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How to Start a Business in Nigeria with Small Capital

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Starting a Business in Nigeria

How to start a business in Nigeria without any money or capital. So you have read so many articles on how to start a business of your own in Nigeria. You have even read books written by Nigerian authors on this topic because you feel these guys could give what you are really looking for (based on the fact that they have built experiences while starting their own).

Some of your friends have even suggested biographies. Biographies of the likes of Femi OtedolaAliko Dangote, and so on but you still find the birth process of your business unrealistic. Yes, I have been there too.

In fact, not long ago and I must tell you some of the things I discovered during my hibernating process were very disturbing. Let me quickly share these findings with you. Who knows? You might have discovered them too.

A. I discovered that most Nigerians think there is a 1 size fits all guide when it comes to starting a business especially in a place like Nigeria (but looking deeply, this is not true).

B. I discovered many writers who have written on this “How to” don’t really have an experience (personal experience) to share. They are just trying to sell their books, product, or whatever service they are into. The real people that know the answers to this do not even have blogs or have written books on the topic.

These mentors or whatever you can call them just face their business. The only time you hit the jackpot is when you are opportune to meet them and have a chat.

C. Most writers tell us what we want to hear not what we really need to know.

I compare this to cloth sellers at Eko. They never tell you what you really need to know when it comes to buying a product. They just want to tell you how good the product will look on you and how you will stand out from the crowd. These writers will not tell you how easy it can be to give up when your business is not growing.

They won’t tell you is likely to fail especially in the first 3 years of its existence (according to experts). They just tell you it is possible. Do not get me wrong. I am not saying these materials online and in books are not useful. They are; because if not for them I might not have been able to pull this article together or pushed myself to start my business 2 years ago.

Now that we have established all this, let us go to the real reasons why you’re reading this article. How can you start a business in a place like Nigeria, especially with no funds? Because really starting a business in Nigeria is different from starting a business in the USA or India.

How to Start a Business with Little Capital in Nigeria

Here are ways on how to start a business in Nigeria.

1. Choose Business of Choice

This is the number one step to starting a business in Nigeria with no money. It is funny when people think starting a business in Nigeria is all about going into what others are doing (because of the massive profit). And some people think the actual problem is cash (Capital) not even how to start but this is not true.

I will talk about this as we progress in the article. Here’s a bit of golden advice – Do not start a business because everyone has told you about the massive turnover it yields {this can be deadly}. Start a business because it’s what you’re passionate about and you believe you can do more.

From what I have heard Steve Jobs did not start Apple Inc. because he wanted to join the League of Tech Producers. He started Apple Inc. because he was passionate about tech and he believed there’s more to producing Tech.

A long time ago even before Android phones came into existence Steve Jobs believed it was possible to produce a phone that was without the qwerty key buttons. So the question is what do you want to do? What are you passionate about? What do you want to be known for?

Steve Jobs is known for Tech

Henry Ford is known for Cars

Ralph Bamigboye – Blogging

Linda Ikeji  – Blogging

Yomi Casual – Fashion

AY – Comedy

2. Seeking Advice Early

This is the second step to start a business without any money. Now that you have thought of what you want to do, it is time to start seeking advice and seeking them early majorly from those in the kind of business you want to go into because one of the best ways to know your guts around something is to learn from professionals.

And when you finally meet them and they start teaching you don’t be in a hurry to leave after getting the idea of how the business works. Stay till when your boss/mentor/guide tells you you’ve learned enough. Earlier, I talked about learning majorly from professionals in your line.

Now let us move to learn from bosses (professionals) outside your scope like financial advisors, counselors, brand consultants, and so on. You need these people because they’ll teach you how to carve your niche in this business your about to start. Please

Note: You might need to pay these people in cash or kind before the majority of these people can give you listening ears so prepare yourself.

3. Create Awareness for your Business

Yes, start marketing your goods or service now. Do not wait for capital to start before you tell people what you do. In fact, if you do this well I mean “hype” and people see that you’re really serious and passionate about this business. Your friends and family may be pressured to invest in it and before you know your business has started.

Another edge you have by doing this is; asides that it makes people know on time that this is what you do, it makes you feel and look like someone who knows his guts in that business many years down the line. I started updating my DPs with what I wanted to sell even before I had the capital to start my business and it made me realize 2 important points I never thought of.

A. It made me really sure it was the business I want to do. After so much hype on my social media accounts, my passions and the demands I got from family and followers made me know I was doing the right business. It showed I was in the market to meet a need and not to waste time.

So introducing the goods or services to the world helps you test if the goods or service is really needed in the market before you start wasting your funds and resources.

