The best business ideas that are leading the way in Nigeria

Putting The Puzzle Together
Image courtesy of Ken Teegardin at Flickr.com

Nigeria has recently been dubbed as the hub for startups in Africa becoming the country that generates so many successful business ideas turned lucrative businesses that it’s tough to keep track. In fact, Nigerians are setting an example to many other countries showing a slow but steady diversification of their economic structure, stepping away a little from their sole valuable resource for years: oil. This new generation is opening doors and demonstrating that they are a new kind of entrepreneur who can identify and execute innovative business opportunities.

Nigeria’s pool of business opportunities has become quite large in a number of different segments. So, if you’re looking for just the right business idea to develop this is a great place to start.

Fast food business

Getting a food business right is the key. There has to be a mix of good customer service and management, besides the obvious initial capital investment. You do have several options to open a restaurant, either start from scratch or acquire a franchise.  

E-commerce

All of the tools and the collaborative community available at your fingertips will make any ecommerce business easier to get off the ground. This a low-investment start up that allows for easy and on-the-go adjustments with a quick learning curve. The other big advantage is that there are tons of tools to measure the effectiveness of business strategies along the way.

Agriculture

The potential behind agriculture has spread to a few different types and is now leading at the front of business ideas as a replacement for the oil business. Poultry farming is one of the biggest ones, and giving up to 30 million Naira annually. Cassava, which up to recently had not been explored, is now on the rise especially since it is a main ingredient in many dishes in Nigeria. Snail rearing is also on the list, although many people are still not doing it on a large scale. Finally, rice farming, which if managed correctly can bring in a big return, will be able to compete with imported rice and fill the need of the food by choice of Nigerians.

Construction business

The Nigerian population continues to rise and so does the need to build housing. Trying to keep up, the construction and housing business has boomed in the past few years. There is great demand for variety, so there all types of projects available. The investment is considerable, not as much as other businesses, but what you can be sure of is that you won’t be short of work to make the return.

Hotel business

This is a quite competitive business, but if done right it can be just the right timing to get into the hotel and tourism industry. This business idea will require a large amount of capital, planning and patience since it is not a quick return. The key will come down to customer service to get visitors to return and attract new ones.

Abuja Nigeria Sheraton_startups in Africa_Nigeria_cecilia ibru
Image courtesy of Jeff Attaway at Flickr.com

Haulage services

This is a good business idea that responds to real need in Nigeria. The rail transportation system in Nigeria is very poor, so having alternative for shipping goods is an excellent service to offer.

Dry cleaning

Dry cleaning tends to be a quite expensive business in Nigeria, so finding affordable rates and good quality service is very scarce. To be successful you really have to set yourself apart from the current services offers by keeping to deadlines and offering fair prices.

Furniture business

Again in this case the imported furniture is quite expensive, so being able to design and assemble furniture locally can also be a great business idea. You don’t necessarily have to be a carpenter, you could outsource and just make sure to get a responsible and punctual provider.

Online advertising agency

As mentioned before, there has been an increase in all things online related, so of course other business ideas surge from the booming industry. One of the most relevant nowadays is online advertising which takes care of promoting online businesses and managing marketing strategies for them.

Fashion and entertainment business

There has been a boom in the entertainment business in Africa in general, but Nigeria has definitely stood out especially in music and movies reason why it was coined Nollywood. In 2009 it had surpassed Hollywood as the world’s second largest movie industry, preceded by Bollywood. With this in mind, it is no surprise that the fashion industry followed in line and started to cater to all of the new national and international stars of the Nollywood industry with its particular style. They are setting trends, making big moves in the movie and music industry, so being part of this growing community right now would be a smart business move. The important this is to know where you would fit and what service or product you could offer to the already structured segment.

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Image courtesy of j-No at Flickr.com
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Amazing startups in Africa led by women.

When the word Africa comes up , what do you think of? Safaris? Lions? Discovery channel ? maybe in political problems and violence all across. Well, it may have been like this in the past, although safaris are a big thing in this continent, violence is slowly disappearing  and giving way to a thriving economy and fresh new ideas.

