Entrepreneurs need to secure funding to cover expenses such as equipment, inventory, and marketing.
What is a Business Funding?
Funding can come from a variety of sources, including loans, grants, investors, and personal savings.
It is an essential component of business success, as it provides the necessary resources to cover expenses such as equipment, inventory, salaries, and marketing.
Business funding can also help entrepreneurs to pursue new opportunities, expand their businesses, and achieve long-term growth objectives.
Why Should I access Funding For My Business In Nigeria?
Starting a business in Nigeria can be a challenging but rewarding venture. However, one of the biggest challenges entrepreneurs face is securing adequate funding to start, grow or sustain their businesses.
Some entrepreneurs may be hesitant to seek funding due to concerns about debt, losing control of their businesses, or the difficulty of securing funding.
However, there are several compelling reasons why entrepreneurs should consider seeking funding for their businesses in Nigeria.
1. Access to Resources.
One of the most significant advantages of securing funding for your business is access to resources.
With funding, entrepreneurs can purchase equipment, and inventory, and hire employees, which can help to increase productivity and efficiency.
Additionally, funding can be used for marketing and advertising, which can help to increase brand awareness and attract new customers.
2. Opportunity for Growth.
Funding can also provide entrepreneurs with the opportunity to pursue growth opportunities. For example, it can help to finance product development or expansion into new markets.
This can help to increase revenue and market share, as well as improve the long-term viability of the business.
3. Increased Credibility.
Securing funding can also increase the credibility of the business. Investors, lenders, and customers may view businesses that have secured funding as more stable and likely to succeed.
Additionally, the act of securing funding can demonstrate that the entrepreneur is committed to the success of the business and has a well-developed plan for growth.
4. Mitigate Risk.
While securing funding may come with some level of risk, it can also help to mitigate risk. For example, by having access to funding, businesses can weather economic downturns or unexpected expenses.
Additionally, securing funding can help to avoid the need for high-interest loans or credit cards, which can create additional financial burdens.
5. Access to Expertise.
In addition to financial resources, funding can also provide access to expertise. For example, investors or lenders may have industry-specific knowledge or connections that can be valuable to the business.
How do I Access Funding For My Business In Nigeria?
There are various sources of funding available for businesses in Nigeria, including banks, government agencies, venture capitalists, angel investors, and crowdfunding.
In this article, we will discuss some of the key steps entrepreneurs can take to access funding for their businesses in Nigeria.
1. Develop a Business Plan.
Before seeking funding, entrepreneurs need to have a well-developed business plan. A business plan should include a detailed overview of the business, including its products or services, target market, competition, financial projections, and growth strategy.
To become successful as a business owner in Nigeria, you need to come up with a business idea. Remarkable new product ideas are everywhere and there is a limitless supply of concepts waiting to be commercialized, launched and marketed.
Ideas can be small and simple, or large and complex. A passion for a subject may be the genesis of a compelling idea; derived from time enjoying a cherished hobby.
I wrote a comprehensive article on this blog on business ideas that can be started by anyone. Check out the link to the article to learn more.
2. Identify Funding Sources.
Once the business plan is developed, entrepreneurs need to identify potential sources of funding. This includes researching and identifying banks, government agencies, venture capitalists, angel investors, and crowdfunding platforms.
Entrepreneurs should research the requirements for each funding source, including the type of businesses they support and the application process.
3. Get Incorporated.
The body was set up by the Companies and Allied Matters Act (CAMA). Company registration in Nigeria can now be completed online using the new e-registration portal launched by the Corporate Affairs Commission (CAC).
1. Only one person can register a company and act as both director and shareholder where no foreigner will be involved in the company’s composition.
2. Where foreigners will be involved, a minimum of two directors will be required. And where the shareholders are individual foreigners, a minimum of two persons are required to act as shareholders for the company.
3. A foreign company can register a Nigerian subsidiary and be the sole shareholder provided that such a company will appoint a minimum of two directors.
4. A private company with only local director(s) is not mandatorily required to appoint a secretary at a point of incorporation, however, a company owned by foreigners or involving foreign participation must appoint a secretary at the point of incorporation.
5. Every company must have an address in Nigeria at the point of registration (registered office address).
6. Director of a Nigerian company must be above 18 years.
7. Nigerian citizens can register a company with any authorized share capital amount; however, a foreign-owned company must have a minimum of Ten Million Naira in authorized share capital to be incorporated.
4. Create a website.
If you want to show the world that your business has evolved beyond the idea stage, then it is time to invest in a professional website.
We now live in a world with more than 90% internet penetration. According to a study, 75% of online users accepted to judge a company’s credibility based on its website’s design.
In the end, people are likely to engage with a company they can trust, and the website is the stepping stone toward building that relationship.
I wrote a comprehensive guide on how you can develop a comprehensive website for your business. Check out the link to the article to learn more.
- How To Choose a Domain Name For Your Website or Blog
- What Is a Website Builder and how Does it benefit Your Business?
5. Get a Google My Business listing.
Google My Business is like a virtual phonebook and address. Not only does Google My Business make your business easier to find on Google, but online directories such as Google My Business help you to reach potential customers that would otherwise not know how to find you.
Your business information like your phone number, website, address, review ratings, hours, and more will all be available on one easy screen for a potential customer who seeks your business using Google.
Google my business is the doorway of your business to the world. I wrote a comprehensive guide on how to get your business listed on Google my business. Check out the link to the article below to learn more.
6. Raise Startup Funds.
One of the biggest challenges entrepreneurs face is raising money for business ideas or growth. Unless you’re independently wealthy or have a hidden source of capital you’re going to need a helping hand.
Now the underlying issue is where exactly to start raising these funds. To help solve this, I wrote a comprehensive guide on how you can raise startup funds for your business without hassle. Check out the link to the article below to learn more.
7. Prepare a Funding Application.
Entrepreneurs should prepare a funding application that includes a cover letter, business plan, and financial projections.
The application should be tailored to the specific requirements of the funding source and highlight why the business is a good fit for the funding.
Entrepreneurs should also be prepared to answer questions from potential investors or lenders about the business and its financial projections.
8. Network and Build Relationships.
Networking and building relationships with potential investors or lenders can also increase the chances of securing funding.
Building relationships with potential investors or lenders can help to establish trust and increase the likelihood of securing funding.
9. Be Open to Different Types of Funding.
Entrepreneurs should also be open to different types of funding, including debt financing, equity financing, and crowdfunding. Debt financing involves borrowing money that must be repaid with interest.
Equity financing involves selling a portion of the business to investors in exchange for funding. Crowdfunding involves raising small amounts of money from a large number of people through online platforms.
By providing access to resources, opportunities for growth, increased credibility, risk mitigation, and access to expertise, funding can help to improve the success of the business over the long term.
Therefore, entrepreneurs should carefully consider their funding options and be open to seeking funding to achieve their business goals.
By developing a well-developed business plan, identifying potential funding sources, preparing a funding application, networking and building relationships, and being open to different types of funding, entrepreneurs can increase their chances of securing funding for their businesses.