How to Start a Business in Nigeria
By Caleb Eze, Web Developer, December 15, 2017 1:01 am EST
These days you can find very useful information about entrepreneurship and starting a business. But often time you will need to separate the wheat from the chaff in order to get the right information.
Usually the process of starting a business begins with an idea. Once you think the idea is good enough to build a profitable business with then the next step is to develop your business idea in to a viable business plan.
A business plan is one of the most important ingredients when preparing the recipe for a successful business. Without a well written business plan, your investment in your business may just be akin to flushing money down the drain.
In this post, we've highlighted a series of easy-to-follow steps that you need to successfully start your business and execute that amazing business idea.
Step 1: Develop your business plan
Writing a business plan can be done by someone else on your behalf but it will be best for you to write it yourself.
The major aspects of an ideal business plan include:
The highlight of your business plan is found within the executive summary. Basically, the major points of the business are usually outlined in just this single page of the executive summary.
In this chapter, you'll discuss the industry you're starting your business in, while taking a look at the present and future of the business in the industry.
This is based on the analysis of your market. After the evaluation of your market, you can then proceed to identify your target market. The identity of your target market is very important because this is what influences your market strategies.
You can easily formulate the right techniques on how to impart value to your target market as a means of generating sales and boosting your company's profitablity.
Analysing your competitors' strengths and weakness will help you identify the potential opportunitie and threats in your prospective business. In terms of the weakness, you can leverage on them to create your unique selling point.
Design and Development4>
This applies particularly to businesses that are into product development. This phase doesn't necessarily apply to service based company.
In the design and development phase, it is essential you create a budget to cater for these aspects.
Operation and Management Plan
This is another important aspect of the business that many first time entrepreneur often neglect. Once you business starts running, you'll need to have an operation and management schedule that should be strictly followed. This should be clearly explained in your business plan so that you can have an idea of your inflow and outflow.
Most times, there are a lot of expenses at the initial stage of starting a business and you'll need to take this into consideration when planning your business.
You can't start a business without resources and you ill need to ascertain your resources. The best way to do that is to write down what you have. Also, you may have received support from your family and friends. In this case, you should ensure that these sources are clearly noted in your plan.
Although the written forecast for most businesses is often different from reality, it is still necessary that you write it down in your business plan.
Particularly, if you're looking for funding, one of the things potential investors often look at is the forecast. It puts things in perspective and gives them an idea even if vague of what to expect from your business.
Step 2: Register your business
The next hurdle to scale after mapping out your business plan is to get your business registered with the Nigerian Corporate Affairs Commission commonly called the CAC.
The CAC is responsible for registering all business entities in the country.
But you'll need to answer a couple of questions prior to getting your business registered.
First, what kind of business are you starting?
Basically, there are 3 types:
Private Limited Liability Company
Public Limited Liabilty Company.
Public Limited Liabilty Company.
The ownership structure of your business will influence the type of business you should start.
Secondly, what is your business name?
You'd need to take your business name to the commission to get it verified. Sometimes, the name you intend to use may already be used by someone. So, you'll need to get this sorted first before you can take the next step.
There are several CAC offices spread across the 36 states of the country. You should choose the one closest to you. You can do your registration online as the process can be done online.
Once your business name is verified, you'll be given a form to fill. Input the necessary details and pay the prescribed fee. Then, your application will be processed. After a few weeks, your business registration should have been concluded and you can move to the next step.
Step 3: Tax registration
The next step is get your company registered at the tax office. Tax related issues are under the Federal Inland Revenue Service (FIRS).
This is where you'll send the value added taxes, company income taxes and withholding taxes. It is extremely important that your get registered at the tax office closest to you.
Once you're done with the process. You'll be given a tax identification number (TIN) which you can use for your tax processes.
Step 4: Obtain the necessary permits
Most businesses are supervised by associations as a result, one of the things you need to do is to get your business properly registered with the related body. For instance, the Pharmacist Council of Nigeria is responsible for overseeing pharmacy businesses in the country.