These days you can find very useful information about entrepreneurship and starting a business. But often time you will need to separate the wheat from the chaff in order to get the right information.
Usually the process of starting a business begins with an idea. Once you think the idea is good enough to build a profitable business with then the next step is to develop your business idea in to a viable business plan.
A business plan is one of the most important ingredients when preparing the recipe for a successful business. Without a well written business plan, your investment in your business may just be akin to flushing money down the drain.
In this post, we’ve highlighted a series of easy-to-follow steps that you need to successfully start your business and execute that amazing business idea.
Step 1: Develop your business plan
Writing a business plan can be done by someone else on your behalf but it will be best for you to write it yourself.
The major aspects of an ideal business plan include:
- The Executive Summary
- Business Description
- Market demand
- Competitive analysis
- Design and Development
- Operation and Management
- Financial forecast or projections
The highlight of your business plan is found within the executive summary. Basically, the major points of the business are usually outlined in just this single page of the executive summary.
In this chapter, you’ll discuss the industry you’re starting your business in, while taking a look at the present and future of the business in the industry.
This is based on the analysis of your market. After the evaluation of your market, you can then proceed to identify your target market. The identity of your target market is very important because this is what influences your market strategies.
You can easily formulate the right techniques on how to impart value to your target market as a means of generating sales and boosting your company’s profitablity.
Analysing your competitors’ strengths and weakness will help you identify the potential opportunitie and threats in your prospective business. In terms of the weakness, you can leverage on them to create your unique selling point.
Design and Development
This applies particularly to businesses that are into product development. This phase doesn’t necessarily apply to service based company.
In the design and development phase, it is essential you create a budget to cater for these aspects.
Operation and Management Plan
This is another important aspect of the business that many first time entrepreneur often neglect. Once you business starts running, you’ll need to have an operation and management schedule that should be strictly followed. This should be clearly explained in your business plan so that you can have an idea of your inflow and outflow.
Most times, there are a lot of expenses at the initial stage of starting a business and you’ll need to take this into consideration when planning your business.
You can’t start a business without resources and you ill need to ascertain your resources. The best way to do that is to write down what you have. Also, you may have received support from your family and friends. In this case, you should ensure that these sources are clearly noted in your plan.
Although the written forecast for most businesses is often different from reality, it is still necessary that you write it down in your business plan.
Particularly, if you’re looking for funding, one of the things potential investors often look at is the forecast. It puts things in perspective and gives them an idea even if vague of what to expect from your business.
Step 2: Register your business
The next hurdle to scale after mapping out your business plan is to get your business registered with the Nigerian Corporate Affairs Commission commonly called the CAC.
The CAC is responsible for registering all business entities in the country.
But you’ll need to answer a couple of questions prior to getting your business registered.
First, what kind of business are you starting?
Basically, there are 3 types:
- Sole proprietorship
- Private Limited Liability Company
- Public Limited Liabilty Company.
The ownership structure of your business will influence the type of business you should start.
Secondly, what is your business name?
You’d need to take your business name to the commission to get it verified. Sometimes, the name you intend to use may already be used by someone. So, you’ll need to get this sorted first before you can take the next step.
There are several CAC offices spread across the 36 states of the country. You should choose the one closest to you. You can do your registration online as the process can be done online.
Once your business name is verified, you’ll be given a form to fill. Input the necessary details and pay the prescribed fee. Then, your application will be processed. After a few weeks, your business registration should have been concluded and you can move to the next step.
Step 3: Tax registration
The next step is get your company registered at the tax office. Tax related issues are under the Federal Inland Revenue Service (FIRS).
This is where you’ll send the value added taxes, company income taxes and withholding taxes. It is extremely important that your get registered at the tax office closest to you.
Once you’re done with the process. You’ll be given a tax identification number (TIN) which you can use for your tax processes.
Step 4: Obtain the necessary permits
Most businesses are supervised by associations as a result, one of the things you need to do is to get your business properly registered with the related body. For instance, the Pharmacist Council of Nigeria is responsible for overseeing pharmacy businesses in the country.
