Factors You Should Consider in Starting a Business in Nigeria

Factors You Should Consider in Starting a Business in Nigeria

Factors You Should Consider in Starting a Business in Nigeria – Nigeria is a country that is blessed with many skilled individuals and also with resources that will help you establish a long lasting business but sometimes the problem is how you can use these resources in starting up a successful business in Nigeria.

Presently in Nigeria, the unemployment rate is alarming and many individuals are leaving the corporate world; some individuals are now self-employed and others are looking forward to starting up their own business and being their own boss. Well, the thing is a large percentage of these businesses fail in their first to third year because of a number of reasons. You might have enough capital to run the business and lack the technicalities. There are two things involved in starting up a business, its either you succeed or you fail.

To some people, starting or owning a business is about profit, well you are not far from the truth but this ideology is wrong and if you start up a business in Nigeria with that mentality, you might make profit but the business will not be a long lasting one. We are not saying your business shouldn’t be profit oriented but you should be more of customer oriented if you want to create a legacy.

Also, before you think of starting up a business in Nigeria, you will have to consider a lot of factors and most importantly, the impact of the economy of the country on your business. You are lucky to see this article as we are going to be revealing some factors you should consider in starting up a business in Nigeria.

These factors are going to guide you in making any decision regarding starting a business here in the Giant of Africa. Regardless of the economy and situation of the country, it is still the home for some foreign investment and it still boast of a tangible number of entrepreneurs and you can hop on this train by considering these factors we will be highlighting before you embark on your journey.

Without further ado, let’s go straight to the point…

Factors you should consider in starting a business in Nigeria

  • What do you know about the business?

You cannot start a business you know nothing about. For you to start up a business in Nigeria and expect it to be a success, you will need to have a great knowledge about what you want to do. The reason many individuals do not consider starting up a business is the idea that every market has been occupied and so they have nothing new to bring to the market.

Before you think of starting up a business, you will have to gather a lot of knowledge about what you want to do. You can reach out to other entrepreneurs in that line of business, read books so as to get yourself equipped for the business you want to venture into. It is not going to be easy starting up your business and in some cases; you might fail at you first trials or even subsequently but the determination and focus on what you want keeps you going.

Try to get a lot of experience on the business you want to venture into especially if you don’t have an experience; it will help you know what to do when you encounter problems. Seriously, knowledge is power and if you don’t know, you don’t know it. You will have to learn about it and gather knowledge.

  • How much passion do you have for the business?

One thing is knowledge, another thing is passion. You must consider why you want to venture into the business you have in mind. Your passion is what drives you and definitely, you won’t want to venture into a business you don’t have a passion for especially in Nigeria as you are going to be frustrated and this will lead to quitting.

Every business entails risk and you cannot be ready for what it takes if you don’t have passion for what you want to do. Every entrepreneur that succeeded in Nigeria today had passion for what they did. The likes of Aliko Dangote, Innoson, Alakija etc. Let’s say your passion is your energy so if you are planning on starting up a business in Nigeria, you will have to be passionate about it in order to succeed.

  • Market research or survey

You will have to consider conducting a market research. A market research is about studying your prospective consumers’ demand so as to know how you would deliver quality products to them.  Every entrepreneur needs to conduct a market research before starting up any business venture and in Nigeria; you equally need the knowledge of the market and the consumers for your product.

Market research will help you get information about the market you want to operate in and also guide you on what to produce, how to produce and for whom you want to produce. Through this knowledge, you will know how to use your resources efficiently.

  • Having idea is not execution

You should know that it doesn’t just stop at having a creative idea, you have to be innovative. You have the idea that could be a game changer but if you don’t implement it, you haven’t done anything and mind you, you are definitely not the only one thinking about that idea. So it is innovation that makes your idea a reality and that is why we said “idea is not execution”.

You have to critically think about the idea you have come up with and conduct a market research on how feasible it will be starting up a business venture with the business idea. Your idea could be great but unrealistic in Nigeria.

So when you come up with a business idea, you will have to look at it thoroughly before heading towards implantation or execution.

  • Location of the business

This is a very important factor of starting up a business in Nigeria. You will definitely have to look at the location of the business and see how it can help in the success of your business.

