Half-year State of the Market Report
Not Enough Female Business Owners?
Why does DIYlaw exist?
Almost every single thing about running a business in Nigeria is a struggle.
We know this, because:
1.we run a business too.
2. we set up shop for that purpose.
It is no news that Nigeria ranks 169 out of 190 economies in the World Bank Ease of Doing Business Ranking and 138 for starting a business. It is why the Presidential Enabling Business Environment Council (PEBEC) was formed. PEBEC’s sole mission is to improve this rankings and with the efforts made so far, we believe the rankings can improve.
At DIYlaw, we strongly believe that no entrepreneur should be deprived of building their business because they can’t access or afford legal services so we made it our mission and business to make legal one less challenge to grapple with for entrepreneurs.
What is the State of the Market Report?
With the launch of our new website in January, came a snazzy dashboard and better insight and visibility to the data we capture. So, we decided to do an assessment on what businesses are being registered, who is registering what and where these businesses are being registered from.
We looked at our current user base and analyzed a sample group out of the company incorporation and business name registrations we completed since the re-launch of our website to learn more about the people behind them. Overall, we analyzed 80 orders — 44 completed company incorporation and 36 business name registrations.
We made some interesting findings and thought to share. We hope you enjoy.
This half-year report is the first, we hope to continue this trend every half year and hope to always find interesting data we can share.
If you have any comments or questions, please leave them in the response section. We’ll also be happy to hear any conclusions you may derive from the data we’ve shared.
Happy reading!
User Data
Since the relaunch of our website in January, we have seen continuous growth of our user base. Overall, we had a growth of 427% in the first six months of this year. As at June, our growth rate was about 12%.
Company Incorporations
Out of our sample group of 80 registrations, 55% of these registrations were company incorporations, while 45% were business name registrations.
This is a fair reflection of the ratio of company incorporations to business name registrations we have completed so far in 2017, showing a slight preference for company incorporation registrations over business names.
We then looked further to analyse the persons behind these companies i.e the shareholders and directors.
Shareholders
The 44 incorporated companies have a total of 110 shareholders. 9 of them were corporate shareholders and 101 are Individuals. We observed a pattern in the gender of the shareholders. Out of the 101 individuals, 71 were male and only 30 are female, meaning over twice as much men than women and a ratio of 7:3.
Directors
For the directors, the ratio was a bit more balanced, but still one-sided. 99 directors registered together with the 44 incorporated companies. 66 of them were male and 33 female, a ratio of 2:1.
Looking at the ages of the directors, the female directors were younger, with an average age of 32.3. The average male director on the other hand, was 33.8 years old. The minimum age of the directors was also very close. Both male and female youngest directors are in the beginning of their twenties. The only significant difference was the maximum age. While the oldest female director was 67, the oldest male director was 81 years old.
The last thing we looked at, was the location of the directors. Obviously, majority live in Lagos. This is not surprising, Lagos is the commercial nerve-centre of this country, and of course, we are based in Lagos. Beside Lagos the highest numbers were in Abuja (FCT) with 7, Ogun with 6, and Rivers with 4 directors. There were two non-Nigerians. One from Flemish Brabant in Belgium, and another one from Virginia in the USA.
Nature of Business
For the nature of business, we observed a lot of diversity. We had customers who registered accounting, investments, consulting, health services, research, trading, fashion and catering Services. Most clients, however, were in the software development and tech business. (Marc Andreessen is right after all, Software is eating the world).
Business Name Registrations
As earlier stated, 45 % of the sample group were business name registrations. A closer attention to details and statistics gave some more insight.
The Proprietors
The gender was very balanced for the business name proprietors. Out of the 48 proprietors, 26 were men (54%), 22 were women (46%). This adds up to a nearly 1:1 ratio.
Their ages were also very close. For both genders, most of them were between 26 and 35 years old. The average male proprietor was 28.8 years old and the average female proprietor was 30.9.
We noticed that the average female proprietor was a bit older. This is also true for the minimum and maximum age. While the youngest male proprietor was 20 years old and the oldest 43, the youngest female was 24 and the oldest, 53 years.
When it comes to the location of the proprietors, the picture is very similar to that of the directors. 38 of the 48 proprietors were from Lagos. We also had one foreign proprietor from West Yorkshire in England.
Nature of Business
Similar to company incorporation, we also saw a lot of diversity in the nature of business for business name registrations. Industries included entertainment, trading, fashion, and cosmetics. 11, customers chose “Other” as their business nature which ended up also being software and tech related businesses. Neither Information technology nor software development are included as business nature options by the CAC
Conclusions
Our conclusions are derived from a sample size of our user base and not the entire Nigerian economy. We however are quite confident that it is a strong indicator of newly registered businesses in Nigeria in general. (A confidence interval of +/- 5% and a 95% confidence level ;), that was very random, take with a pinch of salt).
From the analysis of our sample group, we arrived at the conclusions below:
Our data shows that there are more male shareholders, directors as well as proprietors. The ratio of male to female is the highest for shareholders, also very high for directors and nearly equal for proprietors.
There is no significant difference in the age of directors and proprietors, whether male or female.
The average age for both, directors and proprietors, is in the late twenties or early thirties, while directors seem to be a bit older than proprietors.
Finally, for us this research shows us the need to expand our reach and ‘shout louder’ so many people with informal businesses can have their businesses registered. We know the process could be very confusing and strenuous involving visits to the CAC but like Michael Jackson, this is our own way of healing the world, let us take that stress off you. Reach out!
If you want to get a bird’s eye view of the data used, you can view the infographic here
Well…That’s it from us, for now!
