6 important things you should know before starting a startup in Nigeria

Most people venture into startups without having a strong why, how, and with whom. In this article, I highlight six important things you need to know before venturing into a startup.

What is a startup

A startup refers to a business that is just getting started. Startups are created by one or more business owners who desire to provide a good or service they feel there is a market for. These businesses typically have large startup expenses and little income, which is why they seek funding from a number of sources, including venture capitalists.

6 things you should know before starting any startup in Nigeria

You can start where you are and with what you have

A few intending founders of startups forget that there are founders who started with huge capital bases, but today their startups have gone into liquidation because they lack the critical experience to guide their businesses to success.

Some founders are still waiting for big capital bases before they will launch their start-ups. Building a multimillion-dollar company empire doesn’t need having unlimited funds; all you need is the necessary experience, mentality, and expertise. With these, you may start small and grow into a powerful empire.

You must incorporate your business legally

Every founder in Nigeria must be aware of the necessity of incorporating their startup or registering a business name for their startup, and they are all aware of the necessity of registering their businesses with the tax authorities, certain regulatory bodies, and, in some cases, the spatial control unit against money laundering.

Startups should think about what type of legal structure best suits their business. A sole proprietorship is appropriate for a founder who also serves as the company’s principal employee. In addition to being a suitable legal structure for organizations with several owners who share ownership, partnerships are also quite easy to form.

Know your competitors

What is ancient to one person is fresh to another. Of course, a successful business is not intended for just one individual. Knowing this is beneficial. It is wise to be aware of all the different people and startups who are doing what you are doing too. Knowing the competitors’ weaknesses and strengths will be possible as a result.

As a result, you can work to make your company stronger than that of other rivals by exploiting their weaknesses. Anyone who is aware of these factors and takes them into account before starting a business in Nigeria or anywhere else in the world is guaranteed success.

Location matters

Any firm is susceptible to locational factors. And for someone just starting out in a company, it’s frequently one of the most crucial factors to take into account. Startups must choose whether to run their company offline, online, or in an office or home office. The venue is determined by the goods or services being provided.

For instance, a fin-tech company would not require a physical storefront to provide clients with a hands-on presentation of the intricate aspects of the service rendered. On the other hand, a product startup might require a very good and accessible location to display its products to the general public.

Funding is important

Funding is an important part of a startup. Therefore, it should not be neglected, there are various funding options and rounds of investment for startups. They include:

  • The founders, their friends, and family invest in the company at a stage called bootstrapping.
  • The next step is seed capital from so-called “angel investors,” wealthy people who invest in start-up businesses.
  • The following fundraising rounds include Series A, B, C, and D, which are often headed by venture capital firms and invest tens to hundreds of millions of dollars in businesses.
  • Last but not least, a business may choose to go public and accept investment through an initial public offering (IPO), a special purpose acquisition company (SPAC), or a direct listing on a stock market. In a public corporation, anybody may invest, and the startup founders and early investors can sell their stakes to realize a big return on investment.

Embrace Partnership

Personnel systems are necessary. Join forces with others. Talk about your ideas with others who are prepared to provide their time and other resources as necessary. Partnership is one of the secrets of most successful startups. Look for nearby firms that are either established or just starting out and contact them for cooperation. Clearly, describe the benefits that the relationship will provide to both companies. Partnerships are always about mutual gain, so make sure you have every agreement in writing to prevent future issues from developing as a consequence of conflict between you and your partner.