B. It made me also realize the specific product people need. After some months of uploading my would-be product on WhatsApp and Facebook. This method helped me know what specific product customers asked for more. It made me know products in high demand; making me know which product exactly I should invest my capital in.

I must make something very clear at this stage. Do not give false information about your goods or services to intending customers. Do not tell them your product can fly when it cannot walk or even crawl. THIS WILL BACKFIRE. Be honest with your customers. Remember It’s not about them just buying your products or asking for a service.

It’s about you keeping them forever as a customer. This is what really sells if you want to make it in any business. Tell the truth if you’re just gaining experience. This might help them forgive you easily if you make little blunders in the business and it will also bring better advisers to your business.

The most provocative improvements I have done to my products are improvements suggested by customers.

Note: be careful when taking advice from customers as they give the advice to suit them not to suit your business. Not all advice should be considered. Creating awareness for your products and services is very important if you really want to start a business in Nigeria without any capital.

4. Start with Little Capital

Asking for help and starting with what you have is very crucial when it comes to starting a business in Nigeria with no money. After creating awareness about your product or service for 3 – 6 months or 1 year (depending on how long, it is time to start the business with the little capital you have.

Based on all the research you have got so far by posting your product or service online. You should be sure what you want to do now. There’s no secret formula to this. Buy your goods and start serious marketing and more thing: inform your customers the goods they’ve been asking for is now available.

If it’s a service start offering the service to people at the cheapest rates (price) so that they can patronize you without thinking twice and if you don’t have the capital (no cash) to start I have another option you should try – approach friends and family to invest (for support).

NOTE: I am not saying you should now start meeting everyone you know for money. No! Approach only those you are sure will support you, those who believe in you and your dream (business). This will help you get the support you want easily.

Approach these people, tell them about the business, and explain well in detail. Don’t sound desperate while doing this. After your explanation, tell them you please need their support and that any amount they can invest will go a long way in starting the business.

If 5 or more people invest with significant capital then it’s about time. Your business can start fully. Please don’t blow this out of proportion and don’t give excuses that the money you have or have gathered is not enough because it is.

There are always ways to cut costs especially because you’re just starting. It’s not a must to rent a space or a shop if that might take a large part of your capital. You can start the business from home. The major thing is to buy goods.

Yes, a shop or space is not really important (depending on the kind of business). For now, you can take your goods to the customers instead of them coming to you. Take products to banks, schools, organizations, and companies. Introduce and sell to them.

When you make enough money you can now rent a space or shop. For example, if it is a business that renders services like fashion designing – sewing clothes. You don’t need to rent a big shop and furnish it before Nigeria knows you are open for business.

You can start by buying just a sewing machine and sewing in the corner of your room for customers and put your heart and soul into the job and I tell you one day the world will know you and what you do. Do not forget here also to create social media accounts for your business – as this will advertise you to the world.

5. Keep your Sales Records

This is very important now because your business is now official. A serious need to keep an account and remember your business is still growing so you need to track your expenses and really know your profit on a monthly and yearly basis.

You need to know the cost of transport, cost of maintenance, cost of material, cost of this, cost of that to really know how much you will charge your customers (without charging absurdly) and still make a profit. Asides from all these, you will need to keep records for the investor’s sake.

Remember your first investors were family and friends, to get more funds in the future, especially from microfinance banks, the Bank of Industry (BOI), and the likes you will need to tender your business account history.

Telling them with word of mouth that your business makes profits will sell. They will need to see your financial accounts.

6. Invest your Profits in Business

Yes, at this stage just in case more capital is not coming to keep the business afloat. One of the ways you can keep your business alive at least for its first 3 years is to always invest profits made from the business back into the business.

Do not be in a hurry to start changing your lifestyle by buying a car or impressing people by buying a Rolex wristwatch. Pump all your profits or at least half of your profits into the business again and again. You’ll thank me in the future for this.

7. Serve your Customers

Now that your business is moving fine continue to look for better ways to serve your customers. Improve yourself and improve your business, improve on your delivery, and create more solutions. This is what sets you apart from your rival in the market (if you have one).

Conclusion

Starting a business is all about having discipline and creating ideas. I’m sure all these practical steps I laid down for you will work because they worked for me. Just put your heart and soul into this. Believe that everything will work for you and have patience and everything will work out for you.

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Ralph Bamigboye is an Accountant. He is the owner of TheInfoWorth.com, NetWorthVerse.com and Finance Naija YouTube Channel. He has helped many individuals to start their businesses and make money online. How can he help you?

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