Entrepreneurship comes naturally to Nigerians, the average Nigerian millennial has two or more business ideas that he or she believes would catapult him into instant millions overnight. I believe this stems from a lack of structure in the Nigerian economy; zero infrastructure equals zero industries which ultimately results in a dire lack of sustainable employment opportunities across the nation. This makes the average Nigerian forced to constantly think outside the box in order to earn a living, this “compulsory creativity” also drives the youth to resort to illegal ventures as a shortcut to making it to the big leagues, but let’s stay on course.
Now, you have a product or a service that you believe can be successful in the Nigerian market or you have aspirations of your business being a global brand. It is great you have a vision, you need to have the perseverance and focus to back it up as well. Several ideas are put on hold because of the period of time it would take to achieve them, in that period you’re stalling, another person may have identified this market need and built the business of your dreams. If you validate your idea, the process becomes easier then on.
Here are some fundamental tips to consider for your big idea.
Research
There is very little research data on business in Africa, that entrepreneurs need to make informed decisions before starting a new business. Asoko Insight is working on resolving this lack of data, but nonetheless, it is vital that there is a market need for your service offering. One needs to have facts and figures on the market where your business would operate, to be able to ascertain how profitable the business would be.
Research can be as simple as googling your idea to find out if it has been done before. If the idea already exists, don’t give up, you may find a better way to improve on the product. Can you add more value to the business idea? Can your customers be more satisfied? If yes, then proceed.
Perceived Value
Your business idea must solve a problem and your customers must feel like it adds more value than they paid for. Ask a few trusted friends for their honest feedback on your idea, take notes and compare with the research you’ve done.
Your business has to offer enough value for a customer to pay for it and create revenue for you. If you are the only one who thinks your business idea can work, then you need to re-assess.
Build an MVP
If your business idea has enough support, then it’s time to build a Minimum Viable Product (MVP), to determine if it is a product customers would actually pay for. Start now by building the simplest, quickest version of your business, it may be a simple website. It doesn’t need to have all of the features you envision, an MVP is just a working prototype to test your idea.
If it is an idea that requires specific skills, such as software development or fashion designing, and you do not have the skills, don’t focus on learning before you test your idea. Find someone with the skills you are lacking and negotiate an agreement to pay what you can afford at the moment, pending when the business starts making profit. Once you have the MVP, use it, test it and have others do the same. If it turns out to be a product you and your friends would never use, scrap the idea.
Branding
If the testing process goes great, congrats, you have a winning idea. Now you need to build the brand identity of your business, are you a mass market brand or a premium brand, this would be interpreted from your branding. The voice of your brand has to appeal to the Nigerian audience and reach this audience through the right media.
Understanding how the Nigerian market works and knowing the demographics of customers that would find value in your product is the key to crafting your branding the right way.
Product-Market Fit
This is the single biggest reason why businesses fail. Most entrepreneurs believe with a minimum viable product, they can launch and start getting customers. However, if your intention is to build a sustainable business that lasts, the market your business is targeting needs to have the following:
- Large number of potential customers
- High growth of potential customers
- Ease of customer acquisition
In the Nigerian market, you need solid evidence that there is a market for your business, there is no point of creating a product that no one would buy. Your business has to generate enough revenue to stay afloat, if the market is small, then you do not have a company. An Igbo businessman once said to me, if your business makes money in the first six months of existence in Nigeria, then it is a good business. How true that statement is, I leave it to you.
Customer Acquisition Plan
Before you start marketing your business, you need to structure a proper plan to acquire customers. It goes beyond marketing, you have to ask yourself:
- How do I acquire and retain my 1st customer?
- How do I acquire and retain my 1000th customer?
You may write the most detailed business plan ever, without a proper customer acquisition plan and marketing strategy. A customer acquisition plan goes beyond getting customers to buy your products, but to make them lifetime customers.
First mover advantage plays a major part in differentiating your company from competitors, so if your business idea is proprietary, start as early as you can. Always remember it is easier to build a business based on demand than build demand around a business.
If you want to discuss your business idea, shoot me an email at tolani@tolanithomas.com