on your bookkeeping business. It will also make you more
proactive, for example, when was the last time you reviewed your expenditure
for Q3?
Basic
steps to small business bookkeeping
Create and manage accounts
Record every financial
transaction
Balance the books and prepare
financial statements
Create and manage accounts
The
striking difference between personal budgeting and business bookkeeping is in
the managing of accounts. A bookkeeping account doesn’t imply an individual
bank account. It is an account that records all financial transactions of a
particular activity – production or sale.
Each
account falls under one of these five types:
Assets – These are a total of cash
and resources owned by the business.
Liabilities – These are obligations
and debts owed by the business.
Revenues or income – This is money
earned by the business, often through sales of products or services.
Expenses or expenditures – This
is cash that flows out from the business to pay for some item or service.
Equity – This is the residual value
remaining after liabilities have been deducted from assets. It represents the
owner’s held interest in the business.
How to create Bookkeeping
Accounts
Traditionally,
business accounts were recorded in a physical book called the ledger. Today,
the practice has evolved with technological advancement. Most businesses use
computer software to record accounts, but the file is still referred to as the
ledger. There are three methods for creating a ledger:
Spreadsheet software – Excel
Desktop accounting software –
QuickBooks Desktop
Cloud-based software – Xero
Meanwhile,
there are companies you can pay to manage your business accounts and ledgers.
These companies are known as outsourced accounting service providers or virtual
accounting service providers because they manage your bookkeeping for you.
Some
companies that offer bookkeeping services in Nigeria include AccountingHub,
PML, Audeo, Pundit Bookkeeping services, Your Accountant, amongst others.
Record all financial transaction
Document
all your transactions to know what is happening with your money. Most
bookkeeping is done using the double-entry accounting system, which is similar
to Newton’s Third Law of Motion, but for finances. Newton’s law states, “For
every action, there is an equal and opposite reaction.”
In
double-entry accounting, any transaction in one account requires an equal and
opposite entry in another account. The single-entry system is another option
for small business bookkeeping, but it is not usually recommended unless you
run a small business with little financial activity. Single-entry bookkeeping
is simpler and faster compared to dual-entry, but it provides only a limited
picture of your business’s finances, thereby making it challenging to produce
important financial documents, such as balance sheets.
In
the double-entry bookkeeping system, there are two entries for each transaction
– Debit (Dr) and a Credit (Cr).
Debits
and credits are documented as journal entries in the ledger. The Debit is
usually recorded first (on the left), followed by the Credit (on the right).
To
record a transaction, first determine the accounts that will be debited and
credited. For example, you purchased a new point-of-sale system (POS) at N20,
000, for your retail business. You paid N20, 000 for the POS system in cash.
The
transaction will affect two accounts: cash (Asset account) and equipment (Asset
account). Because you’re decreasing your cash and increasing your equipment,
you would document a N20,000 debit (on the left) in the equipment account and a
N20,000 credit for the cash account (on the right).
It
is important to note that journal entries don’t include specific details about
the item, or vendor, you simply track debits and credits by account.
Balance the books and prepare
Financial Statements
The
final step in bookkeeping is to balance and close the books. When you tally up
account debits and credits, usually at the end of the quarter or year—the total
figure should match. This is what it implies by your books are “balanced.”
Creating
financial reports is a vital task of the bookkeeping process, and it is key to
every business. Summing up the flows of money in each account creates a picture
of the financial health of the company that business owners need to make
decisions about the future.
Below are some financial reports
created in Bookkeeping:
Balance sheet:
This document summarises your business’s assets, liabilities, and equity at a
single period. Your total assets should equal the sum of all liabilities and
equity accounts. The balance sheet provides a look at the current health of
your business and whether it can expand or needs to reserve cash.
Profit and loss (P&L)
statement: This report is also called the income statement.
It breaks down business revenues, costs, and expenses over a period of time
(e.g., quarter). The P&L helps you compare your sales and expenses and make
forecasts.
Cash flow statement:
This statement is similar to the P&L, but it doesn’t include any non-cash
items such as depreciation. Cash flow statements show where your business is
earning and spending money and its immediate viability and ability to pay its
bills.
Bookkeeping
software helps you prepare these financial reports—many in real-time. This can
be a lifeline for small-business owners who need to make quick financial
decisions based on the immediate health of their business. Read below for more
details about getting help with your bookkeeping by using accounting software.
Schedule Bookkeeping and Secure your
Records
Design
a schedule for your bookkeeping activities, at least weekly or twice a month for
recording all financial transactions, including invoices, sales, and purchases
amongst others. Also, ensure to close your books regularly, this can be carried
out every month or quarterly. It is best to work on your books when your mind
is still fresh – often, at the start of the day rather than when the day’s work
is over. With appropriate bookkeeping for small businesses, it’s easier for you
to be compliant with the law. It saves you time from chasing down past missing
invoices, and you don’t want to have misappropriation issues.
Open a Business Account
Opening
a business account cannot be overemphasised; it helps you to separate your
business money from your personal funds. Operating different bank accounts
keeps records accurate and make it easier for audit when its tax time. As a
small business owner, if you can afford to hire an accountant to manage your
taxes, then consider it. If your personal funds is mixed with the business’s
money, it will be hard to report errors, if there are any.
File Documents Appropriately
Filing
is a crucial part of the bookkeeping process, from transactions to receipts,
invoices, and records. Record management is an integral part of running a
successful business. File your documents right away to ensure that everything
is in order.
For
example, start a daily routine of recording bills, expenses, and other
financial transactions. By doing this, you can track your expenses and profits
effectively. Efficient record-keeping ensures that vital documents and records
are up to date.
Do I
need extra bookkeeping help?
As
a small-business owner, you will probably do everything by yourself, especially
creating the product or service that your targeted market needs. Depending on
the overwhelming demands of the business, you may consider getting extra help
with your bookkeeping because bookkeeping mistakes can be costly and affect the
growth and success of the business.
For
example, have you ever looked at your bank statements and wondered how much
profit your business generates for the month? Then, it’s time to get help with
bookkeeping.
As
a small-business owner, there are some cost-effective bookkeeping solutions to
consider, such as hiring an in-house accountant and also investing in accounting
software.
Outsourcing
your bookkeeping to a third-party company – managing both in-house and
outsourced bookkeepers can be quite expensive. Outsourcing to a third party is
a cheaper alternative that small business owners can try. An example of a third-party
accounting firm in Nigeria is AccountingHub. The firm is recognised as
Nigeria’s small business accountant; it offers online and retail shop
accounting services. It strives to connect small business owners with trusted
accounting and tax professionals.
If you need a cheaper solution, though,
bookkeeping software takes care of the basics without foisting too much manual
work on you: they reconcile bank transactions, adjust account balances, and
generate financial statements.
Review your Bookkeeping System
regularly
For
newbie business owners, you can start with a simple spreadsheet to manage your
records. However, as the company evolves, it is crucial to consider advanced
methods and systems. As the business continues rising, it is important to
reassess your current system. Evaluate the volume of time you spend on managing
the books. Also, review your bookkeeping system to know if it is cost-effective
and how much it costs your business. When you do this assessment regularly, you
can decide to transit from one system to another.
With
the right bookkeeping solutions, you are investing more time and resources in
the business itself and not the bookkeeping process. In the long term, this
will enable you to save money, time, and effort. And you even have more time to
develop new ways of boosting your sales and business.
Whether
you manage the bookkeeping process of your small-business yourself or get help
from an expert, having a clear understanding of the basics will help you manage
your finances better. It will save you time chasing receipts, protect the
business from costly errors, and gain valuable insights into your company’s
potential.
The capability of forecasting revenue and positioning a company for growth is a skill needed by every experienced business support consultant and management guru. A startup team might likely suffer if it lacks the ability to be able to forecast the likely profitability and financial position of a planned company or business.
Though a very overwhelming task, proper business planning with a well-thought-through financial forecast is required to validate a business especially if you desire to seek funding from venture capitalists.
A lot of entrepreneurs actually avoid the aspect of forecasting in their business plans; they do not take the time to execute it. The problem, however, is that only a handful of investors will put their money in a business without some degree of accuracy and thoughtfulness in the aspect of the financial forecast.
Business forecasting is a way of predicting the future in terms of economic conditions. It mixes information gathered from past events with a precise picture of the present economy to predict future conditions and strategically chat the pathway for business growth.
There are different methods of business forecasting but they all fall into two broad categories – Qualitative and Quantitative, forecasting.
Qualitative Forecasting
Qualitative method of business forecasting is useful in predicting the short-term success of products, services, and organizations; however, its dependence on opinion over measurable data makes it a limited option.
Qualitative forecasting is often built on the opinions and decisions of consumers and experts. This business forecasting method is beneficial if you do not have enough historical data to reach statistically significant conclusions. In such scenarios, an expert may be required to string together the known bits of data you have and try to make a qualitative prediction from the available information.
Qualitative business forecasting is also constructive for cases when there is little information about the future of the company or its business. Focusing on past data is ineffective if that data is not relevant to the unexplored future you are targeting. This can be the scenario in several industries that are fast innovating today, especially the tech companies.
A classic example of a qualitative method is market research. Market Research involves the use of search engines to get information or simply polling a high number of people on a specific type of product or service to predict revenue growth and determine growth rate from the number of respondents that signified they would buy or use it once launched.
This process helps in determining the viability of a new service or product through research conducted directly with potential customers. Market research enables a company to discover their target user base and get feedback from the target market regarding their interest in the product or service.
Quantitative Forecasting
Quantitative forecasting strives to connect different variables to establish the cause and effect of certain issues that can further be maximized to the benefit of the business. Quantitative business forecasting is applicable when there is precise historical data available to predict the probability of future events.
This method draws patterns from the data that lead to increased probable outcomes. The data deployed in quantitative business forecasting comes from business case studies and includes customer acquisition rate, customer lifetime value, product sales numbers, census statistics, conversion rates, profit margins, market share, amongst others. This method is concerned mainly with data, and it tries to predict where variables such as GDP, cost of food, housing prices will be in the long-term, it can either be measured in a week, months or years.
Sources of Data for Forecasting
1. Primary sources
Primary sources of data are time intensive because it takes a longer time to gather because they are first-hand information. Also, they are considered more reliable and trustworthy. It is the analyst or the person forecasting the business that collects the data, through interviews, questionnaires, focus groups and also analyses the data.
2. Secondary sources
Secondary sources of data do not require the same time and effort with primary data because they have already been collected and published by other organizations. They are functional and adaptable because they have already been compiled and analyzed, thus making the process faster.
Develop an estimate of Future Business Operations: Before starting any business forecasting, it is critical to creating a projection for future conditions, such as the sequence that future events will probably follow in the industry. Your projections will be based on collected data to help with quantitative estimates for the scale of operations in the future.
Regulate Forecasts: Your forecast must be compared to actual results; regulating your forecast cannot be overemphasized. This is the primary way to finding outliers and deviations from the norm. Then the deductions for those deviations have to be figured out, so action can be taken to correct these disparities in the future.
Review Forecasting Process: Improvements can be made when the deviations between forecasts and actual performance data are reviewed as this process enables you to analyze and refine and the information for accuracy.
Steps in Business Forecasting Process
1. A problem or data point is selected: For example, “Will women in Oshodi buy dish-washing machines?” “What will our sales be in July next year?”
Theoretical variables and an ideal data set are selected: The relevant variables that need to be considered by the business analyst are identified and also the approach to collecting the data. Assumption time: The analyst makes some open assumptions to simplify the process. To cut down the time and data needed to make a forecast, a model is selected. The analyst chooses the model that fits the data set, selected variables, and assumptions. Analysis: Using the model, the data is analyzed and a forecast drawn from the study. Verification: The analyst compares the forecast to the actual event in order to tweak the process, identify problems or in the rare case of an accurate projection, pat himself on the back.
