Nigeria is widely famed for her entrepreneurism and the growing number of Small and Medium Enterprises (SMEs) in Nigeria attests to this. The growth of the SME sector is a welcome development for obvious reasons; it fosters wealth and job creation. While the Nigerian SME sector currently records amazing success stories, it has the potential to immensely increase its impact through the acquisition of business knowledge. With entrepreneurship becoming the norm and as the Nigerian SME space witnesses an influx of young entrepreneurs, there is a need for aspiring entrepreneurs to understand the rudiments involved in starting a business.
Starting a business begins with an idea. The idea could be a solution to a gap noticed in the society or a gap in a specific market. It could also simply be the transformation of one’s passion into a business.
In the course of interacting with would-be entrepreneurs during SME trainings, FATE has experienced many coming in for training sessions without a clue as to what business to venture in. With these aspiring entrepreneurs, one question that readily comes up is “how do I come up with a business idea”? Every entrepreneur goes through this mental decision phase. For some, it is straight forward but for others it’s herculean. So how do you come up with business ideas?
Start with you. Do something about what bugs you. For instance, while in the university, Ebrahim Durosimi, a FATE IVD Fellow thought that good textbooks were scarce and also really expensive when available. He and his peers struggled to access affordable study materials while in school. Four years after graduation, he founded uJuzibooks.com which provides textbooks, course materials, lecture notes, journals and other study materials at reduced costs saving students up to 70% of the actual costs.
Look for gaps. Most times the big players leave out countless opportunities while focusing on servicing big clients. For instance major restaurants in Lagos Nigeria focus on servicing the large number of clients that troop into their restaurants daily to have meals. However, Titus and Tobias Igwe, Founders of SpeedMeals Mobile Kitchen and members of FATE Alumni, noticed a couple of gaps; workers couldn’t afford the expensive meals, the restaurants were far which meant missing out on work and deadlines for lunch, late arrival of meals when someone was sent for food, local food sellers cooked in unsanitary conditions etc. SpeedMeals Mobile Kitchen offers freshly prepared meals and delivers anywhere in Lagos at affordable rates. Today they are expanding their business to feed 10,000 people daily in Lagos.
Apply your skills in new fields. Think about your skills and how they can be used in new areas. For instance, Julie Sygiel, founder of Dear Kate, used her training in chemical engineering to create resistant, leak-proof underwear material that active women can use without worrying about menstrual leakage during a workout.
Identify and focus on your key skills and competency areas. Another approach is to write out things you are really good at on one side of a piece of paper and things you’re not so good at on the other side. Do the same for your work life. Then ask yourself why you want to start a business in the first place and write it down. From the information you have written, find out if there’s a need for a business doing one of the things you are good at.
Do your due diligence. Arriving at an idea and imagining the possibilities is an exciting phase. Many would-be entrepreneurs in this phase are usually very excited about their ideas sometimes to the point of losing objectivity. However, between the idea stage and actually starting a business is a very important process that could determine the success or failure of your business idea. This process involves researching and analysing your idea to test its viability.
Back up your information with actual data on your target market. Research and analysis would help you discover the holes in your idea that need patching. With research, you would have a general sense of the kind of customers your intended product or service would appeal to, your competition, collaborators you could partner with and the personality of your company including how your product or service would be perceived by your customers.
Research helps you answer questions like – Is the market saturated e.g. does your neighbourhood really need another pure-water dispenser? Does the market want what you’re offering e.g. if you are thinking of providing day care services for dogs, would anyone care? What’s the competition doing i.e. what do they do well and poorly? Can you offer something different and better?
The answers in your research and analysis would boost your confidence in your idea or send you back to the drawing board for some fine-tuning and would prepare you for the next stages involved in “Starting a Business”.
Now that you have your idea, it is time to dig in deeper. You need information that will help you develop a unique selling proposition. You need market research and analysis. We would discuss this in the next write-up, watch this space.