In starting a business in this new era, you will need to put down some checklist to ensure you meet up with the certain request and demands that are pertinent to your business or business idea. To get started, finding an income-generating business idea is the first step in launching a new company of your own. Note that businesses are most successful when business owners actively seek out ways of bettering the communities they want to serve. When you’re done with that, you can go over to read through some of the checklists we have provided below to see how you measure up.
Here are some checklists to think about before settling on a company concept: Individuals who seek direction in launching a new company may use this checklist as a road map.
✔ Business Niche and Market Category
Verify if there is a need or gap that can be filled by the company you intend to start. Make sure there is a market for your product or service by conducting a feasibility study. Think about how big the market is in the industry you wish to break into.
✔ Register Your Business with CAC
A company’s credibility, standing in the community, and ability to operate legally all benefit greatly from being registered as a legitimate enterprise. In Nigerian law, a registered business and its proprietor are two distinct entities. This means the business owner enjoys their own shield from the law. The business owner assumes no personal risk for any claims made against the company.
Additionally, a registered business has an advantage when applying for a loan from a bank compared to an individual’s application. When raising money for your company, having all the proper documentation in order is essential, especially when dealing with financial institutions like banks. This is so because people will treat your business as if it were a real entity that deserves to be followed and responsible for. That’s why people may have faith in you and rely on you.
Steps to Register Your Business With CAC
The steps required to register your business with CAC are simple and straightforward. The following are the steps to register your business with CAC:
1. Business Name
Having a registered business name approved by the corporate affairs commission (CAC) is the first step in forming a legal business entity. The CAC agency helps determine if your desired business name has already been taken by another company. If a particular business name is already in use, contains phrases that are used by government agencies, or is too confusing, it will most likely be rejected.
2. Make Arrange For a Memorandum of Association
Seek the assistance of an attorney to help prepare your MOA (Memorandum of Association) and other documents relating to the aims of the business you plan to form. He/she is responsible for knowing who owns shares in the business, doing background checks on all shareholders and directors, and ensuring that they are all of legal age, sound mind, and not criminals. The corporate affairs commission will next conduct a thorough review of each applicant based on the identity of the documents submitted.
3. Get a Pre-registration Form
A pre-registration form is a form that requires all the relevant information about your business. A lawyer can help with the necessary procedures, once you’ve included all the necessary information in this form, resubmit it to the commission.
4. Stamp Duty Payment and Filling Fee
Payment must be made through a recognized bank to the Federal Inland Revenue Services (FIRS) before the applicant may get his or her Memorandum and Articles of Association (MOA) and part of the incorporation paperwork stamped. After the fee has been paid, the necessary papers and documentation will be sent to the CAC. It may take up to six weeks from the date of application for the applicant to get their Certificate of Incorporation.
5. Get ready to submit a scanned copy of your paperwork.
A scanned copy of your signed pre-registration paperwork and supporting documentation will be created at this point and uploaded online for processing. It should have the following structure:
• CAC1.1
• MMA (Memorandum and Articles of Association)
• CAC-accepted subscriber/Director/shareholder identification documents
• Documentation of money transferred to the Corporate Affairs Commission.
• Identification forms of the subscriber(s)/Director(s) and shareholder(s) recognized by CAC.
• Evidence of payments made to the corporate affairs commission.
6. Submit Your Original Documents
Submit the original copies of the documents that were scanned. The following are the documents to be submitted.
• Registration requirements for a company
• Certification of compliance from your lawyer
• The relevant documents to start a business in Nigeria.
• Memorandum and Articles of Association
• A receipt of your stamp duties payment
• A registered business address.
• The number of employees in your company from 2 to 50 employees.
• The age of your employees (they cannot be below 18 years old.)
• Keep in mind that if any of your employees have been rejected by CAMA or are mentally unstable, your business registration will be declined.