Benefits of Forecasting
Predicting the Future
Forecasting may not provide direct information on what will exactly happen in the market and the company over the pending years, but it gives a general idea. Business forecasting offers you a sense of direction, which will enable the company to maximize the marketplace fully. Predicting the future in the construction industry can be a daunting task. But taking this step, a construction can predict future trends and then change their company objectives to achieve increased earnings.
Customer Retention
To ensure the sustained satisfaction of your customers, it is crucial to provide them with the products/services they want when it is wanted. Forecasting in business is greatly beneficial because it helps to predict product demand so that products are available and sufficient to fulfill customer orders. By deploying business forecasting to look ahead, FMCG companies can stay ahead of the competition and make sure they always have products readily available for purchase.
Learning From the Past to Look Ahead
Studying events in the past and the way they occurred will help companies predict what will happen in the future. Business forecasting has the potential to make the company stronger and more profitable. FMCG companies observe past trends and sales and employ the data gathered to predict the future. Forecasting on a steady basis enables companies to consider their future and where their company is going over a specified period. This will also help them to foresee changing market trends and keep up with the competition.
Receive Financing and Remain Competitive
Businesses that do not employ forecasting techniques will likely fall victim to their competitors within a short space of time. Having a broad idea of the level of performance to expect over time is critical, as it will enable the company plan to meet customer demand; otherwise, the company may lose customers because they will turn elsewhere to fulfil their needs.
The FCMG industry is highly competitive. More than a thousand different companies are competing for the same shelf space, and trying to attract new customers with costly advertising campaigns and labels can be an expensive venture. This is why whenever a company gets a new customer, they try everything in their power to keep them.
A forecast is required when startups are seeking funding for their new or existing business; in many cases, the financing institution will request an estimate on the volume of sales you will have within a given time-frame before considering giving you such loan, especially when it involves large sums of money.
Reduce Inventory Cost and Prepares for a Drop in Sales
With forecasting, business owners can predict how much inventory should be available at any given time. Knowledge of your stock will help your company to save cost on warehousing and transportation. It will also reduce the risk of accruing ridiculous fees or leading to discounted products because there is a surplus of goods.
Having the right volume of inventory is vital for every business because some products have a short shelf-life; for this reason, it is essential to ensure there is no surplus of product. Another advantage of forecasting is that it helps entrepreneurs to know when there is a fall in sales. When a company predicts that there will be a drop in sales, the rate of production will slow down. This then implies having limited products in the warehouse and also decreased finished goods inventory available at different stores and distribution outlets.
Positioning your company for growth in today’s world is cannot be overemphasized, considering the rate at which technology is fast changing the modus operandi of businesses.
“The biggest mistake a retailer can make today is to project the past into the future,” says Dan O’Connor, RetailNet Group president and chief executive. “What retailers need to think about is how to bring a picture of the future to the present.”
There are three different stages of position a company for growth which included the Product position, Market positioning, and Corporate positioning.
Product positioning – This is the first stage; a company has to determine how it wants its product or service to fit in the market. What type of product branding should it have – cost-effective or high quality? Advanced technology? Will the product sell to a broad audience or a niche demographic? During this stage, it is critical to pay attention to the “abstract or intangible” positioning factors, such as the quality of product and value proposition, amongst others.
These intangible elements are based on customer perceptions, not statistics and data or product specifications. Low prices and top product specifications will not always win sales. Instead, it is intangible factors that are the tools for gaining strong product positioning.
Market Positioning – This is the second stage of the positioning process, for a product to gain recognition in the market, it needs to establish credibility with customers. The marketplace has to perceive the product as a champ. To be able to build a strong market position, the business is required to understand the mechanics of the industry system, the network of retailers, distributors, influencers, and build strategic partnerships.
Corporate positioning – This is the final stage of the process; it involves the positioning of not only the products but also itself. This is implemented mainly through financial success, if the company’s profits fall, its brand becomes tainted, and customers will become disinclined to purchase products from a company in financial distress. Most times when it happens, the company often has to start over with product positioning and rebuild its position in the market.
These stages of positioning are a fundamental part of any company; they involve business planning, growth strategies, and must be supported by all the management and employees in the company.
Here are a few tips to stay ahead and help position your business for growth:
Focus on Collaboration – To execute these stages of growth positioning, you need to build reliable and trusting relationships with customers, employees, and partners. Collaboration is central to building an organization where information flows freely, and innovation thrives. Furthermore, find ways to leverage social media to engage and collaborate when necessary.
Create a Learning Culture – Stay open and curious always. It is important to connect with other individuals outside of your organization. “Change is so fast that exchanging information and knowledge is critical,” says innovation expert Gundry. “Think about forming alliances and joining trade groups.”
Invest in Talent building – Regardless of the high rate of unemployment in society today, many companies are still struggling for skilled professionals because they are in limited supply. Warning of “unparalleled talent scarcity,” a 2011 report by the Geneva, Switzerland-based World Economic Forum predicts skilled worker shortfalls of 25 million in the United States and 45 million in Western Europe by 2020. Investing in talents as an entrepreneur will give you edge cutting advantage over competitors. This involves employers retraining employees who need additional skills and also providing intensive training for new employees.
“We’ve taken technology and embedded it in everything, but if you don’t have people capable of using those technologies to innovate products and services, the technology is junk.” – Edward Gordon, founder, and president of Imperial Consulting Corp.
“No man can go beyond his thoughts.” This saying has proven to be true in the lives of many people, especially the Nigerian youth. And no matter how gifted, talented, educated, or skilled a person is, that person can’t progress beyond his or her mentalities.
It is quite sad that youths, because of some of these mentalities, find it harder to survive in Nigeria than they usually would in other developing nations.
Here is a list of 5 of such mentalities Nigerian youth must drop to succeed:
1. The “Starting small takes too much time.” mentality
I have conversed with a lot of Nigerian youth and the mentality of not wanting to start small is common. Some believe that starting small is time-consuming. These youth see the benefits that starting small can bring, and yearn for the fruits without the growth process. Some will rather dodge meaningful things that take patience to grow.
This mentality is why a lot of these youth celebrate and boldly defend cyber fraudsters who choose to cut corners when these fraudsters are apprehended by the Economic and Financial Crime Commission (EFCC).
The be honest, Nigerian youth know what they want, they know the price to pay to reach their goal, but the issue with the majority is that they are unwilling to start from square one and go the whole nine yards.
Hey, if you feel three years is too long to dedicate to grow a business or career at twenty-seven, remember that you will still be thirty years in three years’ time with little or nothing to show for it. So it is better to be thirty and have a three-year-old business or career, than to be thirty wishing you had taken that bold step three years earlier.
The start of anything is not always easy because the start (foundation) is where the strength lies. The foundation of any building takes time and resources, and the more time and resources put into the foundation, the stronger the structure.
2. The “If you’re not talking money be brief.” mentality
A lot of Nigerian youth are not succeeding yet due to this mindset. It is the reason behind their nonchalant attitude towards training, seminars, boot camps and conferences. They think attending these events is a waste of time.
Money doesn’t grow on trees. It comes when we have the right mentalities and consciously make the right efforts towards success. There is a need to look beyond money to see the greater opportunities that lie ahead. But Nigerian youth see any job, discussion or activity that its immediate reward isn’t money as “invalid.”
If I had focused on the money when I started as writing some years ago, I am sure I won’t have had a writing career now. I did a lot of free jobs to hone my writing skills, and I always looked for opportunities to learn and grow. I was rejected by so many editors despite the fact that I offered to write for free.
As a rookie writer, I understood the concept of seedtime and harvest, so I didn’t lose focus of the bigger picture I had in mind. Am I still writing for free today? No, because I have paid my dues, and I’m reaping the harvest now.
The ‘money-love’ is seriously stagnating a lot of vibrant youth.
Many young Nigerian ladies aspire to become young entrepreneurs in the youth-dominated tech industry in Nigeria but decided to let go of their dreams because of the mentality that the tech industry is male-dominated.
The thought of what family and friends might say about their supposed career choice kept them from living a life they are passionate about.
Some years ago, I approached a glazier to teach me glaziery, but he refused my apprenticeship because he believed glaziery was for men.
Many Nigerian youth share this mindset and it is one of the reasons why we have few women making marks in the Nigerian tech industry.
4. The “If it’s Nigerian, it’s substandard.” mindset
Recently, Innoson Motors ( Nigeria’s first automobile manufacturer), trended on social media platforms for the 25 million Naira car prize won by the winner of season 4 of Big Brother Naija.
Made in Nigeria by Abubakar Sadiq Abdullahi
Some youth took to social media to belittle the vehicle because it wasn’t a foreign brand. How can our manufacturing industry grow if youths have such a mentality?
The mentality that a locally produced product is substandard has crippled many businesses and led to depression among local manufacturers. Some of these Nigerian youth would rather promote foreign products at the expense of our own products. They spend their savings patronizing foreign companies instead of buying locally made products.
We need to drop this mentality if we must grow. The result of emancipating our thoughts from such mentalities would subsequently bring in the era of the much-needed growth in the Nigerian entrepreneurial ecosystem. I believe this is one area that Nigerian mums must take some responsibilities and do something to correct this mentality in their children.
5. The “Salary is the money they pay you to forget your dreams” mindset
This mindset is common among young corporate workers and entrepreneurs. I wonder how such an untrue sentiment became viral in the first place. Some young Nigerian employees in the corporate sector rarely put in their best because they believe they are forgetting their dreams by working for someone.
And this is the reason many of them run out of paid employment and jump into entrepreneurship without knowing what entrepreneurship entails.
Everyone can’t be an entrepreneur and not everyone can be in the corporate world either, so I don’t know where such a mindset came from.
We all have our role to play in making the world a better place, and the most important thing is identifying your strength and positively utilize it.
Talking down a person for choosing to be in the corporate world doesn’t make any sense. I’m an entrepreneur, but I think it is wrong to see someone as less for choosing where to be legally productive.
6. High Mindset of Entitlement
Yes, I said 5, but the year is running to an end and I chose to gift you something worthy of year 2020 – Listen, Nobody owes you anything, not your parents, not your spouse, not even your children!
If there is only one mindset you must drop as a Nigerian youth to succeed in life, it is the entitlement mindset. You must learn to develop and rely on yourself. If there is one statement that comes to mind often, it is this – “Accidents don’t just happen, they are caused by a series of unfortunate events, each of which is associated with one or more cause factors”.
And so is the story of our lives, we are the product of our actions and inactions, simple. In order words, wake up from your slumber, and wake up to your responsibilities. Only one person can take you from where you are now to where you want to be – YOU!
A lot of Nigerian youth must re-evaluate their mentalities regarding so many things. Our mind is the engine of our life, and it does not function optimally when clogged with the wrong mindsets.
Positivity –One Mindset Nigerian Youths Must Develop To Succeed
Ask any Nigerian what mindset they would love to develop to aid their success, and a majority would tell you that it is a positive mindset. Nigerian youths no longer believe in working hard, little wonder the president referred to us as “Lazy Nigerian Youth.”
Unfortunately, they no longer believe that anything works in the country any longer.
There is an urgent need to focus on reshaping the mindset of the average Nigerian youth. The country has failed its youth – the majority no longer believe in working their way to the top. They now prefer to bribe their ways through.
We must work collectively as a nation to put an end to this negative mindset menace and refocus the mindset of our youth on to right values. We must find a way to get the Nigerian youth to become positive-minded.
So, what is your thought on the author’s position on Nigerian youths and their success mindset? Unfortunately, these mindsets spread across sub-Saharan Africa, and it is not limited to Lagos or Nigeria. It affects millions of people.
We would love to learn your thought, please share using the comment section below.
Nigeria is blessed with many entrepreneurs operating in the SME sector. With the many factors militating against entrepreneurship, there are some Nigerians that have braved it against all odds and are very successful today. They are considered Leading Small And Medium Size Enterprise (SME) Brands In Nigeria.
We have compiled a list of some of these Nigerians that have made names for themselves with the hope that Nigerians like yourself can learn a thing or two from these entrepreneurs who have found ways to excel above all odds.
