How to successfully start your first business in Nigeria.
It is no longer news that starting the first business in Nigeria is not for the faint-hearted due to the economy of the country and the policies governing businesses, which, unfortunately, aren't favourable.
Not wanting to spend the rest of your life doing the 9-5 job is admirable. But you need to ask yourself a serious question; Do the visions, dreams, and goals that you have towards your career as an entrepreneur, Chief Executive Officer (CEO), or business owner strong enough to withstand the pressure attached to it?
If yes, congratulations! In this article, we will discuss how to successfully start your business in Nigeria, which will prevent you from making costly mistakes and fast-track your progress.
Table Of Content.
1. How to successfully start your first business in Nigeria.
2. Biggest mistakes most entrepreneurs make.
How to successfully start your first business in Nigeria. .
For you to show interest in the article “How to successfully start your first business in Nigeria’’ it shows that you are ready to make your business work. I will share the things you need to know that will help you become successful and globally known.
1. The first thing to do is to face your fears.
Be ready and determined to conquer any challenges or obstacles that will come your way. Stop overthinking and overanalyzing, just go out and do what you ought to do.
2. You need to know WHY.
Why do you want to go into business, why do you want to stop looking for a job, and why do you think that you are mentally, physically, and financially fit?
Not everyone is fit to start a business, some people can help others to build their ideas, and some can run and execute, but such people are best to work with someone else!
You need to discover your why, have you found something interesting, an original idea, have you found out something that will propel you throughout the journey of entrepreneurship?
This is not a three years journey or a five years journey in the very first lap, it is said that any business that will scale through will first go through the first lap, you need to be able to survive this entire phase of your business to be able to successfully start a business in Nigeria.
The purpose, reason, and why you’re going into business will be your propeller to help you scale through business. Once you discover your WHY and it is big enough for you, I think you have scaled through the first lesson.
3. Decide on your brand name.
It must be easy to pronounce, remember, strike a chord, and make sense. It can’t be something that would make people bite their tongue or look up for in the dictionary; it doesn’t make any sense.
Except if you are a con artist. Just come up with a name that resonates with your WHY. There are different principles to crafting a name.
4. You need to decide on the type of business you want to start.
How to successfully start your first business in Nigeria.
It could be a sole proprietorship, partnership, limited liability company, a public company. When you are first starting your first business, you will want to start as a sole proprietorship or limited liability company.
If you’re planning to raise funds or bring in more people, then a Limited Liability Company is your best shot.
Read about the advantages, pros and cons of different types of business, some of the points that you need to know before you start your first business is a sole proprietorship, or you become a partner, what are your targets customers, customers segments, what are you offering that is different from other, is it new?
5. What is your unique selling point, come up with a model business canvas. Business model canvas template link.
You will be able to decide on your unique selling point, and how you will reach out to your customers, and distribute your products, you need to register your business, so that you can open a bank account.
6. You need to separate your money from your business money, this is the only way that you can tell that you have started your business.
Just do a name search and search for your business brand name, and if it is available, fill in a form and between 48hrs to 5 working days, you will receive your certificate of incorporation so you can take your name to the bank.
It is expedient that you do this so that you can look professional when you send an invoice to your customer this carries your brand name and business account number.
The biggest mistake most entrepreneurs make.
For you to successfully start a business in Nigeria, you must be aware of some of the biggest mistakes that most entrepreneurs make when they begin in other to save yourself from such errors.
I am going to be diving straight into it. What are the biggest mistakes Entrepreneurs make? you know, most people are freelancers out there. Most are self-employed. Most just resigned from their job and they're thinking about starting their own business.
1. Never use your account number.
What happens most of the time is that when an entrepreneur gets their first customer or their second customer, they send their account numbers and then they receive income, and then they're happy.
Yay. I've made my first 1 million, you know, either from rendering a service or selling a product and then you keep receiving this money into your account. That is a very, very, very big mistake. You don't want to make that mistake.
You don't want to mix your business finance with your personal finance. And why do I say this? Because number one, it messes up your records and if you cannot track your money in your business, then you are not in business.
