This is a comprehensive guide that will help answer your question about how to start a business in Nigeria from scratch (or anywhere in Africa)
I will not just tell you how because I know you need more than that.
I will also tell you some deep truths (or you call them secrets) about starting a business, growing a business and making a business successful.
This tutorial is a little long because I will love to reveal a lot of things to you about how to start your own business.
Can we start please?
What is a business?
Dear friend, forgive me for asking you a silly question (as above).
My experience over the years has shown me that most people in Africa really don`t know what business is all about.
Many people think that business is ‘’buying and selling of goods or services’’.
Business is not buying and selling.
Oxford Dictionary too is wrong when it defines business as ‘’commercial activity’’.
Business is not just a commercial activity.
Now that you`re thinking about how to start a successful business, I will love to tell you what (truly) business is.
In my own experience, business is putting together of all the available resources (humans and materials) in order to win the battle in the market place.
Hey, don`t struggle to remember the above definition.
The most important phrase I want you to remember is, win the battle in the market place.
Why do I disagree with people who think that starting a business is as simple as buying and selling?
Why do I disagree with the almighty Oxford Dictionary that defines business as commercial activity?
Because if business was a merely buying and selling, everybody would have become a millionaire. If business is a mere commercial activity, then, most people who started business would have succeeded.
Unfortunately, over 90% of the start-up businesses never succeeded.
Because business is not just a buying and selling of goods and services.
Business is a battle, a struggle between many soldiers (competitors) and a war.
But why do people find this simple truth very hard to believe?
Because most people are product of school.
School is dumb, and so do her products.
It is easier to believe what your Commerce teacher taught you 15 years ago than to search for reality, you know.
(If you love to know how dumb school is, please, read our free book, 10 secrets university cannot teach you about business and how to make money)
Another question people ask is,
How can I start a business in Nigeria with little capital?
Or in South Africa, in Ghana or anywhere in Africa.
I will answer your question.
First, I will love to tell you that how to start a business is (except in few cases) not very different from one geographical location or country to another.
Starting a business has an already tested and universal principles … just as the law of gravity is a tested and proven law.
The only exception you may find is, for example an ice cream business that is very much lucrative in the Northern African countries may be less lucrative in the South. Why? There is hotter weather in the North.
Another exception may be that starting a particular new business in Nigeria may not require any official registration, while such same business requires a strict compliance and regulation in South Africa.
Do some people assume that how to start-up a business is different in Nigeria than in England in terms of challenges?
Wherever you`re thinking about how to start a small business in Nigeria, Togo or in Geriani (if there be any country with that name), you`re going to face similar odd situations, only at a different rate.
Do you think it`s easy to start a business in America? You can think again.
I am sure you`re getting my point here.
After you have understood that, let us proceed as I will give you some other tips.
How to start a business in Nigeria that is profitable?
Since (I guess) profit and money is the reason why you desire to start a business, may I ask you, how do you think successful entrepreneurs make money in business?
They do so by
- By giving value to people.
- By improving people`s life.
- By making the world a better place.
Unfortunately, we are living in a continent (Africa) where the rich are seen as liars, thieves and fraudsters.
But the truth about making money is that, people who make a lot of money in business, first (I mean first) give values to people.
Now if your intention is to make money in business (which I am sure it is), then, we have to start by identifying a value you can render for people to give you their hard-earned cash.
Money is very hard to get and people don`t just waste it on any product or service … except such a product/service adds value to their lives.
Think about any successful business owner today and you will discover that they become successful and wealthy … simply because they render services (or create products) that is valuable to the humanity.
Let me give you an example.
Facebook started by giving people a chance to connect with their friends and family, to meet new friends and to share their thoughts and views with the world.
That is a value.
Because this service is so valuable, millions (and now over one billions) of people embrace facebook joyfully.
Since there are so many people active on facebook at any giving time, the owners (Zukerberg and others) could sell adverts to people and become billionaires.
Your phone gives you a chance to make calls, send SMS and surf the net.
That is a value.
You cannot possibly use the money you used to buy your computer to do the work your computer is doing for you.
I mean, you cannot (for example) put #70,000 on a table and start typing words through it as I am using this my laptop.
That`s how my computer gives me value.
Money is nothing but what we get after giving something out. What do we give out to get money?
Someone may ask me, Stephen, but you`re telling me here about the giant businesses (facebook, computer and phone examples I made), but I am only thinking of how to start a small scale business from home?
Well, the rule remains the same.
Whether your goal is to start a small business or a large scale business, your primary goal is to answer, what value can I render to better humanity?
Business is just like rearing chicken.
When you rear chicken, you`ll feed her, shelter her and take care of her, first, before she will give you eggs.
Beginning your own business starts from identifying how you can add value to people`s life… feeding chickens.
If you feed your chicken, she will give you the eggs (money) you need
What do you bring to the table?
What are you bringing to the table?
Your chickens will give you eggs, don`t worry.