We cannot deny that Africa has a violence history, especially towards women who are  the ones who suffer more in any violent conflict. But it all changing now. New business are popping up, tourism is growing at a fast rate, and women are getting the spotlight they deserve and are cashing in on some new and fresh ideas.

Here are some of the African startups led by women that will impress the world.

BeautyRevNG.
This startup is led by Louisa Kinoshi who from an early stage of her life, was always amazed and attracted to make up  and the way it transformed the looks of women. She felt a little discouraged by the fact that not so many African women or models were featured in top fashion magazines. In order to change that tendency, she created a web page which makes it easier for women in Africa to purchase and discuss both local and international  make up products. Her first pilot had an investment of $5.000 dollars and it quickly turned inti a $57.000 turnover company. He says her aim is simple. She wants people and the fashion industry to turn their eyes on African make up styles and think that it is as cool as any other make-up brand. Even better and more stylish.

KAMOKINI.
Kamokini is a swimsuit company led by Kambili Ofili-Okonkwo. The story goes something like this. She wanted to purchase a swimsuit that allowed her to show some parts of her body but cover others that she thought were a bit too much to show. Having no other options, she had to look at the international market to purchase her swimsuit and there is where she saw an opportunity. With a good educational background, she started to create her own designs based on what women in Africa thought  a good swimsuit should be like. Combined with her knowledge in engineering and supply chain management, she started her company to supply the African market. Now her presence is wide in the emerging beach, pool party and resort markets.

HEELS IN THE KITCHEN.
African food is not as popular as other cuisines such as the Italian or the chinese cuisine. This encouraged Imoteda Aladekomo to start her idea. She has always had the passion for kitchen as she had to cater for her family after long working hours, she enjoys crating and serving tasty meals that can be made easily. Her aim is to become the next big star chef in the TV with a program already filmed. She wants to makes her dishes well known around the world to non-African women and is planning to expand merchandising in the near future.

OMO ALATA FOODS.
Omo alata is the Yoruba name for “spice seller”. Kasope Ladipo-Ajai came up with the idea after understanding that she didn’t have enough time, after a full working day and hours among traffic,  to get home and prepare the traditional stews for her family. After living abroad and seeing the quick service and pre-packaged meals industry worked, she came up with the idea with her husband. She is now tapping into the fast growing middle class market in Africa that are demanding high quality packaged products for their local Nigerian pepper, soups and stews for their meals. She also focuses on the natural ingredients in her products by not using any colouring or artificial preservatives in the production process.

Spice market_startup_africa_cecilia_ibru
Image courtesy of C. Mario del Río at Flickr.com

INSTAHEALTH.
This Uganda based start-up aims to become a pan african health app that can provide health information to lower income communities that don’t have good access to these services. Africa has a vast expansion in technology and some services such as education, electricity and health have not kept up with the change. Telecommunications engineer Brenda Katwesigye founded  her business in her last year at Makerere University to enable users to directly connect with health centres, ambulances , specialists and consultation services using a geo-location and  voice response system. It also provides first aid information to users that are in need of information but cannot be reached ion time by healthcare providers.

U.S. Army Africa medics mentor in Botswana_startups_africa_cecilia_ibru
Image courtesy of US Army Africa at Flickr.com

Africa is now an emerging country where violence has been left behind and new thriving businesses are popping up in every corner. Women are not behind in this trend and now you have glimpse of some of those startups that will have you talking, and why not, maybe looking for an investment opportunity.

4 Steps to Launching a Successful Business in Nigeria

Nigeria has witnessed a sudden boom in the number of incubators and accelerators available to support entrepreneurs. With this network of support, the country has become a major hub for African startups. Nigeria also attracts entrepreneurs and investors with its relatively low tax rates and large, multiethnic population with purchasing power. In addition, the country represents Africa’s largest national economy, and it has a low debt-to-GDP ratio. Despite the obvious benefits, many would-be entrepreneurs do not know how to start a new business in Nigeria

For those who are interested in turning a great idea into a thriving business, the following tips can help them get on the road to success.

