Quite a number of people have sent me emails asking for information about doing business in Abuja. Although we have seen many success stories of people doing great business and making lots of money here in the FCT, we also know that many fold up after a year or two, which is about the length of time that the initial rent for office space lasts. This means that (most probably – this is just my own opinion), roughly 40% percent of new businesses fold up when the rent expires. I think there are four major factors that affect, directly or indirectly, the success or failure of a business here in the FCT. These are:
1. High cost of rentDepending on the location, rent can be very expensive, both for commercial and residential purposes. Landlords usually ask for two years’ rent in advance, and an additional 10% for legal and agency fees. Rents are between $30,000 to $40,000 per annum for 250-500 square meters) in such places like Asokoro, Maitama, Wuse, Jabi, Utako, Central Business District . The catch is that depending on the type of business you want to do, these are the areas accessible to people who can afford to patronise a business, so these are places you want to explore. Rent, of course, is much cheaper in the outskirts, but your target clients will not be able to reach you. Also, there are office spaces that are much cheaper in the above-mentioned districts, perhaps by one half or one third of that amount, but the space is either small or hidden, or no guarantee of constant light or water, or it is not accessible to people by car, or lack of parking space, etc.
2. High cost of operating expenses
Since electricity is not guaranteed on a 24-hour basis (power failures are expected on a daily basis, lasting 3 to 4 hours at a time and up to 48 hours), so one has to set aside a good part of the budget for these. A generator is a must, and which means you need to fuel it, have it maintained and serviced regularly, etc. Lack of genuine and honest technicians will pose another problem, and these are guaranteed to kill businesses.
3. Unskilled and unreliable staff
I’ve heard of stories from customers complaining about staff who do not know about the products and services they are selling. For example, a waiter in a restaurant does not know the difference between a diet cola and regular cola, or maybe the service is slow because the staff are not trained in providing the best service to the customer. Nothing kills business faster than rude and unkempt personnel.
4. Business is not essential to Abuja residents
There are many businesses that attract a large patronage in other countries but may not have the same effect in Abuja, where due to security threats and other worries, people do not venture out if not truly necessary.
In any case, if you really want to give it a try and need info on how to go about it, the World Bank and International Finance Corporation released a publication called DOING BUSINESS IN NIGERIA 2010, which “investigates the regulations that enhance business activity and those that constrain it.” This publication contains the step-by-step process of registering a company, cost (as of 2010), and how long it takes. Doing Business in Nigeria 2010 and other subnational and regional Doing Business studies can be downloaded at no charge at http://subnational.doingbusiness.org.
MEANWHILE... the FCT ranks 17th on list of where it is easiest to do business in Nigeria
According to by the World Bank and the International Finance Corporation, the FCT is on number 17 on a list of where is easiest place to do business in Nigeria. The complete list is as follows (as of 2010):1. Jigawa (easiest)Abuja Business: Tips
2. Gombe
3. Borno
4. Kebbi
5. Kogi
6. Yobe
7. Katsina
8. Kano
9. Zamfara
10. Bauchi
11. Taraba
12. Sokoto
13. Benue
14. Kwara
15. Plateau
16. Nigeri
17. Abuja
18. Nasarawa
19. Adamawa
20. