Becoming a successful entrepreneur in Nigeria is a tough one, and generating startup capital as an entrepreneur in Nigeria is the first step. The toughness, however, is relative. You know, it varies with different locations around the world. By now, you probably know who an entrepreneur is and the challenges you would face in the long journey to stardom. You most likely also know the extra amount of work you need to put in as an entrepreneur in Nigeria.
Perhaps you have been wondering, How exactly would I fund this business? Where do I get the startup capital to execute this project? Who would even think of investing in my business? Can I become also make my way to the midst of the most successful entrepreneurs in Nigeria?
Worry no more! Below are some very easy ways of generating startup capital as a budding business owner in Nigeria.
#1 Think Business, Think Family
This is arguably the easiest way to get capital for your startup business as an entrepreneur in Nigeria. Did you know that the richest man in Africa started off with his family’s help? Yeah! You read it right. Aliko Dangote, the reputable entrepreneur – with one of the largest private businesses in Nigeria -started his business with a 3000 dollars loan he got from his uncle. As an entrepreneur, you need all the leverage you can get. Family members would be much more willing to aid you with no interests and conditions attached.
#2 Any Good Friends? You Can Use Their Help
This is the delicate period of your dreams, and you could use the help of your trusted friends and acquaintances to generate capital. Of course, you must have gone to the required lengths to ensure your business is scalable. You could present your profitable business idea to your friends, and they are more likely to believe in your ability to accomplish your proposed metrics.
Your trusted friends are most likely to loan you the startup capital. Give you advice, provide mental and emotional support for you like your family members. Aside from these, you could also make good business partners among your friends.
#3 Do You Believe In Angels?
Trust me, Angels are real, and they offer help just in the nick of time. Alright, the angels in this context are not supernatural cherubims with wings like maleficent. No! Neither are they always clothed in white apparel like in the movies? The angels in this context are Angel investors. I know, right!
Who are angel investors?
In simple terms, Angel investors are individuals or private organizations with high net worth that can help you with your startup capital. They may be seed investors, informal investors or just an individual. These angels are often willing to inject capital into a business to give it a head start. They usually invest in exchange for ownership equity in the business, and these investments are usually one-off.
Unlike venture capitalists, money lenders, and commercial banks, they are usually very lenient in situations where they are lending. Don’t worry, they invest irrespective of your religious beliefs and personal ideology and yes, there is a list of them in Nigeria.
#4 Cooperative Societies
You must have heard about or even joined a cooperative society. A cooperative society is one of the easiest means of getting a substantial amount of capital for starting up.
In a cooperative society, you will have access to a good amount of money after contributing for a while. Cooperative societies not only offer you a method of saving; they can also offer loans less predatory than venture capitalists or commercial banks. This is most relevant if you intend to leave your current job to start up your own business.
Crowdfunding is as easy ( also not as easy) as the name sounds.
How does crowdfunding work?
Crowdfunding is the use of a small amount of capital gathered from different individuals or agencies to finance a business. Crowdfunding has different types, each varying with the purpose of the convener.
Some Angel Investors hunt for scalable and profit-driven businesses on crowdfunding platforms. In this dispensation, crowdfunding is done on the internet; that way, you can reach a wider audience and even do that on a global scale.
There are a good number of crowdfunding platforms available. Examples of these include Gofundme, IndieGoGo, Kickstarter, fundable, etc. You too can try them out.
#6 Grants And Loans Are Everywhere
How grants work:
Grants are monetary gifts from the government (most times) or from private organizations to projects ranging from businesses to charity. Awarding grants usually is done with the specificity of purpose. This means that there are different grants for different things. In simple terms, grants are capital gifted to businesses for specific projects.
While you may get substantial capital for business development, grants usually may not cover all startup expenses. There are quite several good grants in Nigeria for entrepreneurs. Grants may be very difficult to win because of the huge number of people applying for them. However, this is where the test of your preparedness comes in. Good business model canvases and a powerful pitch are big advantages when applying for grants. It is suited for projects that are already underway.
How loans work:
Loans on the other hand, unlike grants, are not so friendly, yeah? Yes. Loans are capital given to businesses on an agreement of repayment and even interest. This means that, when you obtain loans from any organization, you are expected to pay them back within a specific amount of time, with an extra amount of money (known as interest).
While loans may be a very good means of gaining startup funds as an entrepreneur in Nigeria, an entrepreneur must apply caution, when applying for them. Loans can be obtained from commercial banks, microfinance banks, government, and private organizations. However, there are quite several loans that are friendly to entrepreneurs in Nigeria.
The requirements to apply for loans vary with organizations. However, one thing that you are sure to need is collateral. As an entrepreneur, loans can be a huge boost, especially when you where to request them from.
#7 The Bank Of Industry
The last but not the least means of easily generating startup capital as an entrepreneur in Nigeria is the Bank of Industry. What’s that? The Bank of Industry is a government established bank with aim of providing financial assistance for business.
You are probably worried that you have not started yet. The scale of their operation covers new enterprises, small and medium scale enterprises and established businesses.
Before you apply to the bank of Industry, you must make sure to
- Be creditworthy: Your business must be promising and be worth investing in
- Be clean: You must have no record of defaulting in erstwhile loan applications.
If you are sure about these things what then are you waiting for.
Entrepreneurship is a lot easier when you know your onions, meaning, knowing the right things to do and the right places to go. Dedication, good strategy and hard work are very important things you need to possess. You too, can become successful.
- Akinmoyeje Timileyin Precious is a student at the University of Ibadan. He is a student Journalist, copywriter, creative writer and a boy child advocate. He is a fellow at the African Leadership Institute. He is an entrepreneurship enthusiast. He is also interested in history, culture, science and philosophy.