Eventful Nigeria Ltd was established in 2002 by Yewande Zacchaeus. Yewande is a Lawyer, Banker, and Entrepreneur. She started Eventful Nigeria Limited after a successful banking career. She retired from banking from Ecobank Nigeria Plc.
She had a degree in Law from the University of Lagos and a Master’s degree from Cambridge University. She also attended an Advanced Management Program at
IESE Business School, Barcelona.
Yewande is the pioneer in the event planning industry in Nigeria. She is an active member of the Women in Management and Business and Public Service – (WIMBIZ) and a mentor to many female professionals.
Funke Bucknor Obruthe is the founder of Zapphaire Events. She is a Lawyer and Entrepreneur. She graduated from the University of Lagos. She worked briefly in an advertising agency before she founded Zapphaire Events in 2003.
She is the author of the popular book: The Essential Bridal Handbook. She has earned several awards and recognitions including being listed in BBC’s 100 Women series.
Zapphaire Events has planned one-of-a-kind events in Nigeria and they are known for their excellence in event planning. Funke is an active member of the Women in Management and Business and Public Service (WIMBIZ) and a mentor to many professionals.
The House of Tara International was established in 1998 by Tara Fela-Durotoye. Tara is a Lawyer and Beauty Entrepreneur. She is the pioneer in the bridal makeup profession in Nigeria. She created the Tara Orekelewa Beauty Products, Inspired Perfume and H.I.P Beauty range.
She launched the first bridal directory in 1999, set up international standard makeup studios and established the first makeup school in Nigeria.
Tara graduated from Lagos State University and has attended many business-related programs in top business schools. Tara is an active member of WIMBIZ.
B. BM Pro Make-Up
Website: https://bmpromakeup.com/
Banke Meshida Lawal is the founder of BM Pro Make-Up. Banke is a makeup artist and businesswoman. She is a graduate of the University of Lagos, where she studied English. Banke is known for her many awards and achievements in the Nigerian Makeup Industry. BM Pro Make Up is popular among celebrities and executives, including the former first lady of Nigeria, Dame Patience Jonathan.
Banke’s journey started back in her university days, she has since perfected her skills and trade to become the brand that she is today.
Her brand BMPro is a multi-sectorial business, owning a makeup line of over 40 products, a training school, a beauty advisory and, an online magazine, BM| Pro.
Ohimai Atafo started Mai Atafo in 2009. He is a fashion entrepreneur and founder of the label: Mai Atafo. Ohimai had a successful career in the corporate world as a brand strategist with British American Tobacco and Guinness Nigeria Plc, before venturing into the fashion business.
Image source: Tori.ng
He studied at a Savile Row Academy in Leeds before he started his bespoke tailoring and bridal atelier business. When you think of bespoke tailoring in Nigeria, Mai Atafo is the name that comes to mind. In Africa, Mai Atafo’s Tuxedos are possibly the best.
“For the love of the craft Mai Atafo finds time to be an incredible MC/Compere and voiceover artiste having done shows like 2010 Miss Nigeria Pageant alongside Agbani Darego, City People Fashion and Style Award, Face of Sleek Model Competition, Etisalat Masterbrand Re-launch, FCMB Employees Award Night and voiced a Glo advert and Soundcity Video Music Awards live-show.
In his not so spare time he still manages to inspire with is free fashion mentorship initiative called Fashion Conversations.
Mai Atafo is married to Ede-Christine and blessed with a daughter, Aima.” – Mai Atafo
Ms Deola Ade-Ojo is a Nigerian born fashion designer who is popularly known by her design name, Deola Sagoe. Deola Ade-Ojo expanded her mother’s fashion business to become an international label known as Deola Sagoe. She began designing in 1988 when she joined her mother’s business with a view of expanding the label’s repertoire to encompass more contemporary designs for the ever-developing, cosmopolitan high-brow society.
Image Source: Channelstv
Deola Sagoe has long taken her fashion adventure to the international stage with many awards and trailblazing designs under her name. She holds a master’s degree in Finance and Management. She studied at the University of Lagos and University of Miami. Deola Sagoe is an African owned fashion business that competes well on the global stage.
Toyin Bello popularly called Ty Bello studied Economics at the University of Lagos; She came to public attention in the early 2000s as a member of the music group Kush.
Toyin is a celebrity photographer, who is known for her excellent images. She is one of Nigeria’s most recognized artists. She has also built a reputation as one of Nigeria’s foremost photographers and is a member of the talented photography collective Depth of Field.
She was the official photographer to the former president, Goodluck Ebele Jonathan. She is also the official photographer for Thisday Fashion Magazine. There is a supposed satisfaction that comes by having a photo-shoot by TY Bello to mark a memorable day or event.
Kelechi Amadi Obi is an artist, a lawyer, and a photographer. He was called to bar in 1993. He is a known celebrity photographer and also popular for his several works with corporate organizations like MTN, British American Tobacco, Guinness Nigeria Plc, PZ Nigeria Plc, The Ford Foundation, and others.
Kelechi’s works have been featured in exhibitions internationally. Kelechi Amadi Obi has his signature on many celebrity and corporate photographs.
Other successful photographers in Nigeria include:
Garment care Limited was established in 1999 by Nana Otedola, wife of Nigerian billionaire, Femi Otedola. She lives in London and Nigeria. and is known for the partnership they have with hotels, restaurants, corporate businesses, and executives.
Garment Care cleaning is different, by employing a perfect blend of hand valeting and the most advanced and clothes-friendly techniques in fabric care, she is able to churn out clothes which look like brand new. With an unparalleled reputation of excellent quality service, Garment Care is preferred for her specialist service and attention to detail.
2. CleanAce Drycleaners
Website: http://cleanace.com.ng/
Eniibukun Adebayo started CleanAce dry-cleaning in 1991 and grew the business into a structured one. He once opened up in an interview that he started the laundry business right from his bedroom, alongside his wife.
Today, the brand has grown to include CleanAce academy, the very first dry cleaning academy in Nigeria. CleanAce Academy offers the best education in dry cleaning for both freshers and the experienced alike. It is targeted toward ensuring the acquisition of needed skills and professional standards in the dry cleaning and laundry industry.
Itoro Ugorji is a USA trained childcare expert. She holds a Master’s degree in Early Childhood Education. Her business provides childcare consultancy and crèche services to corporate organizations and individuals.
They run convenient and flexible childcare services for children age 3months to 10 years in the form of daycare and afterschool services. The business opens every day including weekends, public holidays and during festive periods. The business also provides outdoor childcare services at events.
Deola Olowolafe had worked for many years in the financial services sector before starting the crèche. She holds a diploma in childcare services and a Master’s degree in Early Childhood Education.
Almost every school has a crèche section. However, some stand out because of their time flexibility and excellence.
Ada Osakwe is a Nigerian economist, entrepreneur, and corporate executive. She is the founder of Nuli foods, a brand known for its quality and attention to sourcing fresh farm food items.
Ada is also the founder and chief executive officer of Agrolay Ventures, an agribusiness investment company based in Nigeria, which invests in African agricultural food-related companies. Nuli Foods focuses on ready-to-eat traditional African meals.
Veronica Odoemenam` started Veritas Caterers Ltd in 2015. The company is known for its well-cooked healthy food. She is strategically positioned as a leading brand in the hospitality and catering services sector, with core competencies in Corporate and Social Events Catering, Corporate Canteen Management, Office and Home Meals Delivery.
Her customers are more of the elite class that values healthy food. Veritas food is also served in corporate offices.
OLCA partners with the top UK certifying organizations in training executives, coaches, psychologists and professionals that want to reach the top in their careers. OLCA also known as the Catalyst, has trained notable Nigerian executives and business people including Mosunmola Abudu (Mo Abudu). OLCA has worked across East, West and Central Africa.
Tricia is a social media influencer who helps small business owners to structure and market their businesses. Tricia coaches entrepreneurs by helping them develop business and sales strategies that work. Tricia had worked with about thirteen multinational companies before she started her consulting business.
Adedamola Ladejobi is a Barrister and a certified nutritionist. Her health and wellness company is known for helping people attain their desired body goals. Askdamz, as she is popularly addressed, is a social media influencer and a public speaker.
According to WomenAfrica, Ask Damz struggled badly with symptoms from Gastroesophageal reflux disease (GERD) which motivated her to the wellness journey.
Adura is United Kingdom trained Electrical and Electronics Engineer. She worked as an in the UK for about eight years before starting her health and wellness business. Adura is a public speaker and wellness influencer who was featured on Ebonylife TV and Africa Magic.
Mabel Makun has over 15 years of experience in her craft. Midas Interiors Limited is known for its exquisite designs. It serves homes and corporate offices.
The Grand Cobbler is a reliable cobbler. This cobbler works on luxury brand items and leather valuables. She runs two offices in Lagos: Lekki and Osapa.
The Lady Cobbler and Company Ltd specialize in men, women, and children shoe repair. Not only do they repair shoes, but they also produce good handmade personal effects.
Linda Ikeji blog was started by Linda Ikeji. She is known as the queen of blogging in Africa because of the wealth that blogging has brought her way. She also owns the online Linda Ikeji TV (LITV).
This is a successful blog run by a Nigerian journalist who lives in Germany. Many Africans, especially Nigerians get gossip feeds from this blog on a regular basis.
Other notable Nigerian bloggers are: Kemi Omololu-Olunloyo and Kemi Filani
When starting a business, it is important to look for business ideas that have the possibilities to make your startup successful; you would do well to seek business ideas in industries with high growth potentials and profitability. One that your team and strength as a startup can effectively execute.
Are you looking for new ways of earning money? Check out a list of 100 business ideas, especially in Nigeria. While this list was created with Nigeria in focus, the business ideas are in no way limited to Nigeria.
It is a list of Untapped Business Ideas and small scale business ideas in Nigeria to start with 5k 10k 20k 30k 40k in Nigeria. Overall, please note that it is no child’s play starting a business in Nigeria.
Your first step to starting a business is to register your business, in Nigeria, you would need to register with the CAC. Kindly take your time to at least learn how to register a business name in nigeria; lets jointly make corporate governance a business culture in Nigeria.
Here is Our List of Highly Lucrative Business Ideas for Startups
Sell Products Online.
Selling products online has become very popular among people who want to make money fast. It is also a good way to start a small business because you only need a computer with internet access and a credit card to sell items online. The best businesses in Nigeria are actually online.
Some of the products or services business in Nigeria that you can sell are:
FOOD BUSINESS IDEAS IN NIGERIA
Catering Services
A sample Sweet&Savoury Table (08129820420)
Catering is one business idea in Nigeria that is hinged more on the passion than the skills of the entrepreneur.
How to start the Catering business idea
The best way to start this small business idea in Nigeria is by leveraging social media to create the needed visibility and customer awareness. Focus more on smaller parties, groups, and home gatherings. Register a business name, cook some nice meals, and showcase them using Facebook and Instagram in particular.
You really do not need to have all the categories of cookware, you could hire per need basis. Ensure that you have enough kitchen space (It could also be your backyard) to prepare food and use paid carriers, or Uber /Bolt services to transport your stuff to the client’s preferred venue.
Find, and come to some arrangements with other service companies in the hospitality industry, especially the party planners, wedding planners, Masters of the ceremony, etc.
How to keep the Catering business ideas in Nigeria successful
One of the best ways to start business in Nigeria, is to Start small. Ensure to create a brand and be known for something in particular. Think out of the box and be different. When you have more staff, you could start doing larger parties and functions. Go above and beyond by offering to clean up after the party for great customer service.
If you must, partner with complementary services in this service section, like decorators, events planners, etc. Such partnerships would definitely yield mutual gain.
Financial Capital Needed To Start The Catering business ideas in Nigeria
There has always been arguments as to if were possible to start business in nigeria with Little or no capital. Your customers most time pays for the service ahead, just ensure to get above 50% of your charges, usually, you’d be paid about 100%, and that should be enough to take care of your expenses including your hired hands such as cooks, and dishwashers (If you must).
