If you are the kind who likes to be your own boss, or you have a unique business idea which you want to bring to life, then starting your own business is the right way to go. As exciting as this might seem, you have to take the necessary steps to ensure success at the end of the day.
This article talks about how to start a business in Nigeria in general, assuming you have all it takes to start and run a business, including adequate capital. Some of my future articles will discuss how to start and run small businesses with little money.
Starting a business in Nigeria has become easier in recent times, thankful to the advent of technology and government’s efforts in making it easy to start business.
1. Write A Business Plan
Like anywhere else in the world, the first thing to consider while starting a business is a business plan. The importance of a business plan can’t be over emphasized. Your business plan should not be a fancy document with only big pictures of your dream but a detailed plan of what your proposed business is and how you intend to run it. A future article will discuss in detail all you need to know about writing a business plan.
While writing your business plan, you must decide on the following
2. Choose A Business Location
Your business requires a location, regardless of what type of business you are doing. Every business has target customers and they are based in a location. Choose your location based on the kind of business you are starting and the customers you are targeting. Make your location closer to your customers as much as possible. If your business deals with production, you might want to consider other factors such as closeness to raw materials.
3. Decide If You Require a partner
A lot of people started their businesses without partners. But with today’s business environment, there is a big advantage to having a partner while starting a business. The number one reason you might want to consider having a partner is that a partner can complement your skills. This is often the case with businesses that require different skill sets. For instance one partner could be a technical person while the other is well grounded in business management. By bringing on a partner who has a skill which you don’t have, you would eliminate the need to hire someone. Though there are downsides to having a business partner, the advantages outweighs the disadvantages. You can always deal with the downsides by being professional in everything you do.
4. Raise Startup Capital
Your business requires capital, regardless of its size. You must decide on where it will come from before you start your business. Business capital can come from several places but you should know that as a new business, some sources of capital will not be easily accessible to you, such as loans from commercial banks. The number one source of your startup capital is your personal savings. As an entrepreneur, you should be able to have some savings, no matter how small it is. If you can’t invest your own money in your business, why should anyone give you their money? Your second source of capital is friends and family. If you can’t convince your friends and family to invest in your business, or if they can’t believe in your plan, why should anyone else do so? Then you can consider other sources of capital. These include angel investors, grants and small loans.
5. Decide On A Business Legal Structure
Before taking the step to register your business, you must decide on the legal structure you want for your business. There are three legal forms your business can take. These are sole proprietorship, partnership and corporation. The easiest of these is the sole proprietorship. You are the only owner of your business. You are your business and your business is you. Know that while this business structure is the simplest, it has its downsides. You will be liable for all risks incurred by your business such as debt. Another downside is that there is limit to raising of capital as a sole proprietor. if you decided to choose a partner in the above step, you will have to register your business either as partnership or a corporation. The most obvious difference is that as partnership, you and your partner will be liable for all your business risks. If you do not want to be liable for any risk, the corporation structure is the way to go. The only downside to corporation is that it is not easy to setup and you will have to pay double tax.
6. Register With The Government
If you’ve decided on your business legal structure, you can proceed to register with the government. The agency responsible for business registration in Nigeria is the Corporate Affairs Commission of the federal government. You can register your business by yourself but from experience, I will not advise you to do so as the process could become cumbersome at some point especially when dealing with incorporation. If you decided not to register it yourself, you can get a lawyer to get it done for you. Meanwhile, I recommend one of the online platforms such as DIY Law. With their platform, you can get it done with ease.
Remember, it is very important to get your business registered.
7. Register With Tax Office
Once your business is registered, do not waste time before you head to the Federal Inland Revenue Service office closest to your place of business. In Nigeria, you are required to pay tax if your business is making profit. You need to obtain a Taxpayer Identification Number (TIN).
Visit here to learn more about registering for tax in Nigeria
8. Get A Business Account
You should visit one of the commercial banks and get a current account with your business name. You do not want to be carrying out business transactions with your personal account.
9. Purchase Insurance Policy
While this might seem unnecessary, it will protect your business in case of an incident such as theft or accident.
10. Build Your “A Team”
Now it’s time to build your team. You will not just build a team, you will build an A Team. Every great business requires a great team. To build a great team, you must begin by selecting the right individuals. Decide on who is required. Start by making a plan. In the plan, you should identify what skill is needed, which position you need to fill, then you can look for the right person for the job. Remember that there are other factors you need to consider beyond skill. You must hire people who will fit into your team and help you build the kind of business you want.
11. Brand Your Business
What separates Coca Cola from Pepsi, aside from the taste of their products? The answer is the brand. You can never confuse a Pepsi with Coca Cola. This is where branding your comes in. What comes to your mind when you see a new building being painted yellow in a commercial area? MTN will probably come to your mind. Your business must be differentiated from your competitors’ even if you’re still a small business. People should be able to identify your business without seeing your business name. Decide on the kind of brand you want to build. Choose a colour, design a simple but beautiful logo. Get a website. All of these can be done these days with little money. Design ID cards, business cards, letter headed papers and a few branded items. Note that branding goes beyond this but it’s a good way to get started. You might be thinking why do you require branding when you’re just getting started. Remember all the great brands you see out there today didn’t start building their brands after they became billion dollars companies. It starts from the beginning.
12. Promote And Grow Your Business
Now you’ve got everything right. Your business has kicked off. Well, no one will patronize you until you let them know what you’re doing. Start promoting your business. There are several ways to promote your business. The easiest way these days is the social media platforms. You can get started on Facebook and Instagram. There are several other ways to promote your business. Take your time to research the one that will work best for your business.
By following the above guide, you will be able to get your business started with no hassle. If you have any comment or questions on how to start a business in Nigeria, feel free to comment below. I look forward to hearing from you.