Starting a business is an admirable thing as not everyone is cut out to take on financial risk with respect to investing.
The Nigerian business climate is a slippery slope with the odds stacked high against small businesses and almost no support for small and medium enterprises. Yet many courageously take on the challenges in order to contribute to the economy.
Due to the high level of unemployment in the country, many are turning to self employment. Here are five things to know when starting a small business in Nigeria.
Government policy
It is important that one understands the policy of government before starting a new business in Nigeria. Government policy will determine how friendly or tough the government views a particular sector. For example, if one decides to go into plastic bags production and the government introduces a new tax policy to cut down the environmental impact of plastic bags, this would drive up the production cost for the business owner.
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Capital Requirement of the business
It is vital that you are aware of the financial capital you need before embarking on a business. Not taking full consideration of the financial need of the business and securing the funds could produce catastrophic outcomes for the business owner. It is important that a careful evaluation of the minimum capital required to start a business is determined before the takeoff of the business in order not to get stuck midway.
Knowing What Your Target Audience Wants and Where To Reach Them
When starting a business it is also important to know the type of consumers you want to attract and where to reach them. Introducing a generic product that can found everywhere does not have any advantage to a newcomer into the market, such as water production, but a food retailer or a baker can charge higher than the average price using modern tools such as the internet to connect with their target customers.
Accessing Bank Credit
Ask most aspiring business owners what their biggest challenge is, you already know the answer, capital. Accessing capital in Nigeria could be a challenge for startups with big dreams. Knowing where and how to access funding is important for any business to take off. While banks are the most popular source of credit, a start up can get funding from investors who believe in the business or idea.
Be Innovative With Your Product Offering
We are in a fast changing world, where people want to see innovation in service delivery or product packaging no matter how small. Entering a market and doing the same old thing does not give you any advantage. When starting a business, consider the difference you can offer your customers. Nigerians like to enjoy good services or products.
