HOW TO START A BUSINESS IN NIGERIA
John is frustrated and thwarted, he has invested all of his savings into his so-called business but the business seem to be deteriorating every day. He has resigned from his place of work where he is being paid well to start his own business, but, here is John, disappointed and frustrated. What could be the reason?
This topic is timely because there are a lot of failed businesses today. Research has shown that about only 40% of business startups succeed while the remaining 60% end up closing down. This is due to the fact that a lot of people just jump into business with first sitting down to think about the costs (not only monetary costs) and sacrifices they have to make as an entrepreneur.
Therefore this article explains the major thing to look out for when starting a business and the steps to start a successful business.
The Oxford Advanced English Dictionary defines business the act of providing goods and financial service involving financial, commercial and industrial aspects. But for a business to be successful, the good or service rendered must fulfill a need, solve a problem or satisfy a want.
A business is not something you start because you have a lot of money or because people are saying you should start one. Many even follow the bandwagon to start a business. The steps to start a successful business are listed below;
STEPS TO STARTING A BUSINESS
Below are the steps you need to take as an entrepreneur to start a successful business,
- KNOW YOURSELF
Even though many entrepreneur skip this step, I will say this is the very first step to take in starting a business ; evaluating yourself. Many go into business without asking themselves some questions. Before embarking on a business, you must ask yourself some questions like;
- Am I ready to be an entrepreneur?
- Why do I want to start a business?
- What is my passion?
- Do I have what it takes to start up my own business?
After answering the questions above, then you can be sure whether you want to start a business or not. The truth is that, not everybody can be entrepreneurs. So before you decide if you want to start a business or not, you have to discover yourself, where your strength lies, your weaknesses, skill sets e.t.c
To be an entrepreneur is a whole lot of responsibility, one has to sacrifice his/her time ,energy, resources e.t.c so one should be sure he can meet up with the sacrifice before starting a business because trust me, it will cost you a lot. Responsibility is the key word here. As an entrepreneur, you will be responsible for all the happenings in your business.
This is the first step in starting a business because many do not have the capability and ability to run a business on their own, many are also afraid of failing, so the first step is to answer the four questions listed above.
- THINK OF A BUSINESS IDEA
After successfully carrying out the survey of discovering yourself, the next step is to think of an idea. Some business ideas are good but are not feasible or realistic in this part of the world so one has to critically think of a good and feasible business idea. It might be an idea you have been thinking about for some time or it might be an idea that is already in existence, just make sure it is realistic. And if it is an idea that is not new, think on how you will make yours better and how you will have an upper hedge over your competitors.
- DO YOUR RESEARCH
Research is very key to starting a business, as it gives the researcher knowledge and insights about the type of business he or she wants to embark on. A start-up entrepreneur must make necessary research about the market, potential customers, ask questions and get feedback, seek advice from other entrepreneurs.
- LEGALISE YOUR BUSINESS
This stage is important so that another person will not steal your plan or idea, you have to make it legal. It is very advisable to hire a lawyer to assist you in this legal process . To make your business legal, you must do the following;
- Have a Business Structure : Your business should have a structure, maybe it’s going to be a sole proprietorship, partnership, joint company, liability company or a corporation .
- Have a Business name : One should start thinking of the name you want to give your business, this is very important. Do your research to know if the name you have chosen can be legally used by your business, that is, if no one has registered that name.
- Register your business : After deciding on a business structure and a business name, the next step is to register your business with the Corporate Affairs Commission ( C.A.C).
- Get your Federal and State Tax ID(TIN)
- Permits and License: Get the necessary permits and license.
- Get necessary bank account : As a business, you need an official bank account to run your business.
- WRITE YOUR BUSINESS PLAN
Many business start- ups omit this step, writing a business plan is very important as it keeps you going and focus. According to Wikipedia, a business plan is a formal written document that contains business goals, methods on how to attain the goals and the time frame in which the goal will be achieved.
In simple terms, a business plan summarize your business and its goals. A well written business plan also drive investors to invest in your business. A business plan should contain;
- Executive Summary : This is the summary of all what is in your business plan. The executive summary must be captivating enough to make people want to read your business plan. It should also contain your vision and mission statement.
- Company Overview : This should contain who you are, your business goals, how you intend to operate your business , and everything about the company.
3.Products and Services : This section of your business plan contains or explains a clear description of your product or service, the cost, description of your suppliers.