You will have to consider some things under the location of your business like:

  • The nearness to the market of your product
  • The nearness to raw materials if you use them
  • The commercialization in that area
  • The population of people in the area
  • The security of the area

All these we have highlighted are some of the things you should consider when picking a location for your business. The location of your business has a role to play in the longevity and success of your business. We have many cities in Nigeria where you can set up a business and it will thrive, you just have to be ready.

  • Prospective consumers or target market

You will have to look at your target market and that is why you need to conduct a market research and survey. This will help you get information about your target market and target consumers. You will have to look at the people that are going to patronize you in the area you have decided to set up your business.

The type of business you want to set up will determine the consumers you will have. It is very important that you research about the demand for the product or service you want to render before venturing into the business.

You will have to look at the income level, taste, age, population and demand of your target consumers before starting up your business in Nigeria. You will also need this information to help you come up with a business idea as you will know the product or services that are in demand and how you can penetrate the market as a new entrant even when there are lots of competitors.

  • The need you are meeting

Some people will refer to this as “the problem you are solving”, whichever, you are still on point. You will have to consider the problem or need you are meeting. Let’s tell you a secret “every successful business has a need it is meeting or problem it is solving”. You can check it out.

Don’t go too far, you reading this article means that you want a solution or answer to the “factors you should consider in starting up a business in Nigeria”. We are trying to solve your problem and meet your need. This is the pillar of every successful business.

So you will have to critically look at what you are bringing to the market to know if it is meeting any need or solving any problem. Your business will thrive when it is offering solution to problems of your consumers just like Globacom limited, that is solving the problem of communication in the country along with other communication networks.

  • Capital

Everyone knows that you cannot start up a business without capital and you should know that for your business to be successful, you will need large capital to complement other factors.

Before starting up a business, you will have to consider the amount you have for start-up, how you can get loan and other financial assistance. It is true that some businesses started with little or no money but the true is that presently in Nigeria, you need capital for you to start up a successful business. In as much as you need knowledge and expertise, you still need capital.

You can try to get an estimate of how much capital you will need to start up your business in whichever location you intend in Nigeria and you can do this during your market research.

Capital is not all you need in starting up your business but it is one of the important things you should consider in starting up your business in Nigeria.

  • The economy

Considering the economy of the country you want to set up a business in is very important and presently in Nigeria, you shouldn’t neglect this part. You should be fully equipped to deal with the fluctuations in the economy and see how you can flow with the tides.

Whatever business you want to venture into, large or small, you will have to understand the role of the Nigerian economy on your business. When we talk about the economy, you will be looking at the inflation level, fiscal policy, economic policy and many others. All these will help you know where and how to start up your business.

You might have a great knowledge of your business, know your target consumers and also have capital but still fail in the end; this might be as a result of not understanding the economy of the country.

Let’s give you a little secret here, if you want to start up a business in Nigeria, establish a business that creates job opportunities and also meet a pressing need of people; this way you are working in par with the economy of the country.

  • Time

Time management is one of the characteristics of a good entrepreneur. You have to use your time wisely and properly. You have to know what to do at the right time and do it too. Time is a limited resource and it is very valuable therefore, every second counts right from when you thought of the idea to when you execute it.

If you really want your business to thrive in Nigeria, you will have to dedicate your time and effort meaning that it is not going to be a part-time business; you are going to be running it full time.

You will have to plan yourself based on the time of your business and time you use in running your business. Avoid procrastination and learn self-discipline as it will help you in sticking to your business schedule.

Devoting your time and effort to your business doesn’t mean you wouldn’t have time for your family and friends, it just boils down to proper time management and it is a skill that you will need in starting up a business in Nigeria.

  • Competition

Every business has competition and you will have to consider the competitors in the market for your product and see how you can be at an advantage when compared to them.

As a new entrant into the market, you will have to be creative and innovative to know the areas your competitors are lagging so that you can fill in that space and get a hold in the market.

Another thing about competition is that it makes you better and experienced. If your competitors are doing well, you will have to know what they are doing and see how you can do better to penetrate the market. You know it is not going to be easy starting up a business with competition so you will have to understand the competition for your product and see how you can modify your product.

  • Profit

Profit is the word on the lips of most business men and it is normal because every business is established for the sake of profit. If your business is not going to be profitable, there won’t be a need to venture into the business.

