How to Start a Business in Nigeria: The Ultimate Guide

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You’ve never loved the idea of doing a 9–5, so, being a business owner has been the goal from day one.

However, though you had a business as a teenager selling ice cream, you understand that building a great business requires more than you know currently, and you are here to get answers.

This article will give you the answers you seek. Here, we’ll examine a step-by-step process on how to start a business in Nigeria, as well as tools and templates to set you up for success on the go. Let’s dig in.

10 Steps to Take to Start a Business in Nigeria

By the end of this section, you’ll have all the knowledge and tools you need to start and grow your business right away. Get ready, set, read!

1. Identify a Business Idea

The first thing is to start with why. Why do you want to start a business? Is it due to a childhood dream? Because you need money? To solve a problem in society with your product? Why? See the tweet below.

This is important because knowing your why will help you identify the best business idea you should build on, not only based on your personal needs but also on what the market needs. The image below explains it better.

To identify the business idea you want to build on, consider your interests, passion, skills, and expertise, as well as the market demand, profitability of the business, competition, and other key factors that can make or break the business.

Our guide on 10 side hustles you can start in Nigeria will also expose you to different business ideas, helping to broaden your perspective before deciding on the business idea to launch.

2. Validate Your Business Idea

After deciding on the business idea to launch, the next step is validating the idea to see if there’s a need it can meet or a gap it can close in the market. Without a need to be met, there is no money to be made, and with no money being made, there’s no business.

So, you need to check if your product is needed in the market, before going ahead. This can be done in the following ways:

• Market Research: First, conduct market research to find out if the market needs your product and if you have a buying audience. This is key because your business is about the people you want to sell to, and not about you. Because even if you have the greatest business idea in your head, without a demand in the market, it’s nothing.
• Audience Research: The next thing is to research and identify your target audience to know their needs, and how you can communicate your solution to those needs in a way that will attract them to your business.

You should also build an Ideal Customer Profile, to help you identify the ideal customers you want to sell to. This will help you know where to find them, and what to say to them; it even informs how you design your product to meet their needs.

• Market Trends: You should examine the trends in the market, such as gaining an understanding of your industry, competitors, customer preferences, etc.

This can be done by specifically examining long-term consumer trends, seasonality of the product, social, and political factors that can influence the market and consumers’ demand, trends in the industry, and more.

• Competitor Analysis: Analyzing your competitor is also important to help you differentiate yourself from others in your niche, thus, developing a Unique Selling Point (USP), that sets your business apart in the market. Watch the video below to understand how to do a competitor analysis.

3. Develop a Business Plan

After validating your idea and seeing that there’s a market for your product, it’s now time to draft a plan to guide you from ideation to launch and onto growth.

A business plan is a document that contains all key information about your business from your business idea, mission, vision, target audience, marketing plan, financial plan, staffing plan, etc.

It is a living, breathing document that guides your business operations, the steps you take to achieve set goals, the kind of structure the business is to take, etc.

With a comprehensive business plan, you can identify opportunities to take advantage of for your business and possible threats to be wary of.

Here’s a business plan template you can adopt for your business. To avoid overwhelm, if a business plan looks too bulky, you can adopt a business model canvas to have an overview of your business too- literally, the same work a business plan does.

4. Choose the Structure of Your Small Business

Choosing the structure of your business helps you know whether you will be running it alone, if you will bring in a business partner or co-founder if the business will be a limited liability company or a corporation.

Now, the decision of choosing a structure for your business shouldn’t be taken lightly, since it will affect many things in the long run. The following are key factors to consider when choosing a business structure: management and control, formation and maintenance, tax implications, and legal control.

Also, when making this decision, ensure you weigh the pros and cons of each structure, to see which suits you the most. You can also get legal counsel from lawyers to make the right choice that will benefit your business in the long run.

5. Register your Business and get licenses

The next step after picking a structure is to register your business officially with the Corporate Affairs Commission (CAC) or Small and Medium Enterprises Development Agencies of Nigeria (SMEDEN).

