Africa is now home to several of the fastest-growing economies in the world, and Nigeria presents tantalizing opportunities (as well as challenges) as a location to set up an international business. The country has a population of over two hundred million and a rapidly growing middle class – with greater spending capacity.
Nigeria, along with many other locations in Africa, is proving to be an attractive proposition to entrepreneurs – in fact, sub-Saharan Africa has, according to the World Bank, one of the globe’s highest rates of entrepreneurship. This is no doubt being helped by the fact that the Nigerian government has launched a number of initiatives in recent years specifically aimed at supporting entrepreneurship and promoting business growth in the country.
1. Choosing a Business Type
The first step in setting up a Nigerian-based enterprise is deciding on the type of business to set up. There are a number of sectors that may be particularly relevant if you want to base your new business in Nigeria. These include the agricultural (Nigeria, as in many parts of Africa, has abundant land resources and a large population) and tech sectors, as well as those of education and healthcare.
The fashion and beauty industry is growing rapidly in Nigeria, and so this could present significant opportunities for entrepreneurs, too. This is being driven by a burgeoning middle class with greater disposable income.
2. Undertake Market Research
This stage is vital for all businesses and is important in gaining an understanding of the market and its inherent opportunities and challenges. This will help the entrepreneur to develop effective strategies to develop and market their product or service. The main steps in carrying out market research are:
- Defining research objectives
- Identifying the target market
- Selecting the research method
- Designing the research instrument
- Collecting the data
- Analyzing the gathered data
- Drawing conclusions
Going through these steps will help entrepreneurs to make informed decisions on a wide range of things, from product development to pricing.
3. Create a Business Plan
As with market research, this is an important step in any business startup process. An effective business plan can act as a road map for a new business, clearly setting out its objectives and go-to-market strategy and including elements such as how funding will be raised and plans for growth.
As well as an executive summary and a company description, a business plan should also incorporate market analysis, comprehensive details of the products or services to be offered, sales and marketing strategies, and management and organization information. If finance will be sought, potential funders will want to see an in-depth business plan that contains all the necessary details, data, and forecasts.
4. Choosing a Location
When setting up an international business from Nigeria, there are some important things to bear in mind when it comes to selecting a location. For example, the economic and political stability of the region should be carefully considered, as well as the ease of access, status of infrastructure development, and access to relevant markets. Specifically in Nigeria, corruption and poor infrastructure continue to be a challenge, but this is an improving picture,
It’s also important to look at the competition in the area and assess the potential for growth in the location. Seeking advice from local experts is highly recommended.
5. Get the Infrastructure in Place
Next, it’s time to get things in place, such as staffing and the equipment and telecommunications systems needed. Many international businesses are now choosing VoIP systems for the latter, largely because this option facilitates cheap international calling and stable phone lines that don’t tend to drop out. Take a look at the top 10 VoIP providers to get an idea of the business packages and services on offer.
For businesses on a budget, it may be a good idea to consider used or refurbished equipment to save on costs. Don’t forget to keep a record of all purchases, including warranties, to help create a maintenance schedule.
6. Sort Out the Legalities
The final step is to sort out all the relevant legalities and licenses. These include registering the business, obtaining tax identification, and ensuring that all the necessary licenses and permits have been successfully applied for.
In Nigeria, this can be something of a challenging process, but it’s really important to get right: businesses can face hefty fines if they don’t have the necessary legal regulations in place. Arranging business insurance is also crucial. Nigerian business insurance policies usually incorporate professional and general liability insurance, workers’ compensation insurance, property insurance, and business interruption insurance.
