Step by Step Guide to Starting a Successful Business in Nigeria

Presented here are the remaining five (5) of the top 10 important steps you must take before starting a business in Nigeria.

6.     Conduct a Feasibility Study: Feasibility study is the appraisal of the estimated cost and potential profit of a business idea or project.  A feasibility study in other words is an initial study of the viability or profitability of a business idea or project.

Feasibility study comprises of different parts; it has a cover page that identifies the name of the business, date of the preparation of the feasibility, the business address of the business (business address of a business can be more than one), confidentiality clause is also included to protect idea theft.

Others include an executive summary containing a synopsis of the proposed enterprise, business description, the product or services offered for sales is analysed (with regards to production process, substitutability, ownership, legal requirement and other distinct attribute of the product or service), market research and analysis plan to ascertain if market exist for the product or service, financial statement of newly proposed business is otherwise known as “pro formas” is also prepared.

There are several reasons why you must conduct feasibility study before starting any business in Nigeria, failure to understand this singular fact is basically where the failure of most Nigerian entrepreneurs begins.

Even though entrepreneurship is all about risk taking, jumping into a business without an adequately preparing feasibility study is suicidal. A lot of people invest in a business idea blindly in reaction to unverified information; some people venture into a business simply because a friend or relative said the business was profitable.

This set of business owners most often than not end up bankrupt and disappointed. Acquiring necessary knowledge can further ease preparation of the feasibility study. Preparing a feasibility study for your business prepares you for future possible challenges you might encounter.

Preparing for your business undertaking will make you ready to accept the reality that you can fail tomorrow; it will prepare yourself further by increasing your risk bearing capacity. Ultimately, you prepare yourself by making up your mind to succeed despite the odds and competition.

7.    Source for Start-up Capital: Funding is very important, though it is not the first thing. You do not start business because you have money, I believe you want to start a business because you have a potential money making idea. Don’t like most people start business because of availability of money because such businesses if not based on conceived ideas or well thought plans will fail before beginning.

Funding is the live-wire of any business; it is the life-blood of your business for survival and growth. Before making up your mind to start a business in Nigeria, you should have procured the necessary capital to at least launch the business. Financing a business can often be one of the biggest challenges faced by an entrepreneur anywhere in the world and Nigeria is not an exception.

Sourcing for your start-up capital is an important step that an intended business owner should not overlook; it requires understanding financing options available to you. There are a number of ways to source for business start-up capital and it shouldn’t be difficult as it mostly depend on the magnitude of the business.

You may choose to bootstrap, fall back on savings, or even keep a full-time job until your business is profitable, but if you do not have the start-up cash and looking for an external source of financing, you may resort to borrowing either from friends or from the bank.

To avoid starting your business on the wrong foot of bad debt, you have to be cautious in financing new business with large debt liabilities. Debt is only good when the money will be invested for cash flow or capital gain, but the uncertainty in business undertaking does not allow exact prediction of business success.

It is very important also to always look out for financial leverage in your business. Leverage apart from getting a bank loan can be in the form of getting credit line from suppliers; striking strategic alliance with a bigger player or getting a contract. No matter what leverage you decide to pursue, make necessary consultation and go for it.

The fastest way to grow your business is to leverage on the structure of well established businesses. So if you want to grow your business faster, then look for and take advantage of financial leverage (of course with caution).

8.    Register your Business: Does your business require some form of special permit or license? If yes, try to get it before starting. Most businesses operate as sole proprietorships in Nigeria today without registration and you can choose to go the same way.

If you don’t want your business to be registered because of some challenges, by all means get the needed license or permit to operate your kind of businessfrom the relevant authority.

After saying the above, I advise you endeavour to register your business name if you are truly out to build a successful business that will stand the test of time.

Depending on the magnitude of the business you wants to start, you need to register your business in Nigeria with the Corporate Affairs Commission (CAC). Registering your business with CAC would enable you to do business in the country legitimately, avail your business government intervention

 It is important to find the authorities responsible for registering and regulating your type of business undertaking. Businesses like mining, food, services provision, pharmaceutical companies, Chemical manufacturing business etc., need special license or permit from the government in Nigeria.

We have authorities such as NAFDAC, Consumer Protection Commission (CPC), Corporate Affairs Commission (CAC) etc please endeavour to find out those related to your business.

9.      Set up a Team: Developing a winning team is critical to a business success. This applies not just to the manager or top executives in the company but to every single unit within the business organization.

Having a good team goes beyond recruiting people to fill up job vacancies. It involves getting the right people and making them to work together. A good and cooperative team goes a long way in determining if your business survives the first few years after its establishment.

When it comes to hiring and managing talent, there are two basic strategies that work. The first is to hire the very best talent in the market; the second is to hire solid talent and bring out the best in them.

Since most companies can’t afford the cost of recruiting and retaining the top tier of talent, most have to pick strategy number two.  As an entrepreneur, we sometimes find it difficult or challenging to get together a great team.

Setting up a winning business team by entrepreneur in this case can be likened to forming a football team by a coach. As in football, it is easier to put a team together, what makes the best coach is making them to play together.

10.    Start your Business: After following all the steps above; this is where you get down to the real deal; this is where you start the actual business.

Start your business and I will advise with emphasize, start it small such that you and your team would be able to manage efficiently. Remember that “Rome was not built in a day”.

Most people make wonderful plans, do a terrific feasibility plan and even raise the needed capital to start the business but for reasons best known to them they just fail to start.

Maybe it’s because of the fear of failure. Not everybody has the guts to start a business, so you need guts. Most can only dream of it but very few dare to take the risk. Are you willing to take the risk and start your own business in Nigeria?