Nigerians are very hardworking in nature, and that is why an average Nigerian always have an entrepreneur mindset; but one of the major factors that usually discourage many is how to raise money for business in Nigeria.
Though it may always appear scary trying to figure out where capital for a business idea would come from, but it would really be wrong to allow that to kill your vision. Raising money for business in Nigeria may not really be so hard as it always appear; sometimes it may even be more difficult to nurse a business idea than raising capital for it.
This means that if you are really able to develop a good business idea, you may actually be able to raise capital for it as long as you are serious about it. It is always said that if you can dream it, you can have it!
So the impression I want to create here is that you should not allow lack of capital to kill your business idea, you actually have all it takes to raise your capital as long as you are serious.
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Why You Need Business In Nigeria
Many people today don’t want to stress themselves in running any business, just because they have a job which pays them a token at the end of the month.
They feel relaxed and comfortable always waiting for the little cash they get as salary at the end of every month.
Some that even wish to have a business, are having the interest possibly because their friends have some businesses, and they want to be like their friends, without knowing the actual needs for having a business.
There are actually some great reasons you should own a business, than just doing it because your friends have a business
So, if you are still doubting and not convinced on why you should have a business, then checkout below:
Self-reliance speaks about the ability to depend on yourself for things instead of relying on others.
That is, the ability to take care of your need Independently without having to depend on loans or to exclusively wait for your salary, before attending to your urgent needs.
Knowing the economic situation of the Country, you may actually know that sometimes the salary of a civil servant may not even be guaranteed.
I have heard several times where some States in Nigeria owed their workers more than 6 months salary.
So in this condition, what would a civil servant do without a business?
The population of the country is really increasing geometrically on daily basis, yet there seems to be no enough employment opportunities to absorb the population.
This is why it seems no job is secure in the country today; you may not actually assure yourself how long you would stay in that particular job you do today.
I have heard severally where some States dismissed or retired some of their workers possibly due to lack of money to pay their salaries.
This kind of situation is always a frustrating one; but if you have your business, you may not adversely be affected.
Financial freedom can be said to be the ability to have enough savings, financial investments, and cash on hand to afford the kind of lifestyle one desires to live.
One thing about salary job is that it is very hard to give one financial freedom; higher percentage of salary dependants live on debt before the month runs down.
But if you have your business, you would not always be waiting for your salary before you have your needs solved.
To Help Others
One of my philosophers said that success doesn’t not entail having a lot of money, rather it lies on the number of persons one has been able to help. The number of lives you have been able to touch positively, is what can be regarded as your success.
That is, success is more of adding value to other people’s lives. For you to live a fulfilled life in Earth, you have to help others, you have to put smile on other people’s face.
But would you really be able to help others if you depend wholly on your salary for survival?
So even if your salary is enough to take care of your needs, you really need to understand that life is not meant to be selfish, you have to think about other people’s need as well.
This is why you really need business to help buoy you up for the sake of others that may need your help.
To Live To Be known
According to the data provided by WordoMeter, The population of the world as of the year 2019, was about 7.674 billion.
This is to show you that the world is really very large and populated more than you can even imagine.
It would really be deplorable if you come to this large world and leave without being noticed.
One of my friends would always say that if you don’t have money these days, it seems you are are not existing.
Have you ever asked yourself; can my salary really make me live up to existence in the world today?
You really need business, you need to live up to standard of existence.
5 Things To Consider Before Looking For Capital To Start Up Your Business
Most people have had their business ideas blown to the air even after all the efforts they made towards raising capital for the business. This usually happen because people fail to understand some facts before seeking for business capital.
So, for you not to nurse a business idea that would die off after a space of time, then you have to consider the following:
Is your business idea realistic?
For you to have a better chance of getting funding for your business idea, there is need to have a realistic or achievable business idea.
Investors are always sensitive to this part, and can easily figure out if a business idea is realistic or not.
Is there any problem that your business idea can solve?
For your business idea to be ideal for easy funding, there must be critical and relevant issues or problems it looks to address.
Is there really market for your business idea?
Market is a total number of population that would patronize your business idea.
If there is no population that is looking forward to your business idea, then such business idea would really be had to get help.
Have I been able to test the idea?
Testing a business idea is a process and strategy used to determine if the business idea is really a viable business model.
Then how do you test your business idea?
Study Already Existing Business
One of the easiest ways to test a business idea is by looking out at those that have tried the business or those that are already doing the business. Did the business really work for them? Is the business really working out for them? By doing so, you gain good insight on what is obtainable in the business.
Assess the market
Another good approach for testing your business idea is by weighing the nature of market for your business idea. You really need to ask questions, engage your potential customers to know if they really have a problem that your business idea can solve.
How To Raise Capital For Your Business
Have you been so bothered with the question on how to raise money for business in Nigeria, I think this section would really be of great help.
There may be many ways to raise Capital for your business idea, but let’s just discuss the more friendly ones:
The safest way to raise capital for your business idea is through your personal savings.
When you have more of your personal savings in your new business, it always gives you more peace of mind and makes you feel more safe in the business.
That little thing you do currently that is bringing little income on your table, there is need you device nice strategy to start saving enough for your business idea.
Family and Friends
Another safer way of raising capital for business is by hooking up to your family members and your friends, for financial support.