Write a solid business plan.

notes-514998_640The success of virtually every company lies in the amount of planning that goes into its creation. Writing a business plans helps entrepreneurs think through their ideas and create a logical, stepwise process for reaching their goals. The business plan serves as a guide throughout the life of the business. Entrepreneurs can return to it at any time to get back on track or to get a better idea of the next steps to take to expand the business. For many, the plan becomes a source of inspiration and motivation. The startup path is a difficult one, but the ability to refer to a document that provides a comprehensive game plan makes these struggles easier.

Some estimate that more than 85 percent of Nigerian small businesses operate without a business plan. Without this all-important document, business owners won’t know when they have strayed from their original plan, and more importantly, they will have trouble getting back on track. A solid business plan is moreover necessary to receive funding, whether from investors or banks, because it demonstrates that an entrepreneur has more than just a good idea. A solid business plan shows that an entrepreneur has conducted the necessary research to answer major questions about the business’ target market, product or service, operations, and leadership structure.

Get acquainted with the market.

Before launching a business, individuals must have a thorough understanding of the market, meaning both the local market and the broader industry. People should understand where their business fits into the larger picture, including the competition, and they should know what value they offer to customers. Once people get a handle on the market, they must continue to follow it closely because changes can occur quickly and the company that responds the quickest is usually the most successful. It’s also important to remember that changes occur both within local markets and across an industry as a whole.

Market research is an invaluable aspect of the feasibility study, which asks why and how a startup will succeed, given current market conditions. While entrepreneurs should trust their gut in many situations, the truth is that they need more support than that before risking their livelihoods on a new venture. All information upon which decisions are based should be researched and verified. Starting a business blindly sets the venture up for failure.

Secure registration and licensure for the business.

Entrepreneurs should pay close attention to regulations in order to avoid missteps that could potentially cost a great deal of money, or jeopardize their business entirely. Most businesses in Nigeria operate as sole proprietorships, but entrepreneurs should seriously consider also registering a business name with the government’s Corporate Affairs Commission. Other business type options include public or limited liability entities. Other licenses and permits may be necessary depending on the industry and the market as well. Ideally, entrepreneurs should enlist the help of a reputable lawyer to guide them through the process, in order to avoid mistakes and bureaucratic red tape. Lawyers can also help entrepreneurs draft sound business policies and legal terms of operation.

Look for startup capital in a variety of locations.

Anywhere in the world, financing is always the most difficult challenge for entrepreneurs. Nigeria presents its own challenges, but securing funding has become easier in recent years. The right approach to funding largely depends on the type of business than an entrepreneur want to create. Smaller operations may not need much money to get off the ground. In these cases, an entrepreneur may already have enough capital in the bank or may be able to fundraise enough from their friends and family to get the business running. In other cases, more traditional funding routes may be necessary.

Entrepreneurs should exercise caution when approaching a bank for a business loan. If the company starts off with a massive debt on its shoulders, it is that much easier for the business to fail. Business owners should make sure that they are getting a decent deal and that the terms are favorable and flexible enough to accommodate the typical fluctuations in startup revenue streams.

Entrepreneurs should not be afraid to be creative when it comes to funding. Some companies can open their doors without any loans by negotiating a line of credit with their suppliers. Other companies have created strategic partnerships with larger organizations capable of financing them. In this situation, the terms of the agreement should be scrutinized by a lawyer to ensure they are fair. Companies may also want to approach potential customers to secure a contract that guarantees immediate income and precludes the need for loans.

The 3 Most Exciting Cities in Africa for Entrepreneurs

Africa boasts some of the most exciting markets for entrepreneurs. Countries like Nigeria, South Africa, Kenya, Ghana, and Uganda have incredible opportunities for people interested in founding a company. While a number of cities in the continent provide access to funding, business development support, incubators, and accelerators, the following three cities are among the most advantageous for aspiring entrepreneurs.