To kickstart this process, start by choosing a business structure, as you’ve done in step 5 above. Then proceed to choose a business name and reserve the name with CAC to get exclusive rights to it for the next 60 days, within which you can start the process of registering the business.

To begin registration, you will be required to submit the following documents:

• A completed application form
• Memorandum and Articles of Association
• Form CAC1.1 (particulars of director)
• Form CAC1.2 (particulars of secretary)
• Form CAC1.3 (particulars of shareholder)
• Payment of filing fees

Once your application is approved and all fees have been paid, you will be issued a certificate of incorporation confirming the legal existence of your business. You are then to register your company for taxes with the Federal Inland Revenue Service (FIRS) and get a Tax Identification Number (TIN) for tax remittance.

You should also get the required licenses and permits to run your business, depending on the niche you are in and your location. Examples of some of the permits issued to business owners include Trade licenses, Environmental permits, Health and safety permits, Import and export licenses, etc.

6. Funding the business and Managing Business Money

Every business requires funding, no matter how little you decide to start with. So, you need to determine how you will fund the business either from personal savings or by getting external funding.

In starting a new business, it is advised to start with money from your savings or donations from family and friends. This is so that you can test your idea with money you can afford to lose, without any risk of being in trouble if it doesn’t work out.

After growing the business to a certain level, you can then get loans from microfinance banks or loan companies, apply for grants from the government or other organizations, crowdfund, apply for Venture Capitalists, etc.

One common question people have regarding starting a business is about how much they need. Some business ideas require more money than others, depending on the niche. For example, the capital needed to start a cement business will be different from the one needed to start a perfume business both at a small-scale level. So, it’s best to determine how much your business idea will require for funding and gather that.

After this, pay attention to your pricing, budgeting, and cash flow. Read our guides on each to learn more.

7. Market your Business

A marketing plan is key to helping you build brand awareness and make sales. So, create a marketing strategy that details your marketing goals, target audience, marketing channels to adopt, content to market the business, and other materials needed.

To start, set up a digital presence‍ for your business, and create a business account on social media platforms, Google My Business, and other relevant digital channels. You can also run paid advertisements to increase your reach and generate sales.

However, all your marketing efforts shouldn’t only be online, as offline marketing is also as effective and can bring in sales.

So, invest in offline marketing such as word of mouth, use of stickers, bulk SMS, etc. You can also collate the contact details of every customer you have by getting their phone number for constant offline communication.

8. Start Selling

You are in business to sell, so, you must learn that. To make good sales, you must understand your product, the people you are selling to, the problem your product is solving for your audience, and how to communicate the value of your product to them. That is how to take people through the buyers’ journey, leading them from being unaware of their problem to being aware and ready to buy.

You should also be intentional about giving every one of your customers a great buying experience, such that they are willing to tell others about you which helps you grow too.

9. Apply for Grants and other funding to grow

Finally, a core part of growing a great business is thinking beyond buying and selling, to getting funded to solve people’s problems. With this mindset, you can grow your business to the level where you are now being funded by the Government, and other organizations, who are interested in growing MSMEs.

To access funding like this, start by getting investment-ready by getting a pitch deck to pitch your ideas to investors, as well as other documents such as your business plan, business registration and licenses, tax returns, financial statements, etc.

Check out our funding checklist to see what you need to do to get the funding you need, or apply for a collateral-free loan with us and get funded immediately.

10. Join a Community

Being a community of experienced business owners who are eager to share their knowledge and expertise is gold. No amount of money can buy that kind of access to such a rich network.

So, to grow faster on that business journey, join a community of people who are on the same journey as you, and who you can be encouraged and inspired by when needed. Our Savvy Business Community is a great place to start and for FREE!

Start Today

Waiting for the stars to align before you launch your business will make you stall for a long time and you may never start at all. So, instead of waiting for everything to be perfect before you launch that business, start with what you have and grow from then on.

At Triift Africa, we help you start, grow, and scale your business, by giving access to funding, business growth resources, and a community of business owners to learn from. Ready to grow? Join our Savvy Business Community, to access the great resources you need to kickstart your business growth.

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