The easiest way to secure fund through this means is by having some money already at hand.
For example, let’s say you are to look up to raise the sum of N1 million from family and friends for your business idea, you would really have to tell them that you already have like N500,000 at hand.
In this way, they will surely know that you are serious about your business idea, and would not squander their money if they give you any.
Most times, money raised from this means is usually free and non – repayable. That is, most times, family and friends may support one for business without asking for repayment of the money.
But these days due to the economic nature of the country, it may really be hard to get free financial support from family and friends; as they may now need repayment once the business starts functioning.
But either ways, it still remains one of the easiest and safest ways for raising capital for business in Nigeria.
Angel Investors are financially capable individuals who are always ready to provide capital for business star-tups. They always do do this either to have a share in the business or to have a convertible debt.
What is Convertible Debt?
Convertible debt can either be referred to as convertible bond, convertible note or convertible debenture.
It is a type of debt agreement where an an investor has the right or an obligation to exchange the bond for a predetermined number of shares in the issuing business at a certain time of the business lifetime.
Convertible debt usually have a maturity period of greater than 10 years. Once convertible debt matures within the specified period of time, the investor might decide whether to convert it to share in the business or to get paid back usually with interest.
Mostly, the important thing you need to secure loans from angel investor is a good Business Plan.
A business plan is a well written plan that elaborate what your business or business idea is all about, and how it would really be of help to the society.
To stand a better chance of securing loans from angel investor, you need to be able to convince them with your business plan.
So, if you want to know how to write a killing business Plan that would compel investors to invest in your business, then you can keep in touch with this website as I’ll be stopping that in my subsequent post.👍
Grants are non-repayable funds given out by the Government or other institutions to individuals, mostly for business star-tup or expansion.
Grants have really helped many people achieve their dream business; it has really changed many people’s lives. This is why you should not always conclude that grants are not real, you really have to give it a try.
Lookout for Government agencies or private organisations that give grants, and apply since application is usually free, you never can tell how lucky you would be.
Examples of Organizations That Give Grants To Individuals For Business
There may actually be many government and private organizations that give grants to individuals for business, but let’s just list these few here:👇
- Shell LiveWIRE
- Tony Elumelu Entrepreneurship Programme (TEEP)
- Ford Foundation
- Diamond Bank BET Programme
- YouWIN Connect Nigeria
- Bank Of Industry (BOI)
- GroFin Fund
- AYEEN Financial Grant
You may Checkout HERE to read how to apply for grants in some of the institutions listed above.
In most of these Grants, a Business Plan is always required; and this is why you need to know how to write a killing business Plan to convince people about the value of your business.
A loan can be said to the sum given to an individual usually for business star-tup, expansion or for other purposes.
Loans usually come from Government or private organisations, and it’s always expected that the individual pays back with an agreed interest rate and at a particular period time.
Taking loans to start a new business is sometimes a risky decision, as you may not know what may happen to your business in future time.
This is why it is not always advisable to see loans as the only means of capital for starting up a business, it would be more safe to take a loan for business expansion than to take a loan for business star-tup.
This is because you have more control and know more about the nature of income of an existing business than a business you just want to start up.
I’m not actually trying to say you should not take a loan to start a new business, as this may have actually favoured so many people out there.
But there is always a high risk associated with taking loans to start a new business than taking loans to expand an existing business.
What Are The Types Of Laons You Need To Know?
There would be need to know the different types of loans and how they operate, inorder to be guided while thinking of getting a loan:
- Conventional Loans
Secured Loans are loans that are usually backed by collateral. In this, a borrower must be required to present some forms of collateral to the lending institution before been able to get the loan.
The collateral may be in the form of personal properties of the borrower; like land, house, relevant documents or certificates, and so on.
These collateral normally stay in the custody of the lending institution until the specified period of time, when the borrower must have paid up the loan.
In most cases, some institutions especially banking institution may wish to seize and convert the collateral to their property if the borrower fails to pay up the loan in an agreed period of time.
Some of the major advantages of a secure loan is that it usually comes with a low interest rate, and has a longer Loan Tenure (repayment period).
There may be many institutions that provide Secured Loans, but Banking institution are well known for this kind of Loan. Though sometimes it is not always easy to get loans in Nigerian banks.
So, if you really wish to know the sure ways to secure loans in the bank, keep in touch with this website as I’ll be revealing that in my subsequent post.
This type of Loan doesn’t always require collateral from the borrower. In order words, the borrower may not need to present any property to the lending institution before being able to get the Loan.
This may actually appear easier than the secured Loan, but here, the financial capacity of the borrower would be assessed, and that would determine if he would get the loan and the actual amount he would be able to get.
In this type of Loan, the borrower usually have the chance to borrow as many times as they want even while still having outstanding loans that have not been repaid.
This is a kind of opposite of Open-end Loan. Here the borrower is not allowed to borrow again until they repay their previous or outstanding Loans.
These are loans that are not insured/backed or protected by the Government. It could be Loans obtained from other forms of private institutions.
Raising money for your business in Nigeria may not really be so scary as it usually appear, sometimes what is even more difficult is how to come up with a good business idea.
As long as you are able to generate a saleable business idea, believe me, you may not really find it so difficult to raise money for the business, as long as you follow the guides on this post.