✔ Get a Business Insurance
What is a Business Insurance? Business insurance or commercial insurance, shields companies from financial ruin in the case of unforeseen perils encountered during regular operations. Property damage, lawsuits, and staff accidents are just some of the hazards that may be covered by company insurance. Business owners may protect themselves against a variety of financial losses by purchasing several forms of commercial insurance. Commercial insurance requirements are also determined after careful consideration of the many hazards that a company faces.
How to Get an Insurance for Business in Nigeria
Determine Which Commercial Insurance Policy Is Right for Your Business
You have a plethora of options to choose from when analyzing the type of insurance that best suits your business. We have “general liability insurance” which is for bodily damages of staff or other forms of damages caused by your business, and “occupiers’ insurance” which is for owners of a property who are not present on the premises e.g., Hotels shopping centres, and apartment complexes. These are just a few of the many insurance policies in Nigeria. Choose the insurance policy that best resonates with your business and your unique area of operation.
Perform a Risk Analysis.
Evaluate the potential threats to your company, such as catastrophes, litigation, and fatalities. Not all insurance policies will protect you in the ways you want them to, so be sure to buy insurance to cover every threat to your business.
Find the Best Deals
The easiest way to save money on insurance is to seek many quotes from different insurance companies and choose the one with a fair total cost. You should evaluate different companies’ insurance policy’s premiums, deductibles, and coverage limits to get the best deal.
✔ A Business Bank Account
The following are the required documents needed to open a business account in Nigeria. This requirement may vary based on your type of business.
• A resolution passed by the Board of Directors authorizing the account’s establishment and naming the authorized signatories.
• Certified Memorandum and Articles of Association (Memart)
• Verified copy of Incorporation papers.
• Residential address of the directors.
• Passports photograph of the signatories.
• Bank Verification Number of Directors.
• Valid forms of director identity such as international passports, driver’s licenses, etc.
• The company’s Taxpayer Identification Number (TIN)
• Utility bills of business addresses such as the Power Holding Company of Nigeria (PHCN), water bills, etc.
• Foreign nationals may need a special residential permit or work permit.
• Company account holders must provide 2 completed reference forms.
How To Apply for a Business Loan in Nigeria
The following are the complete steps to applying for a Business Loan in Nigeria:
Verify Your Creditworthiness
Creditworthiness is often used as a criterion by financial institutions when deciding whether or not to give or extend credit. As a result, the likelihood of your loan being approved depends heavily on the creditworthiness of your business. As an added bonus, the CRC Credit Bureau makes this resource available to you. The credit report is also known as a CIR. The Credit Information Report (CIR) is a comprehensive record of your loan history, including both active and closed accounts. It also reveals your past loan repayment history, which can be a deal breaker if you’re hoping to secure financing.
Prepare All The Important Documents of Your Business
Every financial institution requires proper documentation before granting a loan thus the second step is to gather all pertinent business paperwork. Collecting all the paperwork that may be required when applying for a loan will benefit both you and your business. And here’s what else you should expect to find in most legal docs:
• 1-2 years of individual and business tax returns.
• Bank statement for the past year
• Evidence of any asset owned
• A Business Plan
• Documents of registration with the CAC and a shareholders’ agreement
• Personnel employed in the past year’s paycheck
• Recent two-year income statement documentation may be required.
Research for a Reliable Loan Company
Researching loan Institutions is the next step after figuring out your creditworthiness and acquiring the required paperwork. Loans from various financial institutions are subject to varying sets of restrictions and limitations. The challenge, then, is to identify the optimal solution for your circumstances. Seek advice from industry leaders and other specialists as well. Choose the right kind of loan for your situation instead taking a blind step.
Submit an Application
This process varies based on the bank/ financial institution. Consequently, receive the loan application form from the lender and fill it out. You should also give the loan agreement form a thorough reading before signing it. The loan’s interest rate, late fees, and other costs are all spelt out in this contract. In essence, this will help you determine if and when you need to consult a lawyer regarding the form’s many terms. A credit check will be run by the institution when the application is submitted.
