10 Economic Factors to Consider When Starting a Business are listed and explained in this article. You will find this informative.
What are things to consider before starting a business?
Nigeria is a very fertile ground to set up a proficient business owing to its increasing high population growth. Nigeria, being the most populous African country and 9th in the world, has been patronized for industrialization, by lots of foreign firms such as DSTV, Shoprite, Tecno, etc. because of its population growth.
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Doing business in Nigeria is characterized by both merits and demerits, which should not be overlooked. Setting up a business in Nigeria could seem very tough at the beginning, but interesting when you are succeeding. It is therefore important to understand underlying factors before venturing into a business in Nigeria.
There are lots of factors that need to be brought into consideration before setting up a business in Nigeria. Failure to consider these factors is a readiness to fail and run at a loss.
Business is all about risk. An entrepreneur is a risk-taker. If you are willing to take the risk of venturing into a business in Nigeria.
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The 10 Things to Consider before Starting a Business in Nigeria are as follows:
1. Know about the Intending Business
Failure to learn and inquire about a business before venturing into it could result in massive failure.
You don’t just venture into a business because someone introduced you to it and you start immediately.
It is important to know what the business is all about, what it entails, the technical know-how, the time it consumes (basic days of operation), fundamental metrics, insurance policy, tax rate, registration of the business (if need be depending on the scale you are starting with), government policy about the business and lots more.
Make your research. Meet people that are in the field already to put you through. Also, attend seminars and workshops to gain more practical knowledge so as not to run into a loss. Knowledge is power! And apprenticeship comes before mastership.
2. Conduct a Feasibility Study on the intended business
Haven got yourself conversant with the business, it is of great necessity to conduct a feasibility study about the business.
This is to help you ascertain how viable or proficient the business is. Do not jump into the business without verification by meeting people in the field to discover how productive and profitable the business promises to be. This is conducted to avoid bankruptcy.
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3. Market Demand should be considered before Starting a Business in Nigeria
Ensure your business is in line with what the market needs. Make sure your business idea is solving people’s challenges.
Have your target market. The Nigerian market needs versatility, creativity, and peculiar ideas/innovation.
Ensure you make a difference with your idea and satisfy human needs. If your business idea is not satisfying human needs, you are just wasting your time because there are a lot of competitors to swap you out of the game. Therefore, have a target market.
4. The Economy should also be considered before Starting a Business in Nigeria
Before setting up that venture in Nigeria, you should also consider the present economic state of the country. Is it favorable or not? Especially if your business entails importation and exportation.
The economy of the country can make or mar your business within a short period. Please study the economic state of Nigeria with respect to your business idea before venturing into the business to avoid bankruptcy. This can also give you a guide either to start on a small scale or a large scale.
5. Power is another factor that should be considered before Starting a Business in Nigeria
Power is another factor that should be considered before setting up a business firm in Nigeria. Most businesses need power. Power goes a long way in determining the profitability of a business.
The poor power supply is one of the basic challenges facing the successful growth of industrialization in Nigeria. Therefore, If your business doesn’t need power, congratulations.
But if your business does, you should try to get a means of stable electricity to aid proficiency in your business.
Most successful firms in Nigeria such as banks, telecommunication industries, brewing companies, and lots more, have alternative means of power supply to curb this challenge.
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6. Security should also be considered before Starting a Business in Nigeria
Nigeria has been facing a series of security challenges recently ranging from Fulani herdsmen, Boko haram, terrorism, militant fight, Biafra, and lots more.
Therefore, it is very important to consider the security of your business before setting up in Nigeria.
Security is an issue Nigeria has been battling with and has discouraged foreign investors.
Although, tremendous efforts are being brought to the table to salvage the situation.
Nevertheless, it is advisable to consider this factor before setting up your business in the country. You can locate areas where the rate of terrorism is quite low like the South-West, South-East, and part of the South-South region of Nigeria.
7. The location should be considered before Starting a Business in Nigeria
A good location is another determinant to the success of your business in
Nigeria. It needs to be considered before setting up your business. Ensure your location is close to your target market, source of raw material, distributors, security, and lots more.
8. Develop a Good Business Plan
The importance of a business plan, cannot be over-emphasized. As a business enthusiast, it is of great necessity to map out your business plan. Planning makes your business run smoothly and yields a rapid increase.
Your business plan helps you set business goals and objectives, understand your business more and provides a reference point to help you know what step you should take at a point in time.
9. Capital and Financial backup
Depending on the scale you intend to start with, get enough capital to enable you to commence your business plan.
Know the amount you need to start up your business. Also, get a source of financial backup to help raise funds when needed.
This will help you smooth run and maintain your business from time to time. You can liaise with a bank, cooperative society, etc. to acquire a loan at any point in time.
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10. Competitors should be considered before Starting a Business in Nigeria
Your competitors in that same business line are another factor to consider before setting up your business in Nigeria.
Your competitors have their own customers patronizing them already. Therefore, in order to make waves, you need to rebrand and improve on what your competitors are delivering to consumers to enable them to get attracted to you and prefer your service.
Once your product/services seem to be distinct, irrespective of your closeness to your competitors or not, people will patronize you more. Therefore, you need rebranding and versatility to be on top of the game.
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