Starting Cost Outlay:
ITEM
AMOUNT
Burners, chaffing dishes
N150,000
Stoves, Gas cylinders, etc
N50,000
Pots, Serving Plates, spoons, etc
N45,000 – N300,000
Food Trolley
N60,000
One-page website
N15,000
Food labels
N2, 000
Menu cards
N5,000
Complimentary cards
N10,000
Other essential Tips:
You need to partner with a service provider to give you well-trained ushers, servers, even photographers to make your service stand out. Practicable minimum startup cost = N157,000.
Know however that the catering business in Nigeria is particularly for the aristocratic clients and as such, it must not be treated as you would any other business in Nigeria.
However, you could choose to rent the chaffing dishes, stoves, etc and start as low as N60,000
Food DeliveryServices
My personal effort at cooking – I could start a food delivery business if I have to.
Most people love good food, but only a few know how to make very tasty meals. If you’re good at cooking food, you may wish to consider cooking it in bulk. There are a lot of 9 to 5 workers that would gladly have your meal at their launch time or some that may even ask for enough quantity to last them for a while.
How to start the Food DeliveryServices business idea
You could offer your services to working professionals, especially those in the corporate setups. All that is needed is to attract the right customers. Leverage social media, especially Facebook, and Instagram to attract your customers. Make some good looking homemade meals, take very good photos of the meal.
Try to dish your food to look very appealing, serve it on a white plate if you have one, and then set the dish in such a way that you could take photos using your phone’s camera at the least. Ensure that you have some rays of sunlight to make the photos pop.
How
to keep this business idea successful
Get yourself a
website if you can, it should not cost you much to establish a good website to
showcase your food and also collect and process orders. Once you’re established,
offer your customers a menu they can order from.
Consider picking a niche, position yourself to serve a market, either as the healthy meal sector or the local delicacy sector. Be different, ensure to give the best quality ever at as affordable as a rate you could offer. People love quality at a reasonable cost, and would readily refer other customers to you. Serve a range of meals; keep it interesting for them and you.
Financial Capital Needed for Food Delivery Services Business
You could actually start this business without cooking any sample of yours. Go to the Internet or find means of getting nice-looking photos of food in the sector you want to serve. Be persistent, put a photo at least 3 times a week.
Your capital need should be concentrated at creating a very appealing customer experience. Invest in a website, a payment gateway, and partner with a delivery company to deliver your products.
This is one business that can start with less than N20,000 ($80)
Ensure that your customers know that the cost of delivery is passed to them, and clearly state that on all your media channels including your menu. Start small; use the money paid by your customers. You’d, however, need to buy disposable plates and cutlery to get you started.
Starting Cost Outlay:
Disposable plates, spoons, and bowls = N10,000
Facebook advertisement = N8,000
Other essential tips:
You could find and take permission from other entrepreneurs in the food business to enable you to use their photographs to start your campaign. Just ensure that you know how to cook. So no excuse here that you do not have the money to start.
Do you want to open a restaurant without paying rent and having to buy tons of kitchen equipment? With a decent set of wheels and a small-scale food preparation station, you could launch a food truck business.
How to start this business idea
Starting a food truck business means you would have the availability of some funding source to offset your start-up costs. Owning a food truck is not cheap. The business is very lucrative and the entry barriers could be a bit high.
Decide on specific food especially those in the fast-food sector. Ensure to have mastered your recipes, and the act of clean-cooking (washing the dishes as you cook).
Get the right local permits and position your food truck to take advantage of the movement of your target market. Go for the working class, look for areas near Bus-stops.
How to keep this business idea successful
Focusing on a particular food niche can help your food truck business stand out from any competition and aid in your branding strategy. Master competitive pricing; it would help lower your risk of failure.
Ensure to always get fresh food items and be proactive with your service.
Financial
Capital Needed
This is a high-capital business. The entry barrier is relatively high, but the return on investment is steady and high enough to make you break even within few months. You would need a functional truck to enable you pack and change locations as market demands.
If you are a good cook, you would not need to hire any staff.
Starting Cost Outlay:
ITEM
AMOUNT
Food Truck
N2,000,000 – N5,000,000
Cookwares
N150,000 – N300,000
Advertisements
N50,000
Startup Food items
N50,000
Sit out Kit (Optional)
N85,000
Permit (Depends on Location)
N150,000 on the average
Other essential tips:
Running a food truck involves extremely long hours, no matter how good you or your staff is. The success of your food truck business is directly dependent on the amount of time and effort you put into running it.
You must understand the 4Ps of Marketing. There is no better place to put them to work than this business. Your social media strategy must be top-notch.
Fish Grill
Most people, if not everyone finds it difficult to resist a well-grilled fish. Fish grills are commonplace, especially in Nigeria. In Abuja, owners of fish grills make as much as One million Naira (N1,000,000) as turnover, daily.
You could actually make yours a mobile grill and leverage people’s movement to and fro work.
How to start the Fish Grill business idea in Nigeria
The best way to start this is by leveraging social gardens and parks. You could, in fact, make yours different from the pack by going online – YES, AN ONLINE GRILL DELIVERY SERVICE.
You really do not need a lot of items to get started with a fish grill, and yes, you can also expand to meat, snails, etc.
How
to keep this business idea successful
Start with a clear definition of your target market. Having a clear understanding of your market would help you in deciding what strategy to use in entering the market.
Your options are vast – You could go purely online, mixed, and even partner with owners of other social gathering outlets.
Financial Capital NeededFish Grill business idea in Nigeria
Little or no capital. I love the idea of a mobile grill, and that seems to be the highest on my scale in terms of barriers to entry, so I chose to reference that.
Starting Cost Outlay:
ITEM
AMOUNT
Grill (several Options available)
N10,000 – N85,000
Space Rental… You could pay this monthly
N15,000 – N50,000
Take-off stock
N100,000
Advertisements (Very important)
N50,000
Website with payment Gateway
N150,000
Sit out Kit (Optional)
N85,000
Permit (Depends on Location)
N150,000 on the average
Other essential tips: Your ultimate goal is to aim for online sales and delivery. That can only be achieved if you build an online brand, hence the budget for advertisements.
Seek out any spot at all, some may require that you get a permit. Such spots could beside car wash, market exits, gardens, churches, schools, even in front of your house.
Practicable minimum startup cost = N50,000
Bakery
If you love to bake like I do…. just kidding. I am actually surrounded by bakers and know a thing or two on baking. I know that baking is highly lucrative and you do not spend more than 20% in cost to bake anything.
So, if you are like me and know how to and also love baking, why not get paid to do it by opening a bakery? There are a lot of recipes out there, you could even create yours. Just ensure to find a recipe that you can replicate perfectly every time.
How to start the Bakery Business Idea in Nigeria
You can actually start this small business idea from home, and as part-time at your free periods; evenings and on weekends until you make enough money for you to make it your full-time gig. Once you have earned enough money, you could then expand to a space big enough to enable you to bake professionally. Ensure to incorporate online payments and marketing into your strategy from the onset.
How to keep this business idea successful
Diversify – Have multiple products/ income streams to sustain your business
Have a social media strategy
You definitely need a website.
Focus on what your customers want, and how they want it
Hire a skilled and experienced help
Don’t forget about marketing
Financial
Capital Needed
This depends mainly on how big you want to start. You would need some initial investments to get you started, but nothing an average Nigerian would not be able to afford. What takes initial capital mostly is the space and equipment needed to get you started.
If you are lucky enough to have a good-sized oven at home, then you are good to go. The next thing would be marketing. Marketing is very essential to your growth especially when you start from home or make it a side hustle.
Starting Cost Outlay
ITEM
AMOUNT
Oven (several Options available)
N120,000 – N485,000
Mixers
N75,000 – N350,000
Bake-wares (Several of them)
N100,000
Proof Boxes for Bread Items
N50,000
A website with Payment Gateway
N150,000
Salary for one extra hand (Baking staff)
N85,000
Advertisements
N50,000 to start
Other essential tips:
Start small and gradually grow into a fully commercial bakery. Practical minimum startup cost = N37,000. With N37,000 you could start small from your home, or that of a friend. Most friends would let you use their ovens and other facilities for some freshly baked cakes, bread, etc.
Cooking Classes
Image Source: https://chefsacademy.info/
If you love cooking, and you do not mind teaching people what you know, then this could be a money-making business for you. Why not get paid to do it by opening a training school – Online or offline.
How to start this business idea
You can start this small business idea part-time, during the evening and on weekends until you become known, your business generates regular inflow and you feel you need a bigger space. You could then go big and hire other hands to help you.
Starting this is easy. All you need is your phone, a good phone stand, some good light source, a neat kitchen, some neat napkins, and some nice looking pots. It is always the best option to start this at home. Get help to hold the camera and make a video of you teaching while you cook.
Do not bother about the quality when you start, you would eventually get better by the day. Just start.
How to keep this business idea successful
Keep learning new recipes and offering various categories, for example, you could teach your clients/audience how to make a particularly special meal per week. Call in other friends to join you once in a while to teach people other things you may not be familiar with, like desserts, or Italian meals, or vegan meals. Your ability to always bring in varieties and new stuff, especially new faces, will bring previous customers back to learn more.
Financial
Capital Needed
Little or no capital. Try to cook what you would normally eat and teach people to make what you would eat after the class. That way, you save yourself a lot of money.
ITEM
AMOUNT
Nice camera phone (If you do not have one)
N30,000 – N150,000
Phone stand
N10,000
Starting food items
N4,500 – N10,000
Data credit
N500
Marketing
N10,000
Other essentials items:
Start out with Youtube and other social media. Ensure to have your own Youtube channel and with the right marketing and execution, you could grow your brand and start an offline school.
Recipe Collection
The recipe collection is one business sector a lot of people would normally not pay attention to as a money-making business. However, there are millions of people out there searching for recipes daily. Such searches come from chefs, housewives, and other people with the mindset off their culinary skills to their willing clients.
How to start this business idea
Recipe collection can take different forms, from setting up a recipe blog, to writing your own cookbook, or even showcasing your recipes through videos on YouTube, Instagram, or your personal recipe bog.
To start, It is best to select a niche you love and are good at, one that you could be proud to build a brand around
Make a conscious effort to document the preparation of all the meals you love
Take your time to perfect the recipe by going over them several times to ensure that your recipe is accurate and can be easily replicated following the steps you documented
Pick out your preferred media for to present the recipe to your customers – viz book, audio, or video
How to keep this business idea successful
Focus on a market (Cuisine) – African, Calabar, Continental, Italian, etc
Diversify – Diversify within your market – Give your customers varieties and keep surprising them to enable them to keep coming back for more.
Have a social media strategy
You definitely need a website, regardless of the media of delivery.
Think out of the box, present your recipe in a very easy to replicate manner, do a lot of info-graphics if you must; just ensure to focus your attention on the customer experience.
Financial
Capital Needed
Little or no capital. Your capital outlay is a function of how vast you want your recipe to be. You could focus on a single recipe and make it so good in such a way that even a blind man would find it easy to replicate.
Starting Cost Outlay:
ITEM
AMOUNT (Naira)
Starting ingredients
10,000
Media platform
30,000
Marketing and Sale – Advertisement
36,000
Website
15,000
Other essentials items:
Your ability to think out of the box would make the difference between your success or lack of it. Did you know that you could sell your recipes to established restaurants?
Practicable minimum startup cost = N40,000
ONLINE BUSINESS IDEAS IN NIGERIA
The proliferation and advancements in technology have given rise to the possibility of entering new markets, developing new products, etc.
Most significantly, it has enabled entrepreneurs to create businesses that are wholly operated virtually; mainly in the digital environment. A major result of this is decreased overheads from physical space and in some cases personnel cost.
Businesses can now be run on the move, without boundaries, and in some cases, secretly.