Include Supporting Materials
Including supporting materials always makes an application look more legitimate. You’ll need to submit a piece of writing with your loan application; this might be anything from a personal statement to a detailed company strategy. Your business strategy, financials, and other supporting materials should be submitted. If you do this, you’ll have a better chance of getting the loan.
✔ Get a Website For Business
The pace and nature of the online world are both constant and rapid. Having a well-made website that effectively represents your company is essential. Without it, you’ll lag behind while your rivals keep one step ahead. In addition, your marketing activities will not be successful without a website. Below are 5 reasons why a website is important for your business:
It Depicts Professionalism
Many potential customers will not see your company as a viable alternative without a professional website. Companies without websites are perceived as companies that are poorly managed. The world is evolving in technology and to keep up with the current market, having a digital presence using a website is pertinent. If customers can find everything they need in one convenient location they are most likely to stick with your business.
A website is essential for even the smallest local business or organization because it builds trust and credibility between business owners and their customers. A well-designed and functional website for your business will attract more customers than any other form of social media strategy.
All other Promotional Activities Revolve Around Websites.
A professional website can be seen as either the initial point of contact between you and a potential consumer or the last destination for customers who have followed links from social media or digital advertisements to complete a transaction.
A potential customer just casually scrolling through their phones can get information about prices and menu items by clicking a pin on Google Maps. Whether you’re promoting your business online or off, all roads should lead back to your very own, unique website. When a website serves as the central hub for all aspects of a campaign, management becomes much simpler. Therefore, establishing a website is crucial, as it is the groundwork for future success.
Helps You Communicate with Your Customers 24/7
Most stores and businesses adhere to strict opening and closing times. A customer who wishes to make a purchase should be present within these strict working hours. However, thanks to web-enabled online shopping and automation solutions, you can boost sales and deliver a service without actually being there, cutting down on overhead costs without negatively impacting the client experience. If you are running an online store, this could mean they can make purchases when your physical store is closed.
Even if you don’t sell anything directly to clients online, a website and a robust online presence will allow them to learn more about your company and interact with it even when you’re not there.
You Can Get More Leads By Using Your Website.
Businesses on the first page of local search results are chosen by 92% of users. The goal of every company should be to get their website listed on the top page of Google. The click-through rate decreases as users scroll down the first page of search results. Most users only look at the top three results when conducting a search. A desktop search on Google returns a 35% CTR for the top result. Having a first-page Google ranking for a relevant term is invaluable. It’s a cost-effective way to boost your company’s lead generation efforts. This is an intangible asset, as it increases your company’s worth.
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✔ Hiring Staff For Your Business
For a business to thrive you need competent employees. Below are the guides on how to hire the best employees for your business:
Find out what you can
Get ready to hire by reviewing job postings that are comparable to yours and the resumes of successful candidates to get a sense of the qualifications necessary for the position. Keep an eye on local and industry-wide hiring trends to learn the most in-demand job titles and search terms, and use salary comparisons to set a fair wage. Create a list of the most important tasks your new hire will be accountable for and a profile of your ideal applicant to use as a starting point for developing a compelling job description.
Construct a Compelling Job description/ Opening
In order to stand shoulder-to-shoulder with your competitors, you need a proper job description. Put some thought into what your ideal prospect would be looking for, and use those terms liberally throughout the description. Keep it informative, and friendly while accurately detailing the position’s responsibilities, qualifications, and benefits.
Assess The Submitted Resumes
After putting out a written job opening, expect a flood of applications vying for the position. Start by sorting out applicants’ resumes based on eligibility, work experience, abilities and how competent they were in their previous jobs. If a candidate doesn’t meet your primary criteria, you may eliminate them from consideration by sending them a rejection email and wishing them luck in their next adventure. You can tell a lot about a candidate’s motives, experience, and work style from a resume.
Select The Best Candidates Through an Interview
After sourcing out the best applicants through their resumes, the next step is to schedule in-person interviews with at least three of the individuals who showed the most promise. In order to learn more about their experience, qualifications, personality, and interest in the position and the firm, you should ask probing questions like:
• Please introduce yourself
• Explain your motivation for wanting to work for this firm.