I can assure you that you are cultivating a very, very bad habit that will hurt you in the very long run.
So, what is the solution to this? You want to separate your business money from your money.
So you don't want to get a request from your parents about some expenses at home.
And then because your income for your business and your money, are in the same account you keep sending money from that account, you don't want to do that.
It is kissing your business goodbye.
So make sure that you create a separate account for your business and use that account strictly to receive the revenue for your business and then you can do your expense from your account.
To open a business account, you can easily register a business name within three days. Go to the C A C website. Do a name search.
You can click on this link to watch a video on how to register your business.
So with a business name registered, you can open a bank account. But even if you don't want to do that, and you probably do for whatever reason you have, just create a regular, normal savings account.
If you are currently using GTBank. Open a UBA account, open Zenith Bank, or any other account, a regular account, and make sure you are doing your expense from that second account, and then send this other account as your business account number to every client, customer, or client that you have.
By doing it this way you can be Tax compliant because you're gonna pay personal income tax and you don't wanna mix up your expense with your business expense.
You're gonna be keeping track of your income and your expenses. You wanna do a bit of basic accounting at the end of every month.
So you don't want to be thinking, oh, how did I spend this money?
Where did the money go? Make sure you separate it, this is the one mistake that most people make, and this leads to the second mistake that they make. Right?
2. When you do not place yourself on a Salary.
One of the biggest mistakes you can make when you first start a business is not putting yourself on a salary.
The biggest mistake most entrepreneurs make
You must place yourself on salary. Let me say that again. You must place yourself on salary. Why should you do that? It's very important that when you go out, you don't want to go out with your girlfriend or go out with your wife or your spouse.
And then when you wanna pay for the food at a restaurant, you bring out your business ATM card, and then you spend, you wanna send money to your family members.
You dip your hand into your business money, and then you send, and then you are in a mess.
Or you might want to pay something very urgently. You take your ATM card for your business and you pay.
Seriously, you don't want to do this. Don't do it. Make sure you don't spend your business money on your expense. Let me, let me explain why don't do this.
So the simple reason why you don't wanna spend your business money for your money is that they are two different entities.
Your business is your business, it's a separate living organism of his own, and you are a different human being. So treat your business with respect. Don't steal from your business.
And as a matter of fact, placing yourself on salary is the best solution. Separating your business money from your expense.
You will be able to discern how much you have to spend and to use on any emergency expenses.
You will be able to also spend your business money strictly on your business expense. For instance, when you want to buy a new laptop for your business, you can take the money from your business account and not from your account.
When you want to go on a business trip or want to make business calls, buy new equipment, etc.
It helps when you bring investors into your business because when you can, they can see from day one that your records are intact and that you have a very clean record. This produces trust from your investors, and it reduces or takes away the fear of you squandering the money.
That you are not spending business money on personal things. It tells investors that you are in good shape. To ensure that you keep your business surviving for the next few years, make sure that your money is separate.
make sure you pay your service salary. You can say, oh, I don't have enough revenue in my business to pay myself salaries. if you're doing negative revenue right now because you're making losses, just give a value to yourself and place a number on your salary and add it to the negative amount.
And unless, and as you offset your losses, then you can offset yourself. Or what I say is when you're negative, maybe you just do a zero. You don't pay yourself anything. But make sure that within a very short time, no matter how small revenue you're making, you can even pay yourself 5,000 every month.
Maybe you're making a revenue of 50K every month. , place yourself in a 5K salary, please, no matter how small it is.
Just make fact this motivates you because if you're doing all the work and you're paying other people, if you can't see that from your account a little amount is coming from your business, and then you don't get motivated.
But if you place yourself in a fixed amount, no matter how small, within a short time, you will see that there is this energy to increase the revenue of your business. And as the revenue of your business grows, so does the income for your salary.
If you avoid these mistakes that most freelancers, self-employed and do; not only will you will be able to successfully start a business in Nigeria, but your business will survive the next 50 years.
In truth, there are lots of factors that are responsible for establishing a successful business in Nigeria, but, if you can implement all that was stated in this article, establishing a successful business in Nigeria is guaranteed.