This is a list of some businesses any focused entrepreneur can pick up and make money from, online:
1. Build a Niche Blog (or Website) and Use Affiliate Marketing
Image Source: Unsplash – Anete Lūsiņa
Blogging can be quite fun. Especially if you love to write, making money doing what you love can be very fulfilling. Earlier in June this year, I woke up and asked myself what I could do with the spare time I had and somehow make money from it now, and into the future. So blogging came to mind.
Having the right blogging platform can mean the difference between a successful blog and a failed one. I mostly use WordPress for its ease of use and support base, but I have also made use of almost all the available platforms. Overall, I highly recommend WordPress. The attached chart says it all.
Decide on a niche
One of the reasons we go into blogging is to share our knowledge of a specific field or topic we are familiar with, but it would not make sense to blog in a field that is absolutely dominated by authority sites, their expertise, authority, and trustworthiness would simply drown a newcomer.
So it is necessary to spend some time thinking about the niche you would love to blog on. Ensure that you narrow down on the niche as possible.
It is better to blog on BMW cars than it is to blog on cars generally.
Setup your domain name and get a hosting service
Picking up domain names these days is similar to being on a gold mine – the best domain names have all been taken. There have been instances when big corporations have had to buy domain names relevant to their purpose for several thousands of dollars.
That notwithstanding, if you are creative enough, there is always room for more domain names out there.
How to keep this business ideas in Nigeria successful
In the blogging world, content is king. Ensure that you dish out high-quality content frequently, preferably on a schedule. A major key to being successful as a blogger is your ability to figure out what content to write about, and when to write it.
Keep engaged follower-ship and in time everything would fall to their rightful places.
Financial Capital Needed
Little or no capital. Your capital outlay is a function of how vast you want your recipe to be. You could focus on a single recipe and make it so good in such a way that even a blind man would find it easy to replicate.
Starting Cost Outlay: Tools and supplies needed
ITEM
AMOUNT (Naira)
Starting ingredients
10,000
Media platform
30,000
Marketing and Sale – Advertisement
36,000
Website
15,000
Other essentials items:
Your ability to think out of the box would make the difference between your success or lack of it. Did you know that you could sell your recipes to established restaurants?
Party planning is one the most lucrative business ideas that anyone can easily start in Nigeria with very little financial capital.
It more than getting a DJ, entertainers, caterers, and dancers for events. This business is built on patience, diplomacy, multitasking, salesmanship, organizational abilities, and a passion for seeing your clients fulfilled.
The business involves but not limited to, planning bachelor/bachelorette parties, concerts, conferences, seminars, weddings, anniversaries, book launches, etc.
It doesn’t require any special education to start. It is usually a business born out of passion, and through experience and exposure, you will well be equipped to climb up the ladder.
What you need to start this business idea
Passion: It should be a business you’re passionate about. By going to events and volunteering to help, might help you improve your skills.
Create a business plan: Write out and plan everything that the business will need to kick off. A business plan should answer every critical question relating to the business.
Party planning is a broad business, so you can decide to tailor it to a particular niche.
State your charges and responsibilities for every event.
Decide the cost: Although it’s not advisable to have fixed prices due to the ever-changing cost of things, but try to have stipulated cost for every event.
Consider the fact that every event/client is different from the other when charging. Big outdoor events are more tasking and expensive than in-house parties.
Lawyer up: Employ the services of a lawyer to draft contracts that will cover you from any liability that might arise in the course of the business.
Business registration: Get your business licensed by the CAC – The Nigerian Corporate Affairs Commission, and try to have some insurance coverage for the business.
Marketing: Be strategic about how you’ll market your services online and offline. Don’t only rely on referrals from your clients, work towards getting new clients. Read up on customer Acquisition here.
Put up your best jobs online for people to be aware of your services. You have to be conversant with social media platforms like Instagram, Twitter, and Facebook.
But while at it, make sure you’re covering grounds offline. Create brochures, business cards, and tell friends, family, and colleagues about it. Do not fall to the If I Build It They Will come, Trap! The path you choose to go is yours to take. But listen to me, you cannot make sales unless you attract the right type of customers.
Create portfolios for your successes: Properly document all the parties you’ve planned and executed successfully.
Create a team: The importance of having a good team you can rely on to successfully execute any event can’t be overemphasized. Have a good business relationship with DJs, caterers, MCs, entertainers, photographers, decorators, rental service companies, etc.
How to keep this business idea successful
Success is guaranteed when you embrace each phase of the journey by giving every job your best. As a starter, you will quickly build your reputation by taking up jobs you can handle correctly.
Another way to build the credibility of your brand is by being truthful in your dealings because no one will like to recommend a party planner that reaped him/her off.
Financial capital needed
It needs little or no capital to start up. The clients provide the funds required for planning.
ITEM
COST (NGN:K)
One-page website
15,000.00
Business cards
10,000.00
Sponsored social media promotions
10,000.00
Brochures
5,000.00
Other essential tips
Don’t claim someone else’s work because many party planners are doing it.
Market your business aggressively if you don’t want to be overshadowed by competitors.
Lastly, party planners are outgoing and creative people. Work towards being one if you’re an indoor person.
As the name implies, the wedding marketplace is a place intending brides and grooms can hire or buy their wedding items.
Planning a wedding in Nigeria is quite a cumbersome task; that’s why there are people who specialize in making weddings less stressful – The party planners.
A wedding marketplace could be online or offline, but we’ll be focusing on the online wedding marketplace. An online wedding marketplace is cheaper and easier to own. All you need to do is have a well-designed website where buyers, sellers, and renters can meet.
What you need to start this business idea
Salesmanship: You need to have the skills of an excellent salesman to run an online wedding marketplace successfully. Your ability to bring buyers and sellers together should be top-notch.
An eye for quality: Having an eye for quality wedding materials will help in spreading your fame.
It’s the joy of every intending bride/groom to have his/her desires qualitatively met.
In Nigeria, weddings are a big deal, and you won’t want your clients to think that you lack quality wedding materials because of a poorly developed website.
Patience: As long as weddings are concerned, patience should be your watchword. Intending couples are some times indecisive. Even after you’ve shown them the best of items and given them the best advice, they will still be skeptical about their choices. That is where patience comes into play.
A well-detailed business plan: Plan this business to the very last detail. Answer every question/doubts that may arise. Decide on the prices of every item you intend to rent out or sell. Charge for the extra services you offer. If you need an expert at writing business plans, then get in touch using the contact us page.
Build a professional network: Since you’re just like the middleman between the buyers and the sellers, it is necessary to have the best sellers in your professional network. You have to know the quality of every item you’re putting up on your platform.
If it means going to the physical shops of your sellers to see their wares first hand, by all means, do it. Your success depends on the quality of the items you sell on your marketplace.
Lawyer up: Get a lawyer involved and get insurance if you can. ExpertsNG has some of the best SME friendly lawyers that the country boasts of, link up with them here.
Have a return policy: Let the buyers and sellers know what the return policy is.
Marketing: Since the business is online, you need a web developer to create a user-friendly website for you. Use social media platforms like Instagram, Facebook, and Twitter to your advantage.
Tell family, friends, and colleagues about your business. Go to events and create a strategy to convert marriageable singles into clients.
How to keep this business idea successful
There are lots of online wedding marketplaces, but very few are succeeding in Nigeria.
This business can be successful if you have a good taste for quality and the zeal to see intending couples fulfilled when they visit your site.
Aside from the quality of service, nothing sells this type of business like customer relations, so relate well with your customers to understand their needs.
Financial capital needed
It doesn’t take much capital to start. You certainly need to have a laptop, a website with a payment gateway, carry out social media marketing campaigns, and create business cards, etc.
Starting Cost Outlay
Item
Cost
Laptop
N150,000
Website with payment gateway
N150,000
Social media promotions
N10,000
Business cards
N5,000
Other essential tips
Get a website designer to build you a beautifully designed modern website with easy navigation, user friendly, and other features fit for a wedding marketplace.
Everyone loves to party, but very few are willing to clean up when the party is over. Such a reality is why an after-party cleanup business will thrive if you have the passion and the will to get your hands in soapy waters for money.
You may start gradually by asking friends, family, and colleagues to pay you an affordable fee to clean up and sort utensils, bottles, and other items for them after parties. It may not sound so Nigerian, but many people who clean up after their party wish they had a professional they could pay to do help with the dirty chores.
Small in-house parties are an excellent way to start until you have built momentum to take up more significant projects.
What you need to get started
Determination: The early days of this type of business may not boom like the other businesses you may know, and so, you need to determinedly keep doing what’ it takes to grow the business.
Note: If cleaning isn’t your thing, then the party cleanup services businessisn’t for you.
Trustworthiness: People are careful about the people they let into their homes. You need to find ways to radiate integrity and reliability for this business to scale.
A good reputation is the silver bullet in this type of business. Your customers should find you dependable, always.
Team: When picking your team of cleaners, make sure they’re people of integrity if you do not want the gavel of judgment to come down heavily on you.
Banking on your integrity alone isn’t enough because any team you take to a job represents your business.
Your team members should, therefore, appear professional and equipped to improve on your brand’s equity – representing all that you project to make your clients feel safe.
Time management: You should, and must project to be very efficient – your party cleanup service should be able to manage time as your profitability mostly is often tied to your time-management ability. If you have three jobs in a day, you shouldn’t spend the entire day on one job post.
Customer relations: How well you relate with your customers determines how far the business will go. People will need recommendations from people they know before hiring a party cleanup service.
Those online recommendations might look fake to people, but what your customers say about your brand is what it is.
Insurance: You need to have some indemnity cover on your business to help cover liabilities that might occur in the course of executing your trade.
Cleaning products: The products you need to clean up a place can be from you or the client. Some clients are allergic to some cleaning products, which means you have to ask them.
Here are some products you should have:
Brooms
Mops
Window cleaner
Brushes and dustpans
Latex gloves
Toilet brush
Toilet cleaner
High duster
Vacuum cleaner
Extension cord
Disinfectants
Feather duster
White rags
Paper towel
Waste bags
Suggested Reading: 14 Steps to Start and grow a profitable business in Nigeria
Register the business: People trust a registered company, especially when it involves going into their private space.
Marketing: Offline and online marketing strategies should be employed. Paid social media promotions are a great idea, but don’t forget that telling people your services offline pays too.
How to keep this business idea successful
Keeping a business like this successful has a lot to do with consistency and persistence. The more you offer exceptional service to your clients, the better your portfolio.
Finally, have a good team working with you.
Financial capital needed
Aside from the vacuum cleaner, every other cleaning product is quite affordable in the market.
Many people find it hard to put the right gift items together for their parties, with many not knowing where to get the right gift items.
Gift basket service is an art some people do for fun without the expectation of being paid. Some people gifted with the creativity of putting together gifts items, especially ladies, would do this for their friends as favors.
As an entrepreneur, what I see in most scenarios are business opportunities. Looking for business opportunities wherever I find myself has become second nature. I expect that you’d also develop yourself to that point.
Train your business mind to figure out how best to turn that fun activity into a money-making venture.
As simple as gifting items sounds, not everyone is good at it, and not everyone has the time to do so.
If you’re a creative genius in crafting, packaging, and delivering gift items, consider this business idea. The gift basket idea is one that full-time housewives/homemakers would be able to do with much ease.
What you need to start this business idea
Creativity: Anyone can go to the gift store and pick gift items; indeed, not everyone can be creative about it. People are willing to pay for your creative ability to make the gift unique and valuable to the recipients.
You have to think outside the box to show your uniqueness.
Do note, however, that creativity increases with practice and on-the-job experience over time.
Craftiness: Craftiness is what most gift basket service in Nigeria lack. You mustn’t buy everything needed to deliver a gift basket to a client.
Some times, the client’s request will demand you to be crafty to create one of the items yourself. It’s an edge you’ll have over your competitors.
The art of presentation: There’s no doubt that an expensive and creatively packaged gift basket can mean less when poorly presented; Presentation says so much in this business. Gift baskets for different occasions have beautiful ways you can present them.
