While Nigeria’s economy continues to grow, entrepreneurs and startups might find it difficult to experience early success in the Nigerian business environment due to several inherent disadvantages getting in their way. Here is a look at both the problems facing new businesses. In general as well as some of the solutions that can be used to overcome them
Existing Challenges in the Nigerian Business Environment
New business startups might quickly learn that each of the following issues can lead to their demise. Better to be prepared for each of these problems and increase the likelihood of succeeding in your business venture.
Lack of Funding
Unfortunately, accessing the funds you need to finance your business startup is more difficult than it has been in the past. Many Nigerian investors and banks are no longer willing to assume the risk associated with new business ventures, especially if you don’t have any collateral to put up. Plus, interest rates can be incredibly high.
Lack of Incentives
Inconsistency in governmental policies, such as offering special concessions to large enterprises but not to medium or small sized busines, is another problem that modest startups and entrepreneurs face, instead of saving on their taxes like big businesses, smaller ones pay more than their fair share.
The Nigerian government isn’t in the business of making it easy for entrepreneurs to get started. The registration process is tedious, and business taxes are often high. The government does not make it easy to apply, requiring people to submit applications, apply for a license, and obtain funds before they can get approval. The Nigerian government also enforces a number of levies and taxes on specific businesses, making it difficult to realize a profit, a fact that can clearly put them out of operation.
Frequent Power Failures
The Nigerian government continues to have problems maintaining a consistent source of power for large and small businesses alike. Frequent power failure affect businesses negatively, increasing the likelihood of fallure.
Unfortunately, poor infrastructure throughout Nigeria leaves new businesses in a position requiring them to build their own facilities, source water for business use, and find a way to gain access to electricity when the power system goes out.
The status of security in Nigeria over the last decade has not changed. The government there cannot seem to keep its people safe, and the risk to businesses is just as severe as ever. Safety is a major concern, even in the absence of any threats.
Tips for Successfully Navigating These Challenges
Starting a new business is always full of a few challenges.
Here are a few tips to help entrepreneurs in navigating the Nigerian business environment.
Although it is difficult to do, amassing funds prior to getting your business up and running is a reliable way to avoid having to deal with lenders. Choosing enterprises that deliver immediate profits and growth can help provide the funds needed for rent, marketing, employee salaries, and materials.
Lack of Incentives and Government Policies
Unfortunately, the only way to handle the problems associated with the government is with patience.
Getting Through Frequent Power Fallures
Choosing a business design that doesn’t rely on a ready source of power 24/7 can help a startup strive in Nigeria. Alteratively, having access to additional funds to help you get through slumps in sales could provide the working capital you need to pay your bills and avoid failure. Perhaps the best idea is to simply buy a generator to provide power to your business whenever you need it.
Dealing with Poor Infrastructure
Taking over an existing location that has recently gone under might give you access to an affordable business venture, especially if the need for water has already been taken care of at this spot.
Staying alert to the presence of danger and knowing how to protect yourself can help you to survive many negative situations.
It is possible to sidestep, charge through, or completely avoid some of these hurdles if you begin your business venture fully prepared to handle them. Before you apply to start a new business in the Nigerian environment, you should prepare yourself in as many ways as possible.