6 Things to Consider Before Starting a Business

Updated: Dec 13, 2021
By Precious Alex-Toji
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As an entrepreneur, having your own business allows you to make decisions without having anyone boss you around. However exciting this might sound, you would need to take note of certain things before starting a business in Nigeria.

These factors I would be sharing would be of great influence to your business plan. If your target market is Nigeria, here are 7 things to consider before starting a business in Nigeria.

6 Factors to Consider before Starting a Business in Nigeria

1. Your Business Idea

Every business begins with an idea of how to solve a problem by providing services to people. Before starting a business in Nigeria, you need to consider what problems your target market is facing and how you can address that problem. This forms the basis of your business idea.

Sometimes, your business idea can be something entirely new and unique. It can come as a result of the problems you might have noticed a particular part of the country is facing and no one has had an eye for providing a solution to that problem. In this case, your idea has to be unique and practical since you are inventing a new solution.

However, coming up with a unique business idea is not for everyone. You might have a business idea that is already operated by other entrepreneurs. This does not mean your idea would not thrive.

Instead, your business idea should be able to look at the flaws of the other businesses in operation and work on being better.

I have a thrift store I patronize a lot. Once, I went to buy jeans but my cash at hand wasn’t enough to make a complete payment. I opted to pay with my card but she had no POS and so I left. Two weeks later, she had established a POS with her thrift shop so customers can pay with or without cash in hand.

Whatever your business idea is, it must be targeted at solving a problem or making people’s lives easier.

2. Market Research

Starting a business in Nigeria without conducting research on your target market is like going to an examination without reading.

One thing to consider before starting a business in Nigeria is your market. To understand your market, you need to conduct market research.

Conducting market research involves you finding out the needs of your target market and how these needs can be met, the current providers of such services which are your competitors, and how much domination they have over your target market. 

You would also need to find out the flaws of your competitors and leverage that to make your business stand out. Other things to consider when carrying out market research include the rate of demand in the market and the pricing level of the goods or services you wish to offer.

3. Creating a Business Plan

Failing to plan is planning to fail. It is that simple. If you have a business idea, knowledge about your market, one thing you should consider is creating a business plan.

A business plan serves as a blueprint to achieving your business goal and objective. No matter how small your business is, you need to consider making a business plan that will help you stay focused and guide the operations of your business.

Your business plan should contain how you wish to go about your business, your marketing strategy which will forecast your expected sales according to your set plan, and other essentials like staffing, capital, and partnerships.

4. Location

One thing to consider before starting a business in Nigeria is the location of your business.

The “where” of your business determines the productivity and profitability of your business. If your business is a product-based company, you would want to site your business close to the source of raw materials.

When picking the location of your business, you would need to consider the purchasing power of your target audience. You cannot own an exotic boutique in a rural area or an area with low-income earners; you would hardly make any sales. To be more productive, you would need to locate your business close to your target market.

Considering the recent rise in insecurity in Nigeria, you need to consider the safety of the location you wish to establish your business. Sparsely populated areas put your business at risk.

The culture of a particular region also plays an important factor in the location of your business. There are regions in Nigeria where certain products are not accepted, for example, pig production in the north.

5. Infrastructure

One thing to consider before starting a business in Nigeria infrastructure.

This involves the type of technology you would be incorporating into your business. This includes, but is not limited to, types of machinery, equipment, and structure.

You would also need to consider if you would be employing labour and how much you would be budgeting on either a monthly, weekly, or daily basis. You would need to consider how you would be hiring, either through a hiring agency or yourself.

6. Capital/Finance

For a business to survive, it needs capital to finance its operation.

Depending on the type of business you are establishing in Nigeria, you need startup capital to cover the cost of starting the business. Whatever business you wish to establish, you must make sure you have the funds necessary to cover the costs.

There are various ways of generating capital for your business. Many entrepreneurs opt for loans to finance their business idea. As a prospective business owner looking for startup capital, you can apply for loans from banks or other financial institutions.

However, when applying for loans, you must consider the terms and conditions of such loans and the interest to be paid. It is best to apply for a few and compare, then select which is convenient enough for you.

Another source of raising capital for your business is applying for grants from government organizations, multinational corporations, or philanthropic organizations. These grants are given to stimulate entrepreneurship culture in the country.

Conclusion

Whatever business you wish to start in Nigeria, you must make sure it is addressed at solving a particular problem.

Nigeria is a country with raw materials waiting to be exploited. You can have a business idea by identifying problems in the community you reside in and coming up with a solution. Then you carry out market research to gain better knowledge of your target market.

Using this knowledge, you can create a business plan that will serve as a guide to your startup while also looking for means to raise capital to finance your business.

If you are looking for a branding agency to help with the branding of your business, MediaHooch makes the best content for engaging customers to your business.

Starting a business is not an easy task. You would need to build the nitty-gritty of being an entrepreneur.

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