Enthusiasm: Make sure you’re very enthusiastic about putting smiles on the faces’ of the gift baskets recipients. Remember, it takes a cheerful countenance to makes someone’s occasion special.
Register the business: Companies like to patronize registered businesses. Registering your business makes it a legal entity.
Marketing: Your marketing is majorly through the fantastic jobs you’ve delivered. Your clients’ satisfaction is your gateway to more prominent gigs.
Maximize social media platforms to enhance your online presence.
How to keep this business idea successful
Keeping your gift basket service business is achievable through exceptional customer service delivery. Don’t post a gift basket online and deliver something else offline. People are wary of online gift basket services because of this particular reason.
Integrity plays a crucial role in this business’s success. Improve your craft by watching DIY YouTube videos. And ensure to always deliver more than expected of your clients.
Financial capital needed
It takes almost nothing to start since the clients will be paying for the gift baskets. As you grow, you can add a website and pay for your social media campaigns.
Starting Cost Outlay
ITEM
COST
Social media promotions
N10,000
Website
N35,000
Business registration and reservation of business name
N15,000
Business cards
N5,000
Other essential tips
You should partner with event planners, flower shops, etc.
Practicable minimum startup cost = N45,000
PAMPER PARTY BUSINESS IDEAS
Also known as a pampering party, a pamper party is a party where people get their body massaged and enjoy beauty treatments while relaxing with family, friends, or colleagues.
You might consider this business idea if you have magical hands and a good knowledge of beauty treatments. Better still, if you could partner with someone that does.
You don’t need to have an office space since you’d be meeting your clients in their houses or hotels.
Events such as bachelorette nights, baby showers, birthdays, and engagement parties are days when some ladies would love a good massage and beauty treatment.
What you need to get started
Massage skills: As a masseuse/masseur, you need to have excellent massage skills. There are many beauty spas you can train to improve your skills.
When it comes to the human body, people want to feel safe with whoever is handling their body.
Certification: You may not need this to massage friends and family, but some clients may want to be sure that you know what onions mostly with some certifications. As you start, have it in mind that you need to be certified to scale.
Products: For a start, you need a massage table, reclining chair, beauty treatment products, and pedicure and manicure stations. There are other equipments used for a pamper party service, but you’ll have to get them with time.
Businesses registration: Get the business registered to boost your credibility and make your clients feel safer with you.
Customer relations: Friendliness and gentility are essential when dealing with your customers. Give your best to every client you get to pamper and watch your ratings increase.
Marketing: You’re to promote your service both online and offline. Do your best to leverage Offline marketing as much as possible and engage more of mouth-to-mouth marketing as it will resonate more with your offline contacts. Tell your family, friends, and colleagues that you are a masseuse/masseur.
Leverage online platforms like Facebook, Instagram, and Twitter to build your online clientele. Just ensure targeting your marketing efforts in ways that aim to get prospective clients from your geographic location.
How to keep this business idea successful
When people hear the word “Pamper party,” they tend to think it’s for the rich. And this is an impression you should change through your marketing strategy.
Promote your services in such a way that almost anyone can patronize your services. Create different packages and offer a discount when the clients based increases.
Try your best to use the right beauty treatment products. Ladies do not joke with their bodies, so avoid any product that can devalue your services.
Sell your services wherever you find yourself by talking about the solutions your products and skills will bring to people.
Financial capital needed
For a beginner, you don’t need to own all the equipment, but if you are to be effective, there are necessary products you ought to have. If you’re not financially buoyant enough to get new equipment, you can go for fairly used.
Item
Cost
Massage table, towels, robes
N135,000
Fairly used massage table
N80,000
Portable pedicure and manicure massage
N40,000
Beauty products
N12,000
Business cards
N10,000
Social media promotions
N10,000
Business registration and name retention
N15,000
Other essential tips
Partner with hair salons and local hotels around you. Practicable minimum startup cost = N150,000
Renting out party supplies is a very lucrative business that requires little or no training. All you need is to have the necessary supplies people need for their parties.
The party supplies rental business idea entails owning party supplies and renting them out to event planners or end-user customers.
It is capital intensive, but you can decide to start small with what you have. After all, some big rental companies don’t have all the supplies.
It will also require you to partner with those that have some supplies you don’t have. It will reduce your profit, but that’s the best option if you want to start small and grow. The reality is that you may never start if you wait to have all the supplies before starting. Some prominent people in the business began with small party supplies until they were able to own their supplies. It would help if you had enough patience to see it through.
What you need to start this business idea
First of all, you have to be able to identify quality party supplies. It’s expedient that you know what is in vogue; use them. Commit to working consciously towards the growth of the business because rental service takes time to pick up in sales.
Good knowledge of record-keeping is required to avoid losing your supplies. Take proper stock of all your supplies and make sure they are returned in good form.
Register the business to give it a legal identity.
Share the business idea with friends, family, colleagues, etc.
Display your wares online through social media platforms.
How to keep this business idea successful
You can be successful as a party supplies rental service owner when you treat your business as an essential service and run it as you run any other business.
Friends and family will like to use your supplies for free, don’t let them. Unless you make a profit and maintain healthy cash flow, your business would collapse.
Take collateral for every supply you rent out and adequately keep records.
Deduct the amount of any damaged supply from the collateral paid. You might also make your customers pay for the lateness in returning your supplies.
Financial capital needed
As stated earlier, it’s capital intensive, but you can always start from somewhere.
Item
Cost
Pots, plates, spoons, pans, glass cups
N50,000
Industrial gas cooker and gas cylinder
N100,000
Firewood stands
N40,000
Tables, chairs, table clothes
N150,000
Canopies
N150,000
Trays, cutlery, turning sticks
N100,000
Water drums
N20,000
Basins, bowls
N10,000
Business registration and name retention
N15,000
Printing on the items
N10,000
Business cards
N10,000
Practicable minimum startup cost for Renting Out Party Supplies = N650,000
Cleaning Services
Photo by Matilda Wormwood from Pexels
Laundry/Dry Cleaning
Fast-paced life in the cities has made laundry and dry cleaning business a prosperous one. Little wonder that it claims its spot on this list of the leading fastest growing businesses in Nigeria. People are so busy that they would instead outsource their laundry than to do it themselves.
Even the less active people hate to do their laundry themselves.
If you’re passionate about laundry and dry cleaning, this might be the business for you.
How to Start Laundry/Dry Cleaning Business
The first thing needed to start laundry and dry cleaning business is to be passionate about cleaning to come extent. Usually, laundry is a hated chore, so if you want to build a business empire out of it, you must be passionate about it.
It is also vital you understand the difference between laundry and dry cleaning. Laundry is washing clothes and other materials with soap and water, while dry cleaning is more technical. Dry cleaning involves cleaning without water; mostly with chemicals such as Perchloroethylene, Glycol Ethers, etc.
The above-mentioned difference between the two will require you learning the techniques. The best way to learn is by going to a physical laundry/dry cleaning shop for a few months. It might sound tasking, but there are tricks those professionals dry cleaners know that you might not know.
You can leverage some YouTube videos to learn the techniques needed to run a dry cleaning business successfully.
How to Keep the Business Successful
The best way to successfully run this business is by learning the ropes and going professional. Just because it’s fast-growing doesn’t mean you should jump into it without equipping yourself with the needed skills and knowledge.
Tell people about your business and the value you’re giving to them. You must be ready to bring something new to the table. You should be able to answer prospective customers’ questions on why they should use your services.
People are entirely mindful of their clothes. They may not like doing the laundry themselves, but they’re concerned about who’s doing their laundry.
Use social media to your advantage. You mustn’t have a fat bank account to push your business on social media platforms. You can start with Facebook, where you have friends, relatives, former colleagues and former schoolmates. You can run Facebook promotions on your business page with 1,500 Naira.
You can later extend to Instagram and Twitter. If you can’t create time to manage your business pages yourself, some influencers can help you out for a token.
You can register the business name with the CAC for only 5,000 Naira. People trust registered businesses more than unregistered ones.
Do all that’s needed to put your business out there.
Financial Capital Needed To Start Laundry/Dry Cleaning Business
How you start depends on your capital. The beautiful thing about this business is that you can start from your house with some essential items needed for laundry/dry cleaning. If you intend getting a shop, it will cost you more depending on your location.
Here are some things you’d be needing to start a laundry/dry cleaning business:
Item Needed
Cost Price
Washing machine
50,000
Dryer
98,000
Iron board
30,000
Electronic iron
6,000
Hangers
15,000
Pegs
3,000
Buckets
2,000
Basins
3,000
Laundry soaps and detergent
3,000
Brushes
4,000
Garment conveyor
25,000
Bleach
1,000
Power generator
85,000
Banner
10,000
Stickers
5,000
Business name registration
5,000
Social media promotions
5,000
Other essential tips to effectively run a laundry/dry cleaning business:
If you have a car, you can add “Pick and deliver” to laundry business. Customers prefer a laundry service coming to pick up their clothes and return them.
It’s a competitive advantage if you have a car and employ other hands.
Find out what your competitors are charging and know how to fix your prices.
CAR WASH
The increase in the number of busy car owners is making car wash business more profitable. Many car owners would prefer to take their vehicles to the car wash for thorough washing instead of washing their cars themselves.
This article writes on all the key essentials that you must consider before you start your car wash business – one of the leading fastest growing businesses in Nigeria.
The most exciting thing about the car wash business is that you can start at any scale, even small.
You don’t necessarily need to have big washing equipment to kick it off. With little capital, determination and hard work, you can scale that business into something big.
How to Start A Car Wash Business
Learn about the business before jumping into it. Many startups fail not because they weren’t profitable, but because the owners didn’t take time to learn about the business.
There are tricks in every business you’ll have to learn in order to excel.
Choosing the right location for the car wash is of utmost importance.
A majority of car washes are situated close to the roads. It would help if you situated your business close to your customers. Seek an open space close to a significant or busy highway.
Get the right equipment. As a starter, you mustn’t have ample equipment, but there is some essential equipment to have. We’ll be looking at some of the equipment in the starting cost outlay.
How to Keep A Car Wash Business Idea Successful
First of all, you need to have the foresight to be able to keep it thriving. Have a well-thought growth map you’re working with.
I’ve also noticed that having a sitting area where your customers (A lounge or something similar where car owners) can sit and chill while you wash their cars will increase your customer base—adding something like a lounge or a minibar to the car wash will improve patronage.
The location alone won’t draw customers. You have to market the business every chance you get, aggressively. Tell friends, family, colleagues, neighbours, cliques, and every car owner you meet about the services you offer.
Collaborating with auto repair shops, barbershops, salons, and other businesses around will help boost your clientele.
Employing experienced car washers is very important. It would help if you had a team of professionals with integrity around your business.
If the cars are thoroughly cleaned, your customers are more likely to come back.
Financial Capital Needed For ACar Wash Business
How much you need to start depends on how big or small a car wash business you’re creating. You can start with small machines in a not so ample space.
Item
Cost
Business name registration
5,000
Rented space
250,000
Social media promotions
5,000
Car wash machine
100,000
Water (Borehole)
400,000
Water tanks
45,000
Water Hose
10,000
Power generator
100,000
Brushes, Buckets, towels
7,000
Robber boots and gloves
6,400
Soaps and detergent
2000
Blowers/dryers
350,000
Vacuums
40,000
Perches
30,000
Prep guns/pressure water
100,000
Other Essential Tips To Aid The Car wash Business
Strategically partner with barbershops, salons, eateries, spare parts dealers to increase your customers. Use social media to create online awareness for your business.
You may also wish to start a membership subscription plan.
Poultry farming is a very profitable business, and that’s why it is speedily climbing up the fastest growing businesses in Nigeria ladder.
Unlike what many people think, poultry farming isn’t only about breeding chickens or egg production. There are four significant activities and possibilities with Poultry farming:
Layer breeding
Broiler breeding
Poultry feeds production
Poultry equipment production.