You can make enquiries on the stipulated fees and the things you need to do before you open your business to the general public.
Failure to carry out due process can put you in trouble and you can end being fined. Remember ignorance is no excuse in the court of law. Often times, there are fees to be paid and guidelines to be followed and you need to know these things before you can carry business in any of the sectors you choose to.
Once you’ve sorted out the process of getting your permits and other necessary steps then you can move on to the next step.
Step 5: Acquire office space
The process of renting or leasing your office space can be done simultaneous with steps 2, 3 and 4.
Interestingly, these days there are some businesses that can be started from the comfort of your home. For instance, most internet based businesses don’t require an office space. You can seamlessly work remotely from home. But you may eventually need an office space on the long run. This will be necessary once your clientele base begins to expand and you need to employ more staff.
Also, some businesses are extremely location dependent. This is why it is necessary that you must have carried out market research prior to acquiring your office space.
One example is the fast food business. This line of business will do extremely well in a commercial area than it will in a residential environment.
After acquiring office premise, the next step is to furnish it to your taste. Also, the products you will be selling will be brought in at this stage. And if it’s a service based business, the equipments needed to execute your daily activity should also be brought in.
Step 6: Create a website
Almost every business is online these days. Your business should have a web presence at least. This makes it easy for potential clients to easily locate your business.
But, this goes beyond just finding a random web designer and telling him to create a web site for your business. Already, the internet has a lot of crappy websites and you shouldn’t your website to the long list.
You should pay particular attention to the user interface of your site. Also, it is important that your search engine is particularly optimized to search engines like Google.
These features can not be carried out by just anybody with the tag of website designer. If you really want your business to be exceptional then you should employ the services of a professional web designer that knows his onions.
For instance when people search for keywords relating to your business, they should be able to find your company as one of the top on the list and this is what will make the process of getting clients easy. Getting a good designer might need you to pay a reasonable amount of money. Well, by all means please do, because it will certainly help your business on the long run.
Step 7: Implement your marketing strategies
“Build it and they will come”
I’m sure you’ve heard that before. Well, that never works because nobody will come if you don’t tell them to come This is where your marketing team plays a prominent role.
Depending on what kind of business you operate, you need to actively advertise your services to your potential clients.
You should find where your prospective customers hang out and seek ways to meet them to advertise your products.
If you run an educational or tutorial centre, go to schools in your neighbourhood and tell the students about your service.
If you run a poultry business, go to the market or visit the retail stores around you and offer your eggs to them.
There are many ways to execute your marketing strategy and this is where the success of your business lies.
Many businesses have failed because they couldn’t generate enough customers and one major cause of this is poor marketing efforts.
Step 8: Develop a brand
It is easy to fall into the trap of thinking your business is successful due to stream of customers you have and your revenue generation.
But the truth is creating a sustainable business goes beyond that. You need to create a unique value by branding your company appropriately.
For instance, if you run an eatery or restaurant, you can build your value around your unique customer service. With many restaurants lacking in this aspect, you can easily stand out among your peers. Interestingly, it doesn’t cost you much apart from taking out time to train your staffs in customer service.
Branding also includes create a logo to signify what your company stands for. Also, your staff should have a business card or ID card showing where they work.
These simple tools are very powerful in helping you stand out among other companies in your niche.
As stated earlier, it’s easy to get stuck in the profit first mentality but a great business is all about value creation. And you can make the value you offer reverberate in your branding message.
Step 9: Promote your business
Once you’ve done all you need to do. You shouldn’t rest your oars. Promote your business and seek opportunities to showcase your business to your potential clients. Promotion of your business is something you should never tire of.
In a short while, you would see steady improvement in your business.
Starting a business in Nigeria isn’t for the faint hearted. Although, we seem to have given you a step by step guide but it’s not really as smooth sailing as shown in this article. There are some frustrations along the way.
But the difference between the successful business person and the unsuccessful one is simply – persistence. Don’t give up in the face of adversity, keep at it. Seek advice when you’re stuck in a rut and again – don’t give up.
Now, it’s time to take the first step and execute that great business idea of yours -– Get Started!
