As an aspiring entrepreneur, the realities you will face in starting a business may not be readily captured by a simple business plan. Here are some of the elements you need to consider in getting business right as you make plans to jump out and execute that business idea.
By Teju Abisoye
The internet has a plethora of articles on starting or formalising a business; most of which are rather generic and not tailored to any particular industry. Nigeria is a vibrant and ripe economy for starting a business with a host of ideas everywhere you turn. However, the actuality of starting a business in Nigeria can present itself as a daunting task. Aside from challenges that may arise such as inadequate capital, staffing challenges, choice of location and overall business viability, a potential business owner will almost certainly encounter a number of regulatory considerations from concerned Ministries, Departments and Agencies (MDAs) which can be easily overlooked while developing a fantastic business plan. The importance of these legal and regulatory considerations cannot be overemphasised, as they will almost certainly involve a level of financial commitment e.g. taxes, fees and permits. Failure to comply with these regulations can often times lead to dire consequences such as business closure and fines for entrepreneurs, and may affect their ease of conducting business in a particular location.
The aim of this article is to provide some level of clarity the steps required to start a successful business venture while taking into consideration very important legal and regulatory aspects.
- You are ready to start your business, so what’s next? By now, you already have a business idea and fancy business name. It may help to have your great ideas documented in a business plan and undergo some desk and market research to ensure the viability of your business. It will be beneficial to identify your competitors and closely examine their business models; not to replicate them verbatim but to improve on those aspects that you consider as areas of competitive advantage while including your new ideas. At this stage, you should consider having mentors who may or may not have operated in your proposed industry as a highly useful resource for guidance and direction. If possible, join a business association to receive mentoring and support from business owners in similar ventures.
- Regulations, Regulations, Regulations!!!: The importance of complying with stipulated business regulations as enacted by the Federal Government of Nigeria is of critical importance:
- Business Incorporation Certificate: Firstly, a business owner will have to register the business with the Corporate Affairs Commission (CAC). In the past, this was a very laborious process that took weeks or months to complete, but recently there have been improvements made due to the work of the Presidential Enabling Business Environment Council (PEBEC), which was set-up by the current administration to improve the ease of doing business in Nigeria. As a result, you can now search for and reserve a company name within 4 (four) hours, and register a new company) within twenty-four (24) hours from the time you submit the required and correct documentation for registration with the CAC.
- Tax Matters: It is also important to register your business with the Federal Inland Revenue Service (FIRS) and your state tax agency to remit your taxes regularly. These processes have now been made fully automated by the FIRS for federal taxes, and in some states like Lagos and Kano.
- Local Government Fees, Levies and Permits: Many businesses in Nigeria are sometimes approached with demands by unauthorised Local Government operatives. It would be beneficial to make a trip to your local government council at the start to confirm all the business fees and permits required in order to ensure you are allowed to run your business unhindered.
- Product Registration with SON/ NAFDAC: If you are selling a product, it is important to make your products available for inspection and approval with the National Agency for Food & Drug Administration & Control (NAFDAC) or Standard Organisation of Nigeria as may be required. Product registrations can be done online on the NAFDAC website, and again due to the recent reforms of PEBEC, timelines for registrations have reduced significantly..
- Acquiring an accessible location: Your business location provides a meeting point between you as a business owner and current/prospective customers. Unless your business is run online or does not need a physical location, it will be beneficial to acquire an accessible location. This is heavily dependent on your available capital. The good news is that if you are in Lagos or Kano, it has also now been made easier and cheaper to register your business premises or property.
- Building your brand identity:
- The importance of bookkeeping:
- Creating and regularly updating your marketing and sales plan:
- Hiring and training your staff:
- Customers are your first priority:
The improvement of the operating conditions of small businesses is our top priority at the Lagos State Employment Trust Fund (LSETF). We seek to assist MSMEs in the following ways.
- LSETF Training & Learning Centre: We have created an active learning centre which includes articles, infographics, presentations, blog posts and videos to educate business owners/individuals on topics centered on entrepreneurship and employment. The learning centre is situated on the website page and content is shared on our social media platforms (Instagram, Facebook, Twitter and LinkedIn). You can access our page using this link: https://lsetf.ng/learning-centre
- Skills: We bridge the skill gap for MSMEs in hiring staff in different sectors especially construction, creative, digital, health, hospitality and manufacturing.
- LSETF as an Intermediary between MSMEs and Government Authorities: We investigate policy issues that affect small business and intervene /mediate on their behalf with Lagos State Ministries, Departments and Agencies (MDAs). LSETF also prepares periodic policy documents/recommendations to oversee MSME intervention activities to boost wealth creation and employment in Lagos State.
Here are some important websites to visit for more information:
- Business Made Easy www.businessmadeeasy.ng
- Corporate Affairs Commission (CAC): www.new.cac.gov.ng
- Federal Inland Revenue Service (FIRS): www.firs.gov.ng
- National Agency for Food & Drug Administration & Control (NAFDAC): www.nafdac.gov.ng
- For complaints and enquiries: www.reportgov.ng
Editor’s Note: This article was originally published in The Spark Magazine. Find the magazine here to read other articles.