Doing business in Nigeria
is not an easy one. When it comes to starting a business in Nigeria;
whether small scale, medium or large scale enterprise one of the hardest
parts is raising of money to finance the business. This is a threat and
a great challenge to many entrepreneurs and has often resulted to the
fall of supposed multimillionaire business which many who had such
business idea have dreamed and thought that it will come to pass. Can
one now say that there no ways of raising funds for a business in
Nigeria? The answer is NO.
There
are so many great ways of raising capital for business in Nigeria.
Below are top 13 valuable means of raising fund for a business in
Nigeria; you can tap into any of these means of raising funds to get
your business started.
Before I proceed further to show you ways to raise money for you
business in Nigeria, let’s look at why people find it difficult to raise
funds for their business.
Some key points that you must get right if you are serious about raising money for your business are:
- Your business Idea – can your business idea(s) sell? You business
idea(s) must be such that it can attract investors. So, get a good
business idea.
- Vision and mission of your business; what is business vision and
objectives? Your dream business must have a concrete core values and
goals.
- Your Business Plan and Design; Do you have a good written business
plan? Is it a winning type? Business plan is a vital element of every
successful business. It serves a blueprint which you must refer to at
all time.
- Integrity and Reputation; you have earned yourself reputation and
integrity? If you don’t have reputation and integrity; I bet you, your
family members will not even listen to you when you present your business
plan to them talk more of your friends.
You’ve gotten the above point right? Here are my top and best 13 ways
to raise funds for business in Nigeria, tap into one, two or more to
finance your business.
13 Ways To Raise Funds/Capital For A Business in Nigeria.
1. Personal Saving –
This is the best source of capital for a new business. Personal
saving is one of the easiest ways of raising funds for business
especially for small and medium scale business enterprise. When you have
a business idea and there is no capital for startup, cutting down you
expenses to save for the business is a good strategy of raising at least
the initial capital. Most people wait to start saving when they have
some extra money lying around-a comfortable surplus. But it doesn’t work
like that. You start to save for your business at least 2 years of time
you propose that the business will start up. But, it is not necessary
that you have to wait till 2 year before you begin the business. Timing
and the amount of money you were able to save within a given month
matters a lot. You can apply 50/50 law in your personal saving. Here,
you never spend more than you save. You put 50% of every income you earn
into savings. If you increase your saving by N40000, you know that
you’ve earn the right to raise your lifestyle by that same amount
(N40000). By so doing, you will be able to raise capital for your
business within the shortest possible time.
2. Relatives And Families –
You relatives and family members are second best source of capital
for new business. Apart from your personal saving, another way of
raising a substantial fund for your business is through family and
relatives whom you have earn their trust. It may difficult for you to
get money from your family and relative if they don’t believe in you. Of
course, you have to trust yourself first, if you want people to trust
you. You must have to earn high reputation from family and relatives;
and you have to present your business idea as one that is achievable for
you get money from them.
3. Friends And Well-wishers –
Outside your family members, the nearest persons that can help you
raise startup capital for your business are your friends and
well-wishers. Again, they need to trust and believe in your ability
before you get money out from them. Present your business idea and a
well design business plan no matter how small the business will be; they
will likely be willing to support you financially. Begin from your
closest friends; you can promise to give them something in return as the
business turns up.
4. Grants From A Philanthropic Organization –
Another source of fund for starting up business are grants. Grants
are non-repayable money or products disbursed by grant makers, often a
government department, organization or trust, to a recipient, often (but
not always) a nonprofit entity, educational institution, business or an
individual. For you to receive a grant some form of “Grant Writing”
often referred to as either a proposal or an application may be
required. The type of grants that I’m suggesting that look for are
grants from non- profit organization or philanthropic organization. You
can easily outsource for such type of funds to get your business started
but remember, most organization that gives out grants look for fresh
thinking and innovative people and organizations. They also set
benchmarks to measure your success and monitor business progress.
5. Business Angel And Angel Investors –
Angel Investor is a wealthy individual who provides capital for a
business start-up, usually in exchange for convertible debt or ownership
shares. Business Angel can be anybody who is willing to invest on your
business. All you need is to prepare a good business plan and present it
him or her. He should be able to see why he should invest in your
business There are such people in your locality, it can be your Uncle in
Abuja, director or even your brother; look for them to help you raise
fund for your business in exchange for ownership equity.
6. Co-operatives –
By joining cooperative and saving small amount every day can help you
raise money for your business. Once you join any co-operative society,
you are eligible to borrow money from your cooperative and you are
eligible to receive funds on you turn. Once, you receive your own turn
of funds which can substantial enough to startup business, use it to
start up the business. however, you must plan a way to pay at the due
time.
7. Partnership –
partnership works very well when you meet someone that has similar
business idea and core values with you. Two of you will pool funds
together to start up the business together. Partnership is not necessary
two people business. In partnership, Profits are shared according to
individual contribution or shares of the business. So, there is equity
and justice. Most multi-national and multi-international companies start
from partnership. Partnership business has many great advantages over
sole proprietorship business.
Getting interested individual, organizations or companies sponsor
your business project; may be in exchange to promote the organization or
individual is another means of getting you business started. No
organization, company or individual that will agree to sponsor project
without seeing how she will benefit from the project. So, before you
begin approaching any organization or individual for sponsorship you
must have made sure that you have included the interest of the
organization or individual sponsor.
9. Bank Of Industry -
Bank of industry provide Small, medium and large enterprises,
excluding cottage industries with funds for starting their business; new
or existing companies, seeking expansion, modernization or
diversification; credit worthy promoters who will be required to prove
their commitment to the project by contributing at least 25% of the
project cost excluding land, borrowers whose management capability,
financial situation (including availability of collateral and
guarantee), character and reputation are incontrovertible; clients with
demonstrable ability to meet loan repayments, borrowers with no record
of unpaid loans to erstwhile development finance institutions and other
banks. You can obtain access to Bank of Industry facilities in 3 easy
steps;
Step 1: Write a formal application letter
Step 2: Completion of BOI’s Questionnaire
Step 3: Submission of Forms and Questionnaire. So, if you think you’ve
meet up with the bank of Industry requirement you can comfortable visit
boinigeria.com to download the appraisal form and complete their
questionnaire for your business funds.
10. Banks Loan -
I have decided to add banks loan because I still
believe that bank loan serve as a means of raising fund for business
start up. The only problem with Nigeria banks is they demand a lot
(collateral and security) and they often turn down the request of small
scale and medium scale business enterprise.
11. Published Press Articles -
Actually, it is not the press article that you’ve published that will
give fund for your business but rather the attention of the investors
that you’ve attracted through your press article. Many large scale
business entrepreneurs have secure their seed fund via this means.
12. Online Source -
There are so many jobs and task you can do online to make money
, they
don’t necessary requires you having money before you can do. As you
carried out these online jobs, keep part of the money to start up a
business offline.
13. Government SME Support -
Actually, this is not a good means to raise fund for a business yet
it is still very important I mention it. This is because many small and
medium scale enterprise has started greatly via means
To sum it up,
I strongly believe that with the above 13 ways, you can actually
raise funds for your business in Nigeria. Remember the key points that
you must get right before outsourcing for funds for your business. Get
those points right and you will be surprise that you will raise enough
money than you actually need to start up the business.
It is time to tell us how much you need for your business
start up. Use the comments box, only real names will be publish but
don’t add your contact details for security reasons. It is not accepted. Comment the type of business you plan to start up and how much you need. Comment using your email address.
Kindly Share! Thanks.
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