You have thought about a product or service that could be a game changer for you and now you are ready to start your own business.
Starting a business in Nigeria is an exciting adventure. With over 200 million potential customers, the opportunities are endless across various sectors. There is also government support for SMEs through initiatives like SMEDAN.
By planning, researching and complying with rules and regulations, you are on your way to growing a successful business in Nigeria.
Steps To Starting Your Small Business
Developing a Business Plan: A business plan is like a roadmap for your entrepreneurial journey. You should consider creating one if you want to — define your mission and target audience, secure funds, make informed decisions, manage risk and expand your business.
To create a compelling business plan, you have to know the purpose of your plan, use clear and concise language, state what sets your business apart, understand your target audience, outline a realistic financial plan and include plans for business growth.
Market Reseach: Market research is necessary because it helps you understand your customers on a deeper level, identify market opportunities, develop targeted marketing strategies, make informed decisions based on data, and stay ahead of the competition.
There are different methods to conduct market research, and they are:
Surveys: These are questionnaires to collect quantitative data from a large sample size
Interviews: These are in-depth, one-on-one conversations to gather qualitative insights from customers
Focus Groups: These are moderated discussions with a small group of people to get their opinions and attitudes
Customer Panels: This is ongoing feedback from a representative group of customers
Customer Observation: This is when you study customer behaviour in a natural environment
Secondary Research: This is when you analyse existing data from industry eports, academic research or online sources.
Social Media Listening: This is when you monitor online conversations about your brand, competitors and industry.
Competitive analysis: This is when you analyse your direct and indirect competitors to gather insights.
Choosing a Business Structure: It is important to select the proper business structure for legal, financial and operational purposes. Some of the common business structures include:
Sole Proprietorship: This is owned by two people with unlimited personal liability
Partnership: This is owned by two or more owners with shared liability
Limited Liability Company: This is a flexible ownership with limited liability and tax benefits.
Other business structures include Company Limited by Guarantee, Private Unlimited Company, Incorporated Trustee, and more.
When selecting a structure, consider the following factors:
Your personal risk and asset protection
Your desired level of ownership
Tax implications and benefits for each structure
Access to capital and investment
Scalability and Growth
Each business structure has its own rules and requirements, so consider the factors listed above and your specific business needs before choosing a structure. You should also consult with a legal or business advisor to determine the right structure for your business.
Business Registration and Licensing: Registering your business and obtaining the necessary licenses is important because it provides legal protection for your business and makes it seem more credible and trustworthy. It also gives you access to loans and funds while ensuring you comply with relevant regulations.
Some of the regulatory bodies in Nigeria are:
Corporate Affairs Commission (CAC) helps you register your business
Small and Medium Enterprises Development Agency of Nigerian (SMEDAN) supports SMEs
Nigeria Investment Promotion Commission (NIPC) registers foreign businesses and investments
Standards Organisation of Nigeria (SON) issues permits for products and services.
Federal Inland Revenue Service (FIRS) registers businesses for tax.
Funding Your Business: Not everyone has the luxury of self-funding their business, and lack of capital should not hold you back from starting your business. You can consider alternative funding options like Loans from Traditional banks, microfinance banks and cooperatives, Grants from Government initiatives like SMEDAN and BOI, incubators and accelerators, and private organisations. You can also consider getting help from your family and friends.
Before applying for a loan or grant, define your funding purpose and need, research to identify the best funding options, weigh the pros and cons for each funding option, prepare a solid business plan, and consult experts for advice.
Choosing the Right Location: Location has a significant impact on business success, so ensure that you select a place that is close to your ideal customer base and easily accessible to them. Consider your budget when choosing a location, and avoid areas with a lot of competition.
If you want to start operating your business, ensure that your inventories are well-managed, consider hiring skilled employees, offer good customer service that will leave your customers satisfied, build relationships with reliable suppliers, and consider investing in technologies that will make your business operate more efficiently.
Logistics and Operations: Efficient logistics is important for business success as it directly impacts customer satisfaction. Satisfied customers lead to positive word-of-mouth and referrals, increasing visibility and driving growth. An efficient delivery gives you a competitive edge while reducing costs.
Overcoming Logistics Challenges with DHL
DHL is a logistics expert that helps businesses overcome logistics challenges with real-time tracking and competitive pricing. DHL Express offers fast and reliable delivery services, customised freight forwarding, and transportation solutions, streamning logistics operations and improving efficiency. Partnering with DHL can improve customer satisfaction, gain a competitive edge, reduce costs, and enhance operational efficiency.
Marketing and Sales: Behind a successful business is a good marketing strategy and branding. Marketing and branding allow you to create awareness and set you apart from your competitors. They also help you build customer loyalty and retention while driving sales and growth for your business.
There are different marketing channels you can make use of, and some of them are digital marketing, social media platforms, and traditional marketing like print ads, etc.
You must understand your customer's needs and preferences to build a customer relationship. This will allow you to offer personalised experiences that address these needs. Then, consistently reach out and engage them to encourage loyalty and retention.
By following the guides listed above and staying committed, you set your business up for success.