• In what ways could you improve?
• Tell me about the one thing in your career of which you are most proud.
• Tell me about your perfect place of employment.
Select Your Ideal Candidate
It might be challenging to find the proper person to fill a position when there are several qualified applicants. Take into account the information you acquired from the candidates’ applications, interviews, and references before making a final choice. Think about what each candidate can bring to the table in terms of teamwork and the company’s ethos, and discuss your findings with others who had a hand in the hiring process. Think about what you want to accomplish with your company and hire someone who can help you get there.
Provide A Job Offer
It’s time to make an offer of employment to the candidate you’ve decided is the best fit. Email the candidate to arrange a phone call before delivering the formal offer letter. Share your enthusiasm for having them join your team, and go over the specifics of your offer (compensation, perks, start date, etc.) during the conversation. If an applicant accepts your offer of employment over the phone, follow up with a formal letter. Everything you discussed in the phone call should be included in the offer letter.
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✔ How To Get Financing For Business Start-Ups
The following are a few of the many financial institutions that offer startups loans with zero collateral in Nigeria:
Grofin
This is a financial institution serving clients in Africa and the Middle East. This institution provides funding of up to $1.5 million to small and medium-sized businesses and their reach extends to countries including South Africa, Nigeria, Ghana, and Ivory Coast.
SMEDAN
SMEDAN was established to provide capital for and support the growth of micro, small, and medium-sized businesses. However, they do more than just keep an eye on things; they actively coordinate, create, and promote policy ideas that benefit companies in these fields.
Zedvance
This is an unrestricted loan provider worth looking into. The maximum loan amount you can request from Zedvance is N5 million, and the maximum loan term is 18 months. It only takes a few minutes to finish the entire process and get credited.
One Fi
One fi, formerly known as ‘one credit’’ is a loan company that serves small and medium-sized enterprises (SMEs) with short-term services. However, before approving you, they will analyze your credit history. Their loan terms are between three and six months, and the most they will lend is N200,000.
C24
C24 is a microfinance institution whose sole purpose is to help businesses achieve their goals by offering access to necessary financing without collaterals. Additionally, the processing time for a C24 loan is much shorter than standard rates, and the entire application process can be completed online.
Ways to Get Finance or Funding For Your Business
1. Personal Funding or Bootstrapping
Personal funding also referred to as “bootstrapping,” involves using a personal savings account, credit cards, or home equity to launch a company. Bootstrapping or funding a firm with personal savings rather than bank loans or outside investors can be an effective strategy as it allows you to keep 100% of the profits. If you run into a loss along the way, this can help you avoid being bogged down by a large number of loans and monthly payments. Although bootstrapping can be helpful, it is advisable to bring in outside investors if you want to rapidly expand your business.
2. Crowdfunding
Crowdfunding is a method wherein a private company solicits monetary contributions from the general public, typically in exchange for a stake in the business. Typically, businesses seek funding from angel investors or venture capitalists, in which case a small number of people invest substantial amounts in the company.
Your investors will receive equity in your company in exchange for their financial backing, but this equity will be less liquid than publicly traded shares. Crowdfunding also has less stringent regulations than initial public offerings.
They are different types of crowdfunding Namely :
Equity crowdfunding: Investors contribute money in exchange for a stake in the firm or a cut of the earnings from a particular product.
Debt crowdfunding: They lend money to a company at relatively high-interest rates, spreading their overall lending risk across several smaller loans.
Reward-Based Crowdfunding: Operates on the basis of monetary donations and in-kind rewards; the business seeking funds announces a goal and solicits contributions from the public.
3. Venture Capital
In this corporate financing model, the investor provides capital and strategic input in exchange for equity in the new company. This entails selling off a portion of your company to an outside investor. The sale of company shares to the general public is a common way for venture capitalists to make a profit on their investments. This type of financing is not for all entrepreneurs, as Venture capitalists are interested in investing in technology-driven businesses with strong growth potential in fields like IT, comms, and biotech.