- Market Analysis : This describes everything about the market for your products, your market research, your expectation on the market , how your product will strive in the market, your competitors. It also contains your SWOT analysis where you list your strengths, weaknesses , opportunities and threats .
- Marketing and Sales Strategy : This section explains how you intend to market or sell your product or service , how you will promote your business and penetrate into the market. It should also include your selling cost , promotion and advertising costs, e.t.c.
- Business Structure: This will contain everything about your business, the type of business; either sole proprietorship, partnership or limited liability company , the number of staffs you want to hire and the intended salary.
- Financial Analysis: After getting your market research, a professional accountant should be consulted to help prepare the financial analysis of your business plan. It should contain realistic financial information, which should include your cash flow statement, projected income statement and statement of financial position ( balance sheet ) for the next three or five years and other relevant information.
- Conclusion : This should highlight the key strengths of your plan, remind the reader why your business is in the best position to execute the plan , and the summary of your vision and goal.
- FINANCE YOUR BUSINESS
Most entrepreneur think this is the first step to starting a business, but we see from this article that it is not the first. Before you invest or put all your money in a business, you should have successfully gone through the 5 steps listed above. Though financing is very important in business, yet it is not the first thing to make provision for. Finding financing can be challenging especially in this part of the world. Below are some of the ways you can finance your business;
- Personal savings.
- Get a bank loan : This is one of the most common way people finance their business, by obtaining loan from bank.
- Crowd funding : It is the practice of funding a project by raising small amount of money from a large number of people.
- Loans from family and friends.
- Apply an Angel Investor: An angel investor is a high net worth individual who provide financial backings for small start-ups or entrepreneurs, typically for ownership equity in the company. They are also known as private investor or seed investor.
- DEVELOP YOUR PRODUCT/SERVICE
After financing your business, you need to develop your product and service. There are different strategies to develop your product or service. Some of the steps to take to develop your product or service are listed below;
- Always ask questions and receive feedback : As a business owner, it is often advisable to ask your questions and seek your customers feed back. You must be ready to accept feedbacks both positive and negative and must try to work on the negative ones.
- Branding : You must be able to package your product to capture customers attention at a glance and if it is a service you are rendering, you must be able to brand it and make it different from that of your competitors.
- Provide quality goods and services available to your customers : Another way to develop or improve your product is to always provide your customers quality good and service. This will give them a level of trust and confidence in your product or service.
- Protect your ideas :You can do this by hiring an IP ( Intellectual property ) attorney.
- Learn constantly : As an entrepreneur, you have to be vast in knowledge and be ready to learn new things about the market, your product or service e.t.c. Research is a great key to learning, you should research everyday on ways and how your can improve your product or service.
- Hire Professionals : Your team goes a long way in developing your product or service so as an entrepreneur, be sure those who you are going to hire are professionals in their various field.
- FIND A LOCATION
At this stage, you should decide the location of your business, whether it is a shop, building, an office or an apartment. In finding a location, some basic things need to be considered;
- Availability of raw materials : For a business that is into production, the availability of raw materials should be considered. For example, you cannot locate your company in Lagos when the raw materials for your production can be found in Abuja.
- Nearness to the market /Availability to meet potential customers : Another factor that should be considered is the nearness of your location to your potential customers, your business should be located where your customers can access you easily.
- Competitors : Another thing to look out for when determining the location of your business is the nearness to similar businesses. For a start up, if similar businesses are in the same vicinity with your business, it might not be good enough as you may not be able to compete with them.
- Costs : You must also consider the cost of establishing your business in a particular location.
- BUILD YOUR TEAM
There is a need to build your team; those who will work with you. Even if it is your business, only you cannot run it, you need people. This is the stage where you choose the kind of people you want to work with you.
- SELL YOUR BUSINESS
Most people just jump into this step without going through all other steps. After going through the stages above, you can now start selling your products or rendering your service, Since the major aim of any business is to make profit and without selling and earning revenue, one cannot make profit. Some of the strategies of selling your product or service are;
- Sell to meet customers needs : As I stated earlier in this article that for your business to be a successful one, it must meet a need or solve a problem. Assume that your customers will only buy what they need.
- Listen to your customers, know what you need and act accordingly.
- GROW YOUR BUSINESS
Though this is the last stage in starting your business, growth is important in a business. You must grow your business to keep it going. The two major step to growing your business is to improve your marketing skills to acquire new customers and retain old ones.
John is frustrated because he did not follow the steps listed above. To start, run and operate a successful business, the steps above should be taken into consideration.
To learn more, please contact us with any of the procedure you require help.