Poultry farming, as a business is broader than people think. And that’s the reason it’s essential to understand whichever branch you decide to venture.
Know that every branch is profitable, depending on how you run and manage the business.
Why’s Poultry Farming a Thriving Business?
Considering the profit poultry farming yields, it is only logical to understand why it’s thriving. The increase in the consumption of white meat which includes chicken, turkey, duck and other birds fall into is due to the health implications red meat has. All age groups consume white meat, unlike red meat. Apart from that, it’s affordable and readily available.
How to Start This Business Idea
The first step to take when starting this business is to take time to learn about the business. You might think breeding chicks and layers is all about feeding them, but that’s not the case. Have it in mind that one single mistake can lead to the death of thousands of chicks. There are tricks in every business you have to learn to succeed, know them.
After researching and learning about the different branches of poultry farming, you have to decide if you will be breeding chicks, breeding layers, or both. This decision is a result of the knowledge you’ve acquired from your trainer. Specialize in the area you’re good at.
Set up the poultry farm. This can be done in your house, rented land or acquired property. It depends on your budget. But wherever you choose, make sure it’s conducive for the chicks, layers and eggs.
Another factor to consider when setting up your poultry farm is your access to water, power supply, motorable roads.
Structuring the farm can be done in three ways:
Fencing system: This is a poultry farming system where the birds freely roam around in a fenced area fending for themselves. This structure isn’t advisable for a business.
Sawdust system: This is a poultry farming system that use sawdust as the main cage system. It allows the chickens to move freely. It’s imperative to change the sawdust regularly to prevent the spread of diseases.
Caging system: The is the most common system when structuring a poultry farm. Birds are caged according to their sizes.
Buying of equipment depends on the structure of your poultry farm. We’ll look at the needed equipment and their prices in the starting cost outlay.
When buying the chicks, make sure you’re buying from trusted dealers. This is one of many perks of being trained by a professional. You will be able to different healthy, malnourished and unhealthy chicks.
Already prepared feeds are highly recommended when you’re just starting. As you progress with time, you’ll be able to produce the feeds yourself.
All things being equal, your turnover will depend on your marketing strategy. You are to build a network of retailers before your first harvest. Market to the retailers around your area and let them know when the products will be ready.
How to Keep A Poultry Farming Business Idea Successful
The business will be successful if you don’t make crucial decisions from a greedy point of view. Start with a few chicks and see your progress. You don’t test the depth of a river with both feet.
Employ helping hands if you are breeding more than 400 chicks. Poultry farming requires utmost attention, so don’t give the business less attention.
Aggressively market the business to friends, family, colleagues, neighbours, retailers, food vendors, grill vendors, etc.
Financial Capital Needed To Run Poultry Farming
You can start with the sum of 100,000 with a well-structured cage. You’ll increase the chicks as time progresses.
Item
Cost
Business name registration
5,000
Banners/stickers
15,000
Social media promotions
5,000
Leased land
100,000
Feeders
12,000
Chicks (N200x40)
80,000
Waterers
30,600
Cages
92,000
Incubators
48,420
Nests
50,000
Coops
50, 000
Waste disposal
25,000
Brooders
55,000
Perches
30,000
Power generator
100,000
bags Feeds (10)
30,000
Other Essential Tips
To breed healthy birds, you must employ the services of a vet. A vet will advise you on what to do to make the birds healthier.
Partner with eateries, beer parlours, cuisines and local kitchens to provide them with fresh eggs, turkeys, and chickens.
Cassava Farming Business Ideas in Nigeria
Cassava is the source for most of the food Nigerians eat. Fufu, Garri, Abacha, Amala, Cassava flour, etc. are the products of cassava. And this has made cassava farming a fast growing business in Nigeria. Aside from the products being locally consumed, it also serve as foreign export since Nigeria produce cassava in high quantity. Statistics have it that 24 out of 36 states in Nigeria grow cassava.
Cassava production might sound like a huge task, but it’s one of the easiest things to plant. The quantity you’re planting is where the work lies.
Before choosing a location, it should be perfect for cassava farming. Go for fertile land that is well-drained. You won’t be able to tell the real nature of the soil, and this is why you should take the soil for testing to find out if it will favour cassava farming.
Check for the following:
Adequate rainfall, sunshine or access to water
Landscape topography
Proneness to pest invasion
Proneness to soil erosion
Choose Cassava Stems for Planting
Understand that planting cassava for private use is different from commercial planting. When planting for private use, you may not be so particular about the stems you’re planting, but this doesn’t apply to planting cassava for business. In planting cassava for commercial use, you have to consider the stems to know if they are high yield stems.
Different cassava stems don’t grow well on the same soil. After testing your soil you should have better knowledge of the kind of cassava stems the soil can accommodate.
Check the stems for the following:
The quality of the root they produce.
If the stems are healthy and fast-growing.
Whether the stems have a strong resistance to pests.
Rapid and rich growing stems for commercial cassava planting
NR 8082
NR 8083
TMS (2) 1425
TMS 30572
TMS 81/00110
Prepare the Soil
Well-prepared soil aid the growth of healthy of the cassava.
How do you achieve this?
Adequate use of manure and fertilizer.
Prepare the soil for irrigation because you can’t be too sure about rainfall.
Prepare the ridges to prevent rain from washing away the soil.
Prepare For Cultivation
You’re to prepare for cultivation from the very first day you planted the stems. It is highly recommended that you take good records of your activities to help you know the next step to take.
Before preparing the land, you’re to apply herbicide on the soil. Liming is also another thing to do during land preparation. You’re to apply agricultural lime of 5 (50kg) bags on the stems and land.
Plant the Stems
The Nigerian time for cassava planting is April. It takes 6-7 months to harvest early-maturing cassava, while it takes 12 months after planting the stems to harvest late-maturing cassava. It is advisable to apply fertilizer to the soil 8 weeks after planting the stems.
Weed the soil regularly to make sure the stems aren’t chocked by weed.
Harvest the Cassava
The best way to know that the cassava is ready for harvest is when the leaves turn yellow and fall to the ground, and when the root (cassava) is mature. To harvest faster, cut off the stems and preserve them for another planting season.
You can carefully use hoes to dig out the cassava root from the soil.
Marketing Cassava Products
You can either sell the cassava in its raw form or process and sell it yourself. Whatever you decide to do, make sure you have built a network of buyers for your product. There’s a big market for cassava products in Nigeria, so it won’t be that difficult to sell.
How to Keep The Cassava Farming Business Idea Successful
Your success is dependent on many factors, but you must have adequate knowledge of the business. Cassava makes our list of the leading fastest growing businesses in Nigeria because of many factors, one of which is her success rate amongst Nigerian farmers. Little wonder we are a leading producer of the tuber in the world.
Take time to learn the business by visiting cassava plantations and ask the farmers in charge questions.
Learn about the market for your product and how to sell them.
When you’re applying any chemical on the land or cassava stems, do it rightly. Wrong measurements can cost you a lot.
Have a senior in the business you consult in case anything goes wrong.
Financial Capital Needed To Start Cassava Farming
Cassava farming is capital intensive. You have to own or lease a plot of land to do this business.
As a farmer, you’ll be needing all the patience and consistency you can get to make something out of this business. Learn how to store and preserve the products and get ready buyers before harvest.
Conclusion:
These businesses are not on this list of the leading fastest growing businesses in Nigeria by accident; they are easy to venture into, highly profitable and with minimal risk.
Do you know any other business that is worthy of this list? Please give your suggestion using the comment section and I will write on them.
Making money is easy, it starts with just one simple yet very important principle – The desire to make money and the faith in yourself to make money.
A lot of people want to make money but lack this fundamental principle, so they look for the easiest of ways out of their quagmire – they engage in many unholy and unhealthy things just to make money.
This article is an answer to your question. It is packed with a lot of business ideas to help you make money. Some, with as low as N30,000 you could be smiling to the bank at the end of about 3 months of dedicated work on the idea you choose.
You may, like so many others who read this, be in search of small businesses to invest in. I would ask that you also read my post on How To Start A Business In Nigeria. The article will help you make the right decisions on company registrations, etc.
Due to my small business consulting background and training, I’ve had a lot of people ask me questions related to Small businesses in Nigeria. Some of such business-related questions are –
And many of such questions keep getting to me through emails, phone calls to my consulting agency, seminars, etc. I have, therefore, in response to these questions, created this article with these business ideas with the hope that it would give answers to at least one of your many questions.
It was designed to take the form of a mini business plan, and in categories.
You are here because you want to learn how to pitch to investors as a Nigerian entrepreneur, you have made a brilliant choice.
Many budding business owners have exciting ideas on ways they plan to change the world. However, the vast majority of them do not get the right business funding. These ideas never develop into successful projects because a large number of entrepreneurs give up on their ideas. It is critical to note that there is a big gap between having a great business idea and fully executing it.
In entrepreneurship, success is often attributed to your team’s ability to execute right.
Most entrepreneurs think it is about the idea. While you invest a large chunk of time in preparing the business plan and fine-tuning your idea, it is also essential to think about how to get funding. This article here talks about sources of funds available to the Nigerian entrepreneur.
Entrepreneurial success has a lot more to do with the team than the idea; the team executes, and investors love investing in formidable teams. It is your ability to execute that brings the desired return on investment.
Talking about execution, it is a wise practice to personally invest financially in your company, and at most, compliment your funding drive with angel investors.
Investors the class of venture capitalists want to be sure that you have honed in on your execution skills and that the product has been validated in the market before they invest – they love being within their comfort zones. They want to know that you are thoughtful, fast, and efficient and that you can sustain the project from inception to the targeted goal.
To attract such investors the likes of venture capitalists, you put together a pitch worthy of their time; they love seeing projections in terms of figures. Try to take your cue from investment programs like the Shark tank, dragons’ den, etc. It is not an easy feat to get others to invest in your company.
A great pitch is a mix of personal and business factors. Whomever you are pitching, a partner, customer, or company, you have to appeal to them on a personal and business level. Without this, your pitch is bound to fall flat.
A great pitch is concise. Most of the time, you have just a few seconds to gain someone’s attention and get your point across. Also embrace focus and momentum, your best shot to nailing the pitch.
A great pitch is value-driven. Most investors are mostly interested in ‘how’ your business idea will add value to them. Instead of focusing on features, your pitch needs to strongly highlight the value it will offer both you and the investor because it should be mutually beneficial.
Presentation Tips
Image Source: Grand Capital Investment Limited
If you are like me, your first time with an investor might be your first time having to make any presentation whatsoever. A good presentation must have certain elements. Here are some tips to guide you.
Be Confident, not Arrogant: Most rising entrepreneurs tend to be ambitious but unrealistic. This is where they need to find a balance between the two microcosms. To get the desired return on investment (ROI), entrepreneurs need ambition, coupled with a realistic approach to how the targeted investment will be maximized. Erika Ashley, a social media influencer, marketing consultant and TEDx speaker, says it’s vital to prepare for a realistic presentation experience. Having realistic expectations will aid you when preparing. When practicing your pitch, prepare for interruptions because most investors will likely interject while you are still presenting, and this can throw you off balance.
Use WHEN not IF: These two words can be tricky. Using ‘If’ in your presentation is a telltale sign that you lack confidence, and if you don’t show enough self-confidence, how do you expect investors to support your business idea? Instead, use ‘When’; it shows that you are in charge and capable of implementing the venture you are pitching.
Be Creative with Your Pitch Deck: Take time to design a concise pitch deck. Your pitch deck functions as a guide and visual reference point to the potential investors you are pitching. There are free pitch deck templates for PowerPoint that can assist you in kicking off the presentation. There are a large number of tools that can also aid you in creating a striking presentation.
Factors That May Affect Your Chances of Attracting the Investors You Pitch To
The Scalability of Your Idea: Typically, about 75% of venture capital-backed startups fail. With that fact in mind, most investors, especially venture capitalists lookout for investments that are very scalable; such that once it succeeds, they would have the chance of covering their investment portfolio at scale.
