A lot of people have bunch of profitable small scale business ideas yet they can’t even start a least of them. Some others have gotten so much knowledge on many lucrative small businesses but they’re scared that they might fail if they venture into any of these businesses. I don’t know if you’ve found yourself in such situation? Don’t worry; I’ve got your back.
In this article, I will show you how to start a small business from Scratch. I will also address some of the challenges that you might likely encounter when you start a small scale business. I promise you – you’re on a journey to kick starting your dream business.
Many people who find it difficult to start a business have replicated our steps and succeed. If you diligently follow our step, you will launch your own small business from scratch with minimal effort.
Interestingly, whether you are in Nigeria, Ghana, Cameroun, or any part of Africa you will still find this article very useful because each step is practically reproducible in this part of the continent. But, it is important you know that the socioeconomic situation of your country, locality and culture may affect the cost of starting any business.
Before I continue, I suggest you go through our list of successful businesses in Nigeria with less capital startup. I have compiled that list to help you get started.
Also, consider reading there related article:
- Top 10 Factors to Consider when Starting a Small business
- Five Tips for Running a Successful Small Business
Steps To Start a Small Business from Scratch
These steps are like a ladder that will get you up the way to the success of your small business. Follow these steps to start a small business from scratch:
Prepare to take a Risk
The first step towards starting a small business from scratch is to prepare your mind for risk taking. Doing business is risk venture and because you are starting from the scratch there is that tendency that you will always be afraid to start the business. To minimize fear, here are few things you have to do or know:
- Go for a business seminars, workshop and training.
- Accept the reality that businesses are bound to fail if not properly nurtured.
- Promise yourself that you’ll succeed despite all odds, disappointment, competition, and loss.
Get Fast Growing Small Business Idea
The next thing is to get a growing small business idea. This will likely be a little tough. But in general, any fast growing small scale business you choose to start should meet these criteria, something:
- You have knowledge on how to do.
- You will like to do and wouldn’t mind doing at any time.
- That will attract investors.
- You can raise sufficient capital to start since you’re starting the business from scratch.
If you haven’t yet found any fast growing small scale ideas, perhaps you can spot one or more from this my list of small business ideas in Nigeria to start with little or no money. Some may require some level of expertise in a particular industry while others are in the field that you can easily learn.
Having a fast growing business idea alone does not guarantee success in any business, but you have to back it up with some good business fundamentals. What this entails is that you have to spot a proven successful business line and then learn the basics of the business.
Study your Market
Studying your market is the next thing you need to do when starting a small business from scratch. Before you jump into the small business, try first to understand the market for the business, your audience demographics and fundamental metrics of the business.
Understanding the market for this business will in turn increase the chances your success in the business. The simple and correct way of understanding your market is to answer these questions:
- Who are my target customers?
- How would they want to be attending to?
- Who are my major competitors in this business?
- Who are your market leads?
- Is it possible that I will survive in this business?
Answering those questions correctly will put you at the top-notch.
Consider drafting a business plan
A business plan is necessary for your business success. If you must grow fast in your small business you need a business plan. It does matter whether you are starting the business from the scratch or not. Why?
- Investors will like to see your business plan before they can investor.
- Banks will also like to see your business plan before they can loan your money.
- Your friend may want to see business plan before giving you money.
- And so many other reasons.
Even if it is an informal one, write it! One page, two pages, whatever numbers of pages, write it because it will help you to be focus.
Rent a strategic Business Location
Search for a good location to site your business, that’s the next thing to do. Where you site your business will depending on the nature of your small business idea. In Nigeria, we have some big business cities like FCT Abuja, Lagos, Kano, Onitcha, Aba, PH, and Jos.
There is always a challenge wherever you choose to site your business. It does not matter if you locate the business at the near neighborhood. Read: Helpful tips to finding right location for Small Business
Get all your necessary License and Business permits
Every business industry has its regulatory bodies and agencies governing them. Even if you intend locating the business in remote area such as your village, there is local bodies that checkmates the activities of the businesses going on there. So you need to ensure you conform to government operational policies unless you want the government to be at your neck all the time.
Try to factor the cost of the license and business permits in your budget to avoid overhead cost. If fail to do this, you’ll be running your business with high overhead cost. This will be detrimental to the business success.
Registering your business name with corporate affair commission is a way of helping your business to stand out of the crowd. There are so reasons you have to register your business.
- To obtain loan from banks, your business need to be registered.
- To attract investors, you need a registered business.
- For people not to steal your business, you need to have your business registered
- And so on
Even if you do not register the business at the onset, factor cost of the registration in your cost projection as a short term plan.
Registration of business can be done online days at the Nigeria Corporate Affair commission (CAC) online portal. And you can register your business name in Nigeria between N20, 000 – N30, 000
Source for Capital
At least, you needed capital to launch the business while you save for financial backup. Lack of capital poses a great threat to survival of any business. So it is important you have sufficient capital before going a business. The amount of money you need will depend on your business budget. Since you are starting from scratch, you can follow these 10 ways to raise capital for the Small business.
Launch the Small Business
The last of them all, but not the least is to get your business started. You may have the best small business ideas, a good business plan, well analyzed market study, enough capital to start a business but you may not still start the business. Why? I do not know.
Possibly, you’re afraid you’ll fail. But what I do know is that in business, success and failure are two side of a coin. So, it is important you get started because you cannot succeed without starting.
How long will you continue to be afraid? If people like Dangote, Larry Page, HP and so on were afraid of starting their own businesses, they’ll never be where they are today. So, take a bold step and launch your desired small business. There is no need procrastinating.
Procrastination is the thief of time
Starting any business is not chicken feed but by following the steps above without jumping any, I am sure that your chances of success will be high. Therefore, you can start a small business and be successful if you strictly apply those steps above.
Challenges you’ll encounter when starting a Small Business
The following are challenges you will encounter when starting a small business from scratch:
Availability of a viable business location – the success of any business starts from the ability to choose a viable business location. The best areas to locate a business within a geographical region are high traffic and busy area, location close to your market and also close to your competitors. Locations like these may be difficult to get in any locality.
Poor financial backup – if you start a business without keeping money to support the business at its early stage, the business will likely collapse. Early stage of any business is usually difficult to manage without a financial backup. This has result to fall of many businesses in Nigeria.
Poor feasibility study – ensures you carry out adequate feasibility study about the business you want to start before jumping to start the business. Many small businesses that were started this way never exist long.
Improper market segmentation – This is a marketing strategy in which a broad target market are divided into subsets of consumers, businesses, or countries who have, or are perceived to have, common needs, interests, and priorities, and then designing and implementing strategies to target them specifically. In ability to properly subsets and target a niche has downside a lot of small scale business.
If you have question or comment, you can use the comment box below.