Are you planning to start a business and don’t know how to get money to start a business in Nigeria? Well, I did a little research and I came up with about 8 ways you can actually get money to start a business in Nigeria.
I am going to list them below so that we can proceed;
- Angel investors
- Friends and family
- Sell your service
- Make something
- Start from home
- Business loan
- Venture capital
So, let’s get to business. Come with me as I throw some light on these listed items.
Angel investors are non-relations. They have a success story in a particular sector and need a new platform to operate and reciprocate their success in the same particular sector.
So, they leverage their connections and success to make help individuals upcoming to achieve success.
They mostly prefer to keep a low profile and you can mostly find them by contacting existing business owners.
Some of them are in a network making them easily accessible.
Friends and family
When you don’t know how to get money to start a business in Nigeria, your family and friends can be a very profitable option.
All you need to do is to convince them to lend you their money, and most times they might not ask for interest.
But if your business doesn’t pay off and you can’t give them back their money it might affect your relationship.
So, before you go on to ask them for a loan, way your options, and make sure the buts are minimal.
If you really want to start a business a significant amount of money must come from your pocket.
Except you have a rich uncle who can easily give you a large sum of money.
Nobody would want to invest in your business if you the sole proprietor haven’t invested in it. Therefore, you should be ready to break the bank to get that money in your savings. Use the money as your sole capital investment and then you commence operation.
This is a very effective way to get money to start a business in Nigeria.
Sell your service
This is another way you can get money to start a business in Nigeria.
This can be effective to get you a start-up income or other items, you can offer to babysit your neighbor’s child for their old MacBook or even help them do their laundry, or help them wash their car.
If you don’t see any of the previously stated items as an option, you can market yourself if you have a profitable skill you can leverage.
Let’s say you’re a digital marketer; all you have to do is to sell your service and make some cash to start your business.
Either you use your intellectual skill or your physical skill, you need the money.
Put yourself together and decide what you want to do.
If you’re a copywriter take out time to think, do your research and create a product and put it out there.
Get paid and voila, you now have the money to start your business in Nigeria.
Start from home
One thing you don’t have is the luxury of spending money when you’re just starting a business.
so, starting your business from home is a cheaper and easier option, that’ll save you a ton of money. You will probably have to get yourself a good table and chair to get that official feel.
That your business is starting from home and you had garri before going out doesn’t mean that you can’t go out and charge your client millions of naira.
Always remember that some of the biggest companies in the world today were once in the basement or garages. Thus, when you go to meet a prospect ensure to convert them to your client and get that money man!
This is a different type of loan. Unlike the regular traditional loan, this is solely for businesses.
Before you can be considered the bank has to first review your proposal.
This usually consists of a well-drafted formal business plan, your personal investment, projections of income expenses and cashflow, the purpose of the loan, and projected open day balance (for new businesses).
8. Venture capital
You get funds in exchange for ownership share and active role in the company from investors via venture capital firms. This would get you funds from investors; this is not a loan!
This is different from traditional financing and it usually involves some important steps;
- Focuses on high growth startup companies
- Involves high risk in exchange for possible high returns
- Invest capital for equity instead of debt (remember it is not a loan)
- Has a longer investment horizon than traditional financing
A lot of venture capitalists will at least ant a seat on the board of directors. So, you should be ready to give up some portion both of ownership and control of your company for funding.
There is no guaranteed way to get venture capital, but there is a standard order of steps;
- Find an investor
Search for individual investors.
And ensure you do thorough background research to know if the investor is reputable and has experience working with startups.
- Share your business plan in depth
The investor will review your business plan to ensure it meets their standards.
Most times investors focus mainly on the specific industry you’re in, your business location, or stage of your business development.
- Carry out your review diligently
Investors will have to thoroughly inspect the management system, product, market, governing cooperate documents, and financial statements.
- Work out the terms
If they’re interested in investing the next thing to do is to properly work out the terms and conditions.
Once you agree on terms you can get the investment funds…
The moment a venture fund invests, they become actively involved in the company. The investment funds come in rounds as the company meets milestones.
If you follow these processes diligently you are sure to get money to start a business in Nigeria. Which is one of the most challenging stages to set up a business.
Many individuals cannot break pass through this stage thus, a lot of ideas die as a result of lack of funding.
Share this article with family, friends, colleagues, acquaintances, and even your enemy. As it will help them to start up with a good footing, thus making them value you for life!
Also, check out Where to Advertise Your Business for Free in Nigeria