If you want your business to be successful in Nigeria, you will have to see how you can minimize cost and maximize profit. But do not do this at the expense of your consumers. Remember that every successful business is not really profit-oriented but instead they are consumer-oriented.

  • Starting small

Many people do not believe in starting small but the truth is that you can consider starting small. Starting small has its own perks and one of the important perk is that you get to learn as you proceed.

We are not saying that you shouldn’t start big if you want to but starting small is more like a practical work to know what to do and how to proceed. You also get to use your limited resources efficiently when you start small.

You might pump in a lot of money into your business and in end, it yields nothing tangible in return so it is better you consider starting small. Try doing small things in big ways and take your actions one step at a time. As you proceed, you learn and become more experienced.

  • Working with a team

The importance of team work cannot be over emphasized and so you will have to consider working with a team as a factor in starting up a business in Nigeria. The team you build and work with has a way of influencing the growth of your business as they will input their knowledge and expertise.

It could be a team of family or friends for a start or if you have enough capital, you can consider bringing in expertise but you should know that for every business to thrive, it needs team work.

You wouldn’t have to do everything when you have and work with a team. The stress on you is lessened and also you can direct that time you were supposed to spend on a particular activity on something else that would be profitable to the business.

Another tip for you: do not be all knowing and try to give room for people to chip in their intelligence. It goes a long way to fast track the progress of the business. Don’t be a control freak if you really want to succeed in your business.

  • Business plan

Planning is very important in everything you want to do in life and in starting up a business in a country like Nigeria; you will surely need to have a business plan. A business plan is a document that shows in details, the identity or name, vision, mission and proposed actions of a business.

This plan shows where you are now and where you want to be later. For your business to succeed, you will need a great business plan alongside other things. You might have a great idea but this can amount to nothing if you don’t have a good business plan.

Your business plan is going to help project your business, it will contain an estimate of the proposed capital, the estimated profit and how you intend to get to where you want in the business.

Every business needs a business plan and for you to start up a business in Nigeria, you will need a business plan.

  • Be open to learning

No one is an island of knowledge and so, you will have to be ready to listen and learn. You learn from your mistakes and also that of others. One thing about running a business is that you learn every day and you should be open to criticisms. These criticisms make you stronger and better.

You have to be open-minded and also seek advice from successful entrepreneur to know how they made it to success. Learning is a continuous process and for you to be better at what you do, you will have to be open to learning. Learning increases your experience, expertise and knowledge.

You should be ready to change and follow the trend but know that you have to be unique and deliver a unique product so as to stay relevant in the market.

  • Branding and packaging

For your product to be different from that of others, your branding actually matters. The size, shape and packaging has to be taken into consideration that is if you are producing and if you are going to be rendering a service, you will have to be different from your competitors and also do things differently.

Your brand has to be unique and be what your consumers can easily reckon with. Remember we said that whatever you are doing must meet a need or solve a problem; therefore you will have to be creative and create a brand that gives you an edge over competitors. You will have to create an admired brand.

One thing that makes your business sell and progress in Nigeria is packaging. Even if you are dealing with an existing product or service, your packaging has to be top notch as this will build your confidence and loyalty your prospective consumers will have in you and your product or service.

  • Sale promotion

For your business to be successful, your marketing strategy has to be taken into consideration. How would you create awareness for your product? How would you bring your product or service to potential consumers?

Marketing is quite different from selling and you should know that the main aim of marketing is to make sales so you will have to consider your marketing and sale strategy.

A good marketing strategy will help increase your sales which will in turn increase your profit. when we talk about marketing strategy, we are talking about advertising, packaging, pricing etc. all these has a way of influencing the success of your business.

  • Pricing

This is one reason you will need to conduct a market research and survey. You will have to know the pricing system for your product or service to see how you can fix your price for your product or service.

It is a very important factor to consider when starting a business in Nigeria.

  • Having a website

You should know that the world is becoming digital and the internet offers you one of the fastest means to reach out to your potential consumers. You should consider creating a website for your business as it will help you reach out to a large number of potential consumers in little time with little effort.

It helps you to market your product easily and faster without stress. It is the new trend for most businesses in Nigeria presently and it would be nice if you consider this in starting up a business in Nigeria.

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