[Below is the older version of the article. We purposely left it just in case you might still benefit from it in one way or the other.]
How to Start a Business in Nigeria: Step by Step Guide
Nigeria is blessed with vast resources and a very huge population. This makes it a great place to set up a business.
More and more expatriates are trooping into Nigeria to set up businesses, and that goes to show how favorable the business terrain in the country is.
However, achieving anything tangible from your Nigerian start-up requires a lot more than having the required capital. First, you would need a very solid business idea and then you would need to back it up with the proper research, planning and implementation.
To help you successfully launch your start-up in Nigeria; here are some of the steps you need to take:
1. Develop a business idea
First, you need to do a proper research to come up with a smart and unique business idea. I mentioned unique because one mistake most Nigerians make is that they ignore many of the vast business opportunities in Nigeria and instead decide to ‘copy’ other people’s ideas.
If selling GSM recharge cards looks like a very profitable business, before you know it, almost everyone is selling recharge cards. Nigeria is very large, and there are a lot of products and services that are still unavailable or could be better.
So, don’t copy other people’s ideas, instead, you should take time to brainstorm on the solutions you could proffer and the needs and yearnings you can help to satisfy.
2. Write a business plan
You cannot start a journey without having a destination in mind. Can you? Even Nomads usually have a destination in mind before they set out with their cows.
Your business plan is the blueprint of your business. It shows where you are going and guides you throughout the journey. Hence, it is important for you to take your time to write a business plan before moving to the next stage of starting your business.
Writing a business plan is quite easy, and there are even software packages that you can use to do it easily.
3. Register your business
The next step is to register your business with the Corporate Affairs Commission (CAC). There are three main types of business you can register in Nigeria:
- Sole proprietorship.
- Private Limited Liability Company.
- Public Limited Liability Company.
To register your business in Nigeria, these are the steps you should take:
- Decide on the ownership structure of your business.
- Choose three preferred business names.
- Visit the CAC office closest to you to find out if your preferred names are still available for registration or have already been taken by another company. Some business names may also be rejected if they are offensive or reserved.
- Provide details of your new company such as your proposed business address, memorandum of association, articles of association, details of directors, share capital and allotment, and all other necessary information and forms required by the CAC.
- Pay the necessary fees. For a sole proprietorship/business name as it is popularly called, you would need between N12,000 and N15,000 to register your business with the CAC, while other forms of ownership would require at least N30,000 for registration.
- Upon verification and compliance, the certificate would be issued to you and then you are free to commence operation of your business.
4. Complete tax registration
The legal process of setting up your business isn’t complete until you have visited and registered with the Federal and State Inland Revenue services.
The Federal Inland Revenue Service (FIRS) is where you would send all the Value Added Taxes, Company Income Taxes and Withholding taxes, while the State Inland revenue would be in charge of collecting all PAYE taxes deducted on your employees as well as other necessary taxes and levies. You may also need to register with some local government agencies for payment of some taxes and levies.
5. Obtain necessary licenses and permits
This would depend on the nature of business you wish to operate. If you want to operate a transportation business for instance, you would need an inter-state transport permit.
There are a lot of licenses and permits specific to different businesses so it is important to find out which permits you need to apply for to run your kind of business.
6. Acquire office space
Next, you should seek out a suitable office space, which would be accessible to your clients and expose you to the type of clients you need to patronize your business.
7. Set up a website
More than 40% of Nigerians visit the internet daily. Therefore, you should look for a good web developer to help you create a user-friendly website that will give your business solid internet exposure.
8. Develop a marketing plan
Just like your business plan is important, your marketing plan is also extremely important. Many Nigerians business owners start a business without a marketing plan or an idea of how they intend to promote and sell their products. This is a mistake you should avoid. Have a clear plan on how you intend to penetrate the market and outsmart your competitors.
9. Work on branding
Lastly, you should work hard at creating a unique identity for your brand. Design your logo, business cards, company brochure and all necessary materials to help you promote your business.
With all of this in place, you would have completed all the legal requirements and would be ready to start your own business in Nigeria.