Last week I talked about how many Nigerians would like to start up a small business this year. HERE is the link to that post if you missed it or need a refresher before we move on to the steps for this week.
We already established that the first three (3) things you need to do when starting a small business in Nigeria are to do market research, write a business plan and figure out how to finance your business. Once you are done with all that, then you are ready to take the following three steps:
4. CHOOSE YOUR BUSINESS LOCATION
I have heard funny stories in the past about how it does not make any difference where your business is situated. Some even said that as long as you are good at what you do and your customer service is top-notch, customers will always find you. Now that might be true… or not. But then again, if the location of your business didn’t matter, why do real estate agents ask for higher rent or lease for office spaces and properties in ‘strategic locations’?
What many people fail to realize when starting up a business is that your choice of location for your business determines the taxes, zoning laws, and regulations that business will be subjected to, as well as the licenses and permits you will need to acquire. Be it online or physical, your choice can affect your revenue, legal requirements, incentives from the government and even operating costs. Therefore, you need to be strategic when choosing the state, city, area and environment you start your business in.
5. PICK A BUSINESS STRUCTURE
Now this is the most common mistake most business owners make in Nigeria. Only a few people choose the right structure for their businesses; others just operate at freewill and in chaos. This is why businesses end up not paying their taxes or being in the dark about how to sort out their tax issues and why they pay so much in taxes. A business structure simply means how your business is organized in regards to its legal status; are you a sole proprietor, are in a partnership, is your business a corporation or a limited liability company?
A sole proprietorship is the easiest and most cost-effective structure for a small business. It gives you complete control over your business and you can file all tax returns using your personal tax filing information. Cheaper tax right? You bet! Any downside to operating a sole proprietorship structure? Again, you bet! Your personal assets are not protected as you and your business are regarded as the same entity so if your business falls into debt, it means you are in debt too.
A partnership like the name implies is when two or more persons come together to start up a business as co-owners in a bid to make a profit. Here, the partners all contribute money to set up the business. The limited liability structure is a legally registered business structure which is limited by shares. Here, the company is treated as a different entity from its shareholders and the personal assets of the shareholders are protected.
So now that you know a little about business structures, you will agree with me that being hellbent on ‘answering’ Matilda Adejoh Limited may not be the best move for your new small business.
6. CHOOSE A BUSINESS NAME
Wondering why you are seeing this just now and not at the beginning of our discussion? Well, I guess it goes to show that selecting a ‘dope’ business name shouldn’t be that much of a priority when you are looking to start a great business. But since we are here, by all means, you can now go ahead and choose that super awesome name that you can’t wait to see flashing on neon signs, business cards and letterheads.
While it might not be that hard for you to choose a perfect business name, remember to go with a name that captures your spirit, reflects what your business/brand is all about and doesn’t clash with your goods or services. Answering ‘Adejoh Oil and Gas’ when your business offers courier services will make your brand look weird and downright suspicious, don’t you think?
Now, to deviate a little, part of the feedback I got from our little time together was that you would love to learn all about the steps you need to take towards starting your new business in one article. You see, I agree with this… makes things super easy for me. But we all know that most of us wouldn’t get past the first paragraph once they figure out the length of the read. Besides, where’s your sense of adventure? More posts mean more time with me, yes? LOL
Anyways, while you deliberate on these three steps we talked about today and the ones from last week, be sure to be on the lookout for my post next week as we round up this topic.
PS: Something huge is coming next week so don’t miss it!
As always, if you have any questions or comments regarding how to make your business start-up process super simple, I will be in the comments waiting.
Okwy from Sparkle