You will make a lot of money, worry not.
But we have to first identify how you will feed your chickens.
Here I am asking you, what is your business idea? What do you want to sell and how do you want to go about selling it?
This is the next step.
To help you on out, we have a comprehensive tutorial. Click … how to discover business opportunities and ideas
(If you wonder, which business can I start? or what does it take to start a business? the above tutorial will help you)
- I have revealed to you the true meaning of business… it`s a battle between many soldiers (competitors).
- I have told you how we make money in business… by making people`s life better with our products or services
- I have told you that you need a meaningful business idea and I advise you to read the above tutorial about business ideas
After all the above three is understood, the next step is…
5 ‘’people’’ you must understand before you start a lucrative business
There five ‘’people’’ determine whether you`ll make money in your intending business or not.
You have to understand them.
1. Understand your product/service:
I have told you earlier that you`re going into business to fight (that`s just the truth). To win this ‘’battle’’, you must understand your weapon very well.
Your primary weapon is your product/service.
You have work to do!
You have to know, master and perfect the value you are bringing to the market.
Allow me to site some examples.
I am a born writer (this is a lie anyway, though I started writing when I was age 13/14), but when I wanted to turn my writing skill to business, I had to start learning (like mad) how to write like a professional.
I have to start reading as many books as I can find to teach me about how to write and how to let the world know me as a writer.
As at the time of writing this tutorial I think I have more than 50 books in my digital library, teaching me how to write and how to turn my writing to money.
Not just that.
My mentor told me that I have to write every day if I want to be a great writer. Now I write every day (except for few exceptions).
It`s a lot of work, but I have to do it, if I truly want to turn my idea (writing skill) to money.
What is your own business idea?
What is that service or product you want to bring to the market?
You have to work hard on it.
Why do you need to work hard on your business idea? If you don`t, you will be another ‘’me too’’. You know what that mean, I’m sure.
There are lot of ‘’me too’’ people in Africa, so there are lot of ‘’me too’’ products and services.
People simply look at what everybody is selling and start selling it.
What is wrong about this? Nothing, except you are selling your products or services just exact way everybody is selling it. That is why you have to first, understand your product/service you`re about to start selling… as if your life depends on it… because it does.
The reason why you will want to understand your product/service in and out is because you want to do it better than your competitors.
I am glad you understand this.
2. Understand your market.
Who do you want to sell to? How do they behave? How do they buy? When and why do they buy? All these questions have to be answered by you. Understanding your market may be the difference between winning and losing in the game of business.
Think about this.
MTN and glo are both telecom companies, fighting for the same market in Nigeria. But at a time (maybe 2005) MTN, with their understanding of their market, that most phone users in Nigeria are youths (and jobless, you know. Lol), MTN came up with what they call ‘’extra-cool’’.
You can make free call from 12:30 am to 4:30am.
From there, everybody bought MTN line. All of us started making extra cool, you remember?
We fell in love with MTN. If you`re a Nigerian and you don`t have an MTN line, then, (don`t let me talk).
You got my message here.
You have to know people you`re about to sell to, who they are, how they behave, what they believe, how they buy, what they know etc, or else, you won`t know how to make money from your business idea …because you won`t know what hooks them.
3. Understand your enemies.
Enemies? You didn`t read me right. I mean, your intending competitors. I have spent time online today to search for what my competitors are doing and how they are doing it. I did the same yesterday … and always. Why? It`s simple. You`re on the battle field. You need to know their strengths and weaknesses.
Why do you need this? So you`ll know how to play your game.
‘’take them by their weaknesses’’ is a military practice and tactic, so it is in business.
As you`re wondering … how can I start a successful business? the answer is, take them by their weaknesses.
Attack them from their weak points.
Do they have a poor product? Make yours good.
Do they render good service? Yours have to be better.
How do they attend to their customers? A poor customers` service is a weakness which, if you do yours better, can win the market for you.
I know you get my point here. Spend as much time as you can, to know those you`re about to compete with and ‘’take them by their weakness’’
4. Understand yourself, especially your weaknesses and play your game accordingly.
If you`re a general and know that many of your men are having problem with their sights (just for instance), you may not want to attack the enemy at night.
Understanding yourself also will help you to employ your weaknesses.
For instance you`re very poor in record keeping (just like me), since this weakness may kill your business, you may have to employ someone who is meticulous enough to deal with your business records (now or as soon as you can afford to)
5. Understand the law.
Hey, fear not. You won`t need to go to the law school. You just have to understand what your country`s law says about your intending business. Will you need to register your business? Are there some names you must not use (i.e national) in your business` name? Are there some taxes and levies? This is not a big work. Just ask the right people near you and you shall be told.
After I have told you what business (truly) is… a battle for customers.
After I have told you that the way to make money (a lot of it) is to provide value for your clients and customers.
