Let me start by asking the question this blog intend to teach. Is doing business in Nigeria favorable? Statistics from internet searches say 65% says no, 30% says yes and 5% is indifferent about the Nigerian business space as their goal is to emigrate overseas. Further drill down into the 30% shows a demographic pattern where 60% fall between the ages of 18 and 40 years old. And their business idea is within the entertainment industry, with the assumption that it can be started with little or no capital. This is worrisome, knowing that a large percent of business minded people in Nigeria are just looking in one direction. They say the reward from it is quick, famous and gives more money than other businesses.
Nigeria is densely populated with over 200 million individuals seeking service. This service cuts across all departments of business and comes with decent profit margins. People tend to follow the bandwagon, build assumptions on what others are doing and start to run. No wonder businesses fail in Nigeria. What sense does it make if in year one, someone opens a shoe making store runs monopoly for eight months and in the nineth month fifteen shoe making stores are opened all servicing the same customers? The population in that area has not change, the need that shoe making services has not changed but the assumption that the first shoe making store was making money tripled the supply of shoe making service in that area in a short period. The implication of this is that shoe making in that area will die and investment will be lost.
Business feasibility study is key before starting one. This study gives you the insight required to measure the population appetite for service, their buying power for product pricing, and your strategy for sustainability. For the shoe making example I gave, rather than doing the same business who says you cannot start a leather supply business. Complimenting existing viable businesses give you a ready-made market, quick stability, and growth. The target should be the need and should be multi-faceted. Young Nigerians are quick to mention entertainment because of the likes of Wizkid, Burna boy and Davido who made it exponentially in that industry. The problem is not partaking in that industry but doing the same thing that will create over supply that shrinks the demand volume in that industry. Sales will be low, investment will be lost, only the extra ordinary few will make it and business shut down will increase.
There is no way it can be explained in the business world that Nigeria is not a business viable country looking at its population, culture, and ability to purchase. However, statistics says otherwise because of the issues mentioned in this blog. The few that understand this concept are the successful ones and they are mostly foreigners. Sad to say but it is true. In conclusion, following the bandwagon without proper feasibility study will result to failure. Understanding consumers’ need is key and should be the driver in business. #EMBA27