In this post we will be looking at the Requirements for business setup and How to Start a Profitable Business with Little Capital in Nigeria.
INTRODUCTION.
The major dream of most Entrepreneurs is to someday have their own business. Having your own business is sweet because you can afford to do things when you want it without your boss looking over your shoulder. But as cool as it sounds, starting a profitable business is a very demanding task that only a few businesses survive. Business is work relating to the production, buying, and selling of goods or services. There are no limits to who can become a business owner or an entrepreneur. You do not need a huge sum of money in your bank account or a degree to become run your own business. However, what you need is a good business idea, a concrete execution plan and passion to wake up every morning and keep grinding. The principal law guiding the starting of a business in Nigeria is the Companies and Allied Matters Act (CAMA) Cap C20. There are different types of business entities that can be registered in Nigeria. The choice of business to set up is influenced by various factors such as control, limitation of liability, cost, the complexity of formation, tax implications, purpose, capital and ongoing administration. There are different types of business structures that can be set up in Nigeria; each of these structures has peculiar identities and requirements to suit the purpose of business.
There are two major types of business structures in Nigeria, which are briefly explained below:
A Registered Business: Business name is a name and style in which a person trades. this type of business structure is also popularly called a “Sole Proprietorship” is the simplest form of business one can operate in Nigeria. It is registered with the Corporate Affairs Commission and It is not a legal entity that can sue or be sued in its own name. The owner of the business is responsible for the debts and liabilities of the business. The advantage of this type of business set up is that the owner of the business bears all the profit and loss of the business.
A private company limited by shares: A private company limited by shares, often referred to as LLC in many jurisdictions is a separate entity different from its members. Unlike the business name, it takes a minimum of two persons to form a private company in Nigeria. There is corporate governance set in place for running a company such as shareholders, directors, secretary etc. This kind of business set up is a legal entity that can sue and be sued in its own name.
Starting an LLC in Nigeria must be commenced with the due incorporation of the business with the Nigerian company house- Corporate Affairs Commission (CAC). An LLC or private company limited by shares is an ideal type of company for any investor seeking to invest in Nigeria.
Requirements for business setup in Nigeria are as follows:
- Registration of a Company
- Registration with Nigeria Investment and Promotion Commission (NIPC)
- Tax Registrations and Tax Clearance Certificate
- Business Permit
- Expatriate Quota
- Combined Expatriate Residence Permit and Alien Card (CERPAC)
- Bank Account Opening and Capital Importation
- Appointment of Auditors
- Company Secretary
- Office and Property Acquisition
HOW TO START A PROFITABLE BUSINESS WITH LITTLE CAPITAL IN NIGERIA.
the following are key steps and processes of what you need to start a profitable business in Nigeria.
- Evaluate yourself: Since you have made up your mind to start a business, you need to carefully evaluate yourself by asking these questions to yourself.
- Do I have the skills needed to run this business?
- Do I have what it takes to lead or manage a team?
- Do I have what it takes to raise capital for the business?
- Do I have the passion and motivation to make this a success?
So, be very sincere with your answers and if the majority of your answers to the above questions are “YES”, then you are ready to start your own business.
- Find a business idea: When it comes to starting a business, not all business ideas are worth starting at all. The best business ideas are unique, practical, needed by the market and easy to scale. In the search for a business idea, start by looking at what problems exist in your environment and try to provide a solution to such a problem and monetize it.
- Conduct market research: Before starting a business, be sure you have a good understanding of such business. Try conducting market research by asking your potential customers few questions about the problem you will like to solve for them. Also, research on existing direct and indirect competitions that currently exist in the market. Try to know about their products and services and how you think your business can stand out amongst them.
- Feedback: It is one thing to conduct market research when you want to start a business, it’s another thing to properly utilize the feedbacks gotten from your research. The whole essence of this is to help you know more about the business you want to start and helps to form a strong foundation for the business.
- Create a business plan: According to Wikipedia, A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals. For every business, whether big or small needs a plan for that business. In starting a business, a business plan helps you to stay focused and organized. Remember organizational skill is one of the skills of a successful entrepreneur. Therefore, in writing your business plan, you check out some business plan samples online to serve as a guide.
- Get business funding: Starting a business does not only require your skills and effort but also your money. Every business requires a startup capital which will be used in funding the day-to-day operations of the business. In case you do not have the required capital required to start the business, there are different ways (bank loans, grants, equity investments etc.) to source for funding for a new business. Most businesses die due to lack of funding hence make sure you’ve enough capital that will cater for the financial down times.
- Business Registration: Registration of business is very paramount for everyone that wants to start a business. You should register your business with the government of your country or with the body responsible for business registration in your country. For example, if you are a Nigerian business you can register your business with Cooperate Affairs Commission (CAC) at the federal level and then with Chamber of Commerce at the state level. Registering your business with the required bodies gives validity and authenticity to your business.
- Build Your Team: If you are planning to be the only one running your business, then you may not need to start building a team. But if you are definitely going to employ people, you need to build a strong team. You are building a strong team for your business because these people are meant to contribute to the growth of your business but if the team is not well built, they can as well help to bring down your business.
- Grow Your Business: Growth is vital to the survival of a business. Any business that is not growing will surely die no matter how long it takes. Make sure you do everything possible to ensure the constant growth of your business. The number one metric to measure the growth of a business is a steady positive cash-flow. The more cash-flow a business generates the more ability it has to grow and expand the business. Hence, ensure that you have the right tools to help you keep track of your cash-flow from day one of the business.