After I have told you the importance of bringing something to the market…. And ask you to read about business ideas
After I have told you about five people you must understand: your products/services, your market, your competitors, your strengths and weaknesses and the simple laws that guilds your intending business,
Then, what is the next thing in the process of starting a small scale business or large scale?
Choose a suitable business name.
If human beings are rational, names will not actually matter (just as certificate would not have mattered), but because human beings, all of us, are weaker than we think, we judge the book by its cover.
Take time to choose your business name. It matters more than you may want to think.
Guess what? Sometimes when I want to measure the strengths and weaknesses of my competitors, their names is one of the first things I look at.
Believe me, if you are doing exactly what we are doing here at the Africa Business Classroom, but your own name is, Bozone, you have more work to do if you want to compete with us.
Choose your name wisely. Read this tutorial about how to choose a good business name.
Write a simple business plan
Don`t let the noise you`ve being hearing about business plans scare you.
Because most people are not educated about business, I call them ‘’dumb’’. Because they are dumb, they make noise on some simple business stuffs. Here is one of them.
They think that a business plan has to be formal or ‘’well-written’’. Some even say that it is a business plan that determine whether investors will invest in your business.
I disagree with all the above.
Business plan is nothing but a business goals and how to achieve them.
The last time i wrote a business plan, it is all in a sheet of A4 paper, so you see how simple it can be (I will write about business plans very soon, always check our site)
How to raise capital to start your business?
After you have done all the above, diligently, you`ll want to raise capital.
How hard is it to raise capital?
This depends on how you go about the above steps. Believe me, when people get worried and ask, how can I get finance to start my business, they`re simply revealing how little they know about business world.
Capital is not scarce.
Sam Walton has said it (probably before I was born) that, ‘’capital is not scarce, vision is’’
Napoleon Hill said, capital is plenty in the world… for anyone who knows how to use it
What are these men saying?
If you do your homework very well (as stated above), you`ll not find it hard to get finance for your business.
I know. I know. I think I know what I am talking about here.
From the first time I started my first business at my age 15 till now, I have find myself getting capital again and again.
At a point I came to the conclusion that getting capital is as simple as getting a lady. While I am not saying that ladies are cheap to get, I mean, men have mastered the art (or science) of getting ladies.
Getting capital is an art.
You can master this art. I have gotten capital again and again, even from total strangers. But because people don`t know anything outside what school (that prison) taught them, they usually have problem believing certain things are possible.
Starting a business proper.
If you have followed this tutorial till this point, you have finished 70% of the work you need to make your business a successful one.
Most people don`t know, but I need to tell you. Wars are won before the battle start.
Football games are won (or lost) before the game starts.
When does a student pass exam? After writing the paper? No. before the examination starts.
Running nay take a runner 30 minutes to do, but believe me, he has spent 30 days (sometimes 30 months) to prepare for this running.
Preparation is the key to business success.
Listen to what Will Smith said, ‘’I’ve always considered myself to be just average talent and what I have is a ridiculous insane obsessiveness for practice and preparation’’
‘’Success depends upon previous preparation, and without such preparation there is sure to be failure’’… CONFUCIUS
Also listen to this, ‘’football teaches you hard work. It takes a lot of unspectacular preparation to have spectacular results in business and football’’ Roger Staubach
Around December, 2013, I told a friend of mine that I will love him to partner with me on a business project and he accepted.
But till March, 2014 I have not launched the said project, so my friend kept on asking, how far?
The far is in preparation.
You have to be diligent in the above steps.
Most at times, business success (or failure) is determined even before your product/service gets to the market.
I once found myself in position to consult for and make some changes for a certain business.
Looking at the market we were trying to win, I discovered there are simple (but courageous) business moves we should have made at the begging that would have given us a nice share of the market.
Unfortunately, the begging was 7 years ago and to make those moves as at the time I got in would be expensive… very expensive, so the higher authority would be afraid of making such risky moves.
Sometimes when the foundation is faulty, the righteous cannot do anything to make it right.
That what Bible says in Psalm 11:3
Get your foundation right, friend.
Then, what is the next thing?
The remaining 30% include:
- Set goals to grow. Most people are concern about, how to start a small scale business. When there is no problem about that, you have to set goals to grow.
- Be strategic in your approach. To think that business is just about buying and selling is to think that football is just about running with ball. Read as much as you can about business and you will be more strategic.
- Don`t expect quick riches. Dangote has already told you that, didn`t you hear him? He advised Nigerians (and Africans) to forget ‘’quick-rich’’ thinking. Your business, I repeat, is like a hen you buy in the market. It requires that you`ll feed it, nurture it and take good care of it … before it starts giving you eggs.
- Have courage to launch. Just launch … even when everything is not perfect. Waiting will kill your vision.
- Believe in who you are. Most Africans don`t believe in themselves. They are suffering from low self-esteem. They will rather remain an employee than to push themselves out and start their own businesses. Believe you can succeed in business and you will.
Thanks so much for reading this.
Please, read other tutorials we link to above.
Africa must be free!