  1. Cape Town, South Africa

Cape Town has become a magnet for entrepreneurs in South Africa and other African nations, largely due to the city’s recent increases in funding availability and general atmosphere that is supportive of risk-taking. Over the last few years, many people have moved from Johannesburg, the most populous city in South Africa, to Cape Town to take advantage of the city’s available business opportunities, and an impressive number of people have left their day jobs to pursue entrepreneurship.

Because Cape Town contains the highest number of information technology companies in the entire continent, these decisions are not unfounded. Consequently, Cape Town has become a major hub for industry and is growing quickly. According to recent estimates, the annual growth rate of the city’s IT sector stands at 8.5 percent.

Angel investors are becoming increasingly popular in Cape Town. Through the organization AngelHub, a growing network of angel investors are pooling funding and providing coaching and other forms of support to aspiring entrepreneurs. Successful entrepreneurs who live in Cape Town have also been known to personally invest in ideas they find particularly impressive. In addition, the city boasts a number of venture capital firms also exist in the city, including Knife Capital, Intel Capital, Hasso Plattner Ventures Africa, and 4Di Capital.

Once companies advance past the initial startup stages, they can approach one of several private equity firms to secure the funding needed to grow their companies. These firms also provide great advice for making a middle-stage startup more profitable. Among the key private equity firms in Cape Town are Ethos Private Equity, Horizon Equity, Sanlam Private Equity, and Acorn Equity.

  1. Nairobi, Kenya

Over the last decade, the tech sector in Nairobi has grown dramatically. This has created new revenue streams and increased the number of innovative services available to entrepreneurs. As a result of this growth, which has resulted in annual revenues in excess of $360 million, Nairobi has earned the name “Silicon Savannah.”

Previously, few Kenyans could get online, and those that did had to rely on expensive satellite services. However, Kenya’s government recently installed four major Internet cables along the coast of Kenya, thereby assisting the growth of technology firms by increasing the number of Kenyans with access to the Internet. Today, 99 percent of the Internet in Kenya is accessible via cell phones, which more than 70 percent of the population owns. The prevalence of this technology has created a tech-savvy pool of potential employees.

The growth of technology may also have been spurred by the success of M-PESA, a mobile payment system that has become widely accepted by Kenyans. This system likely inspired and motivated would-be entrepreneurs to pursue their own revolutionary ideas.

At present, six different startup hubs exist in Nairobi, and more are expected to launch in the near future. Eventually, each hub will focus on a specific niche, serving as a great resource for entrepreneurs seeking support and assistance in that particular area. The hubs will likely become even more important as they attach to local incubators and organizations such as the Savannah Fund, which generates seed funding for Nairobi entrepreneurs.

  1. Lagos, Nigeria

The rise of several notable startups, including iRokoTV—“the Netflix of Africa,” has attracted a number of innovators to Lagos, turning the West African city into significant business magnet. The region’s startup hub is actually Yaba, a Lagos suburb that many refer to as Yabacon Valley. This area houses many of the banking and financial centers of Nigeria, as well as several notable institutions of higher learning. Nigeria has the second-largest growing economy in Africa, and this has spurred the emergence of a middle class eager to adopt new technologies.

Many angel investors and venture capitalists have begun paying attention to Lagos. This past July, the city became the first African host of StartupWeek, an event that celebrated small business owners and startups in Lagos over the course of five days. The scheduled activities included meetups to boost the growing startup culture, as well as panels and keynotes speakers that addressed relevant entrepreneurial questions. StartupWeek has taken place in 75 other cities around the world, and the decision to bring the event to Lagos before any other African city points to its rapidly growing economic potential.

Some other benefits of starting a business in Lagos include the presence of Angel Fair West Africa, which helps companies secure early-stage funding, and the arrival of new incubators and accelerators, such as 88Mph, which also has offices in Nairobi and Cape Town.