4. Grants
A grant is an unrequited financial gift made to an organization under certain conditions. However, the terms of the grant require you to put it to use or face having to pay it back. Furthermore, it is not unusual to obtain further financing from the same government source after initially receiving a grant.
5. Business Incubators and Accelerator Program
Incubators are places where new firms and other startups can share office space and other resources like computers and office equipment ( This usually lasts between one or two years). Incubators often allow start-ups to use their facilities for free or at reduced rates, such as in the case of product development and testing.
Most company “incubators” or “accelerators” cater to startups in high-tech industries like biotechnology, ICT, multimedia, and manufacturing by helping them through the early phases of growth. However, there are incubators for local economic development that aim to address issues like job creation, neighbourhood rejuvenation, and resource sharing.
6. Bank Loans
Small and medium-sized firms typically obtain capital through bank loans. When deciding on a loan, it’s important to weigh the variety of benefits available from each. Loans are typically more difficult for new firms to obtain than they are for more established ones. Loans are more readily available to entrepreneurs that have both a strong business strategy and an excellent credit history.
✔ How To Create a Business Plan
A formal written document describing the objectives of a firm, the strategies for obtaining those goals, and the time frame for the attainment of the goals are referred to as a business plan. The business strategy also includes an explanation of the company’s mission and goals, as well as a history of and estimates for the company’s finances. This document taken as a whole, represents a plan or road map for the company.
Executive Summary
This is where you highlight your business goals. It ought to provide an explanation of why you’re in business, what you sell, and how you expect to expand financially. An executive summary should be well-detailed and written in more in-depth portions as Investors will likely read it first.
Company Description
This section should be a brief summary of your company that includes details like the legal name of your corporation, your company’s official address, the names of your company’s top executives( as well as their individual technical talents, the company’s background and current operations.
In addition, the business structure (sole proprietorship, partnership, or corporation) and the percentage of ownership and level of activity of each owner should be specified in the company description.
Goals and objectives
This section details your company’s short-term and long-term goals and objectives, why you need funding and how it will help your business expand, and what you’ll do with it. This will further convince potential investors or lenders to give you a loan. The goal is to explain exactly how the loan or investment would help your business expand.
Products And Services
Explain what it is that you sell or aim to sell. The following elements should be included:
• A detailed description of how your service or product functions.
• The method you use to determine prices for your services.
• Typical clients who frequent your business.
• How you plan to manage your inventory and complete orders.
• A method for making sales.
• How do you intend to Market your business
• Trademarks and patents that apply to your product or service now or in the future can also be discussed.
Market Research
This section is where you convince your investors that your product (or services) is superior to your competitors. Identify and describe your rivals in the market analysis part of your paper. Talk about your strengths and weaknesses. Explain why you’re targeting a niche or unsaturated market if that’s the case.
Advertising and Selling Strategy
Outline your marketing strategy and how you intend to win over new customers and maintain customer loyalty.
Financial Analysis
As a new company, you might not have a lot of data available regarding your company’s financial health. But if you’re already in business, you should also include a balance sheet detailing your assets and liabilities and a cash flow statement detailing cash coming into and going out of the business. For example:
• The margin at which your net income exceeds your total revenue.
• Liquidity and debt repayment capacity are quantified by the current ratio.
• The accounts receivable turnover ratio quantifies the number of times per year that receivables are collected.
Here is where you may put charts and graphs that help your readers get a feel for your company’s financial health.
Budgeting and Planning
This section of your business plan is crucial. It describes how your company will make money and be able to pay back the loan or provide investors with a reasonable return on their investment. Monthly or quarterly sales, expenses, and profit projections for at least two to three years need to be provided, with projections for the future based on the assumption that a fresh loan has been secured. To ensure accuracy, review historical financial statements in depth before making projections.
Appendix
This section is for any leftover information that was excluded from your main documents such as property leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories, as well as resumes of important workers. A table of contents should be included at the beginning of this section if the appendix is lengthy.
