How to start a Business in Nigeria

This article will show you how to start a business in Nigeria. It was culled from Startup Nigeria.

This is one of the most comprehensive small business start up guide i have read in a while, and so i decided to republish it here, where it is most helpful. I also added some rejoinders and ideas also which is in italics. Enjoy yourself.

Starting a Business

Starting a small business requires determination, motivation, and know-how. Here’s a list of available resources to provide you with the know-how to have a successful small business startup.

1. Identify Your Business Opportunity

Choosing what kind of business to start can be an immobilizing task when confronted with the multitude of opportunities. Here at About, we have identified the hottest business opportunities to give you a few ideas. It’s important to determine where your passions lie and to understand your entrepreneurial personality type. So you think you have found the one business opportunity that will bring you freedom, fame, and plenty of profits? Does it meet the 8 simple rules?

But the most important point in Identifying a Business Opportunity is actually asking yourself this question: what do people need? what are nigerians looking for, that which they can pay money for? I bet you are going to get a million answers as you search deeper into your ideas.

When you get the answer to, then think about the product or service angle to employ. Are you going to supply them their need either as a product or service or even both? This will be critical for your business. You can access the various opportunities here so you have an idea what to offer for cash.

2. Build a Business Plan

For the majority of start-ups, a business plan allows you to gain a better understanding of your industry structure, competitive landscape, and the capital requirements of starting a small business. If business planning is beneficial, why do so few startups use business planning? Learn the critical steps to writing a business plan.

A Business plan can help you get a loan or funding from Corporate Organizations. Do not overlook this part. Note that a Business Plan can help you get that loan or funding for your small business.

3. Name Your Business

What’s in a business name? Everything and nothing. The right business name will help distinguish you from a sea of bland competitors, provide your customers with a reason to hire you, and aid in the branding of your company.

Choose a Business Structure: Find the best ownership structure for your small business. The most basic of all business legal structures is the sole proprietorship. Other possible structures include the popular limited liability company or a partnership.

4. Register Your Business

Starting a small business requires the usual paperwork and regulations. Corporate Affairs Commission (CAC) is responsible for this, for a small business start up you might not really need to incorporate the business as a Business name registration will do. Setting up your small business may require a business name registration to avoid embarrassment from local government authorities and to enable you get a a corporate account with a bank.

If you are just starting out, i advise you register just your Business name with the Corporate Affairs Commission. It costs around N4,500 – N5,000 to go about it. You will get your CAC certificate of registration of business name and the form 2 which you’ll need to open a business account with a bank.

5. Find Start-up Money

Contrary to popular belief, most small business start-ups aren’t funded by grants, venture capitalists, or banks. Your seed money will come from your personal savings, friends, family, and any other creative means such as bartering.

You can also get funding from Micro-finance Banks. It is a little bit easy getting micro finance loans presently but you have to start your business and be making profits monthly, no matter how small. Most of these micro finance banks will tell you to operate an active account for 3 months before you can apply for a loan. You can check out the Small Business Funding page for more information.

6. Determine Your Business Location

A 2001 Inc 500 survey revealed over 56% of the fastest growing companies were started at home. Discover what you need to make your home office design more productive. If home business isn’t for you, learn how sharing office space can aid your startup. Don’t forget to review the pros and cons of office space leasing vs. buying.

Another way to determine your business location is to identify your target market. Once you can identify your target market, then your location of business should probably be close to the market. If you are far away from your potential customers, you might be losing out on profits and patronage.

7. Get Business Insurance

(This might not really be applicable here in Nigeria, ask me why) As a new small business owner, you have the responsibility to manage the risks associated with your business. Don’t put your new start-up at risk without getting the proper small business insurance to protect your company in the event of disaster or litigation.

As stated in the opening sentence, it is not yet appllicable for small businesses because a small business owner in Nigeria who is a sole propietorship is required to handle all the risks involve in the running of his business. And moreover how many small business owners can afford insurance to cover their business? This would be for Large Corporations and conglomerates.

8. Create an Accounting System

Unless you’re a number person, the accounting and bookkeeping aspect of running your business can’t be avoided. Setting up your accounting will help you understand the financial aspect of running a business.

This is essential and effective to determine the inflow and outflow of cash. It also helps you know where you are putting money into and creates a financial plan for your business. You do not need to be an accountant to do that but if you can review your business and work out the financial implications on a regular basis, then you can build an accounting system thats unique for your business.

This was written for the business to business entrepreneur in mind but useful tips here also applies to online home based business owners as well.

Feel free to drop your comments or contributions below. Thanks.

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