The team: Typically, you do wear many hats as an entrepreneur. You most often start out as the person in charge of the technical, marketing and financial part of the business. Note that your ideas are worthless, and no entrepreneur knows this as much as an investor. Investors invest in the team, not the idea.
It is the team’s collective strength that investors watch out for. It is one of the major factors that let them dig into their money bag to invest in your venture. So, ensure that you build a solid team.
Exit Strategy: Every investor wants to see an exit plan. The exit plan tells an investor amongst other things what his return on investment likely is, and how long the investment needs to take to get to the exit point. Ensure that your exit strategy is foolproof and well-articulated.
For every 10 small business ideas you have, one is the best. One will never work. And the outcome of the other eight lie in your execution.
A good idea couldn’t stand alone. Its success lies in your execution and all the functional and creative skills you’ve gathered along the way.
As entrepreneurs, we may lack capital and resources. But we’ll never lack the ability to think differently – To have ideas.
Entrepreneurship is tough, so much so that there is an age-long ongoing debate with particular interests on how and where entrepreneurs draw their strengths.
Some opined that entrepreneurs are born, while others believe they are made; forged from the scenarios of hard work and grit.
Whatever the case, entrepreneurship is all about solving problems and creating businesses ideas out of the solutions proffered.
While most are either gifted in finding solutions to problems and challenges, others are not – They were trained and mostly supported by the experience of other service providers; such are mostly leaders who have mastered some effective team-building skills.
So if you want to go on the entrepreneurial journey, this article is a compilation of a list of small business ideas to help you start your journey rightly.
Entrepreneurship is a challenging marathon, and statistically, many business owners fail to attain sustainability. But trying to achieve sustainability and then profitability is only a mere strategy challenge once you have the right business idea and an effective team to run with.
At ExpertsNG, we acknowledge that it can take a significant amount of time to come up with the right small business idea you could execute with your current team and capital level, so we’re compiling the ultimate list of 500 small business ideas to help you speed up the process.
Below are links to different small business ideas, classified by their different sectors
A ready source of capital is an essential resource for any enterprise, a crucial aspect of building and sustaining any business for growth and maximum profitability. It is one of the major unique business challenges faced by most entrepreneurs.
Luckily, there are several available sources of capital and funds for small businesses, especially in Nigeria.
Considering the high-interest rates charged by Nigerian banks, business owners – startups and small businesses, find it hard to raise the required funds to get their businesses off the ground, especially within Nigeria.
Sourcing for funding doesn’t have to be a daunting task. However, a large number of business owners seem to find themselves stuck because they believe they can’t access funds. It is imperative to understand the basics of raising capital as it might mean the difference between entrepreneurs that successfully raise capitals, and those that do not. In order words, it could be a critical key to the success of your business.
At this point, it would be safe to let you know that not all types of funds are healthy for your business. It is, therefore, imperative to understand the dynamics of the different forms and sources of funding available to you as a business owner in Nigeria; their likely effect on your business, expectations of the owners of the funds, etc.
When sourcing for funds, certain steps are needed to attract the type of fund you need and more importantly, to get it from the right source.
In this article, we have listed the various sources of capital, sections on applying for grants from about N1.5 million and up to tens of millions.
Here is an Overview of Seven Typical Sources of Capital for Small Businesses
Having a single source for funding is not advisable regardless of the business strategy you intend to execute. This is especially true when it comes to financing your new business.
Listed below are generic sources of funds for businesses, especially startups.
Personal Investment
As an entrepreneur, one of the first ways to demonstrate confidence in your ideas is to invest your personal time and money into it. That is one of the first considerations other investors, friends and family give to your business to determine their likelihood of investing in you and your business. It typically signifies your level of commitment or lack of.
When considering self-financing your business, think of the following channels as viable Sources of funds for small businesses:
Personal Savings
Sourcing from your piggy bank is one of the easiest ways to finance a small business. Using your own cash is not only impressive but it also shows other potential investors your level of commitment to the venture. This can immensely help to gain additional funding from third parties, your personal savings is one of the major Sources of funds for small businesses, today.
Sell Personal Assets
Perhaps you may want to sell your stocks, real estate, bonds, and other assets in order to raise money to fund your business. Selling assets for cash is a time-tested way to raise money, but there can be tax implications linked to selling certain assets, especially real estate and stocks. Be certain to take that into account.
Family and Friends
Family and friends have proven over time to be a resourceful helpline for small business owners especially when you don’t have the track record to convince a bank to lend you money. Your family members and friends are easier to persuade compared to bank officials. Also, they are less likely to ask for stringent terms and high-interest rates or may not indicate any interest rates altogether.
A 2015 survey by Pepperdine University revealed that 68% of responding small businesses financed their business through support from friends and family. It is important to note that sourcing for funds from family and friends strings along with its own form of risks. Your relationships may suffer if the venture fails, or if it seems slower than anticipated to repay the loan.
Crowdfunding
Crowdfunding is another popular way of sourcing for funds; it depends on a system of generating small investments from a large number of sources. It is believed that it is easier to raise small amounts of money from many people than it is to raise huge sums of money from a few people.
There are different types of crowdfunding – Donation crowdfunding, Reward-based crowdfunding, Debt crowdfunding, and Equity Crowdfunding.
The donation crowdfunding includes sites such as GoFundMe, Indiegogo in which individuals donate without any guarantee of return on the money. Donors contribute based on the idea of supporting a good cause, a company they believe in or share values with.
Reward-based crowdfunding offers you something similar or a perk in exchange for the investment. A common example of this type of crowdfunding is Kickstarter.
To achieve optimum results from reward-based crowdfunding, it is important to set funding goals by determining how much you plan to source for with your fundraising campaign. Then create a reward strategy, an incentive you plan to reward the donors with for their contributions.
In Equity crowdfunding, investors give money to business owners in exchange for a percentage of ownership of the company; then after a window of time, the company repays the investors with interest in return. Most times the investors receive repayment or reward with interest within a designated period of time.
If you are a startup, equity crowdfunding is a smart way to go because it affords you the opportunity to raise larger sum of money from different investors than you would with the other funding opportunities.
This, infact is a major out of the available Sources of funds for small businesses, globally.
Angel Investing
Angel investing involves sourcing for funds from a high-net-worth individual who is interested in supporting the business to grow and expand. These investors offer startups with seed money, and the company gives them an equity stake in return.
It is believed that when the company becomes profitable, the investors can sell their shares for a profit. Also, many angel investors tend to provide more than just money. A high number of them are business owners; in addition to the funding, they often share their expertise, which can go a long way in defining the long-term success of the business.
Venture Capital
Venture capital firms invest directly in budding companies in exchange for equity stakes in the business. Most VC firms are partnerships investing firm money, and they tend to be greatly selective and often invest in businesses that are established and have the track record to generate profits.
VC firms invest in a business with the aim of cashing out their equity stake if the business eventually holds an initial public offering (IPO) or is sold to a larger existing business. To secure venture capital, the first step is to submit a business plan to either a venture capital firm or to an angel investor.
If interested in the proposal, the firm or the investor will perform a thorough investigation of the company’s business model, products, management, among other critical factors.
Venture capitalists tend to invest a large sum of money in just a couple of businesses. Most often venture capital experts also tend to focus on a particular industry. A venture capitalist that specializes in agriculture, for example, may have prior experience as an agriculture industry analyst.
Business Incubators
Incubators support startups that are still in the early stages of building their company. Most startups have an idea that can change the marketplace, but no business model to transition from innovative idea to reality.
Incubators are exactly what the name implies, and they are managed by venture capital firms, government agencies, with the vision of building new businesses through their earliest stages by providing marketing, networking, infrastructure, and financing assistance. Incubators function on an open-ended timeline.
They focus more on the longevity of the business than how fast the company grows. Incubators do not provide capital to startups and are usually funded by economic development organizations. They also don’t often have an equity stake in the companies they support.
Co-Creation Hub is a brilliant example of an incubator. Incubators invest time and resources into advancing local startups; they are generally tasked with creating jobs or finding ways to grow the business.
But they have less pressure to deliver startups that can grow fast, as fostering and supporting local startups is part of their mandate. Therefore, even a slow growing or less scalable business still attracts a good incubator.
To become part of an incubator program, a prospective business owner has to complete a lengthy application process. Requirements differ among various incubators, but the entrepreneur must demonstrate a strong potential for success.
Available Sources of Funding for Startups in Nigeria
Here are leading players in the Nigerian business space who have records of aiding a large number of startups in recent years:
1. Tony Elumelu Foundation (TEF)
This is entrepreneurship program is funded by a $100million commitment by the Tony Elumelu Foundation to empower 10,000 African entrepreneurs over a 10-year period. The goal is to create at least 1million jobs and contribute over $10billion in revenue to the African economy.
Through its flagship Entrepreneurship Program, the Foundation empowers African entrepreneurs and the entrepreneurship ecosystem across 54 African countries. The Foundation has empowered 7,531 entrepreneurs thus far, through the provision of small business grants to qualifies persons and businesses.
It is arguably the largest source for small business grants in Nigeria.
2. African Development Bank
The Nigeria Trust Fund (NTF) was created in 1976 by an agreement between the Bank Group and the Nigerian government.
The NTF is a self-sustaining revolving fund. Its objective is to assist the development efforts of the Bank’s low-income regional member countries whose economic and social conditions and prospects require concessional financing.
Its initial capital of $80 million was replenished in 1981 with $71 million. In 2008, the Federal Republic of Nigeria and the Bank Group agreed to a ten-year extension of the NTF. NTF resources can co-finance operations with the ADB and the ADF, as well as fund stand-alone operations, in both the public and the private sector.
Supplementary loans for Bank Group financed projects can also be considered.
3. Bank of Industry (BOI)
Bank of Industry (BOI) is one of Nigeria’s principal financing institutions and it provides long-term support to different industries and various sectors of the economy.
With the vision of providing financial support for the development of micro, small, medium and large businesses, BOI focuses on businesses that engage in manufacturing, processing, Oil and Gas, information technology amongst others.
It is the largest and oldest financial institution in the nation.
This is a grant offering foundation that supports local, national, and regional women organizations, working towards the empowerment of African women and the promotion and actualization of their rights.
Their aim is to strengthen and support the work of African women organizations. By amplifying African women’s voices and achievements, AWDF supports efforts that fight hurtful stereotypes, and promote African women as active agents of change.
5. Lagos State Employment Trust Fund (LSETF)
This trust supports Small and Medium Enterprises (SMEs) with ₦25 billion. The fund is divided into two categories: micro and small businesses or the micro category. Businesses in this category can access up to ₦500, 000 loans with an interest rate of five percent and a tenure of one year – this is mainly geared towards youth entrepreneurship support.
The small business category businesses can get up to ₦5 million for a tenure of three years. The criteria for accessing the funds include: membership of a business organisation that will recommend the business for the loan, Lagos State tax receipt for at least six months, and Lagos state residency card. Till date, up to 8,000 businesses have received over ₦6 billion from LSETF.
6. Development Bank of Nigeria
Development Bank of Nigeria (DBN) is a bank owned by the federal government of Nigeria and assigned with the task of catering to the financial challenges faced by Micro, Small and Medium Scale Enterprises (MSMEs). DBN was launched on the 23rd of March, 2015.
The federal government launched the DBN to see to it that Nigerians put their creativity to full use. While youths have complained (time after time) about the unemployment rate and the lack of opportunities, the Federal Government listened to these pleas by creating this avenue for creativity.
The plan was to allow financial inclusion for youths and older adults who have limited opportunities in terms of converting their dreams to reality.
Basically, “you got a dream—get it across to DBN”.
The loan repayment plan of the DBN is quite flexible. The tenure lasts up to 10 years, coupled with a period of a moratorium of up to 18 months. Also, the interest rates are on a fully sustainable and market-conforming basis. Hence, this makes taking a loan from DBN about the best loan-taking option for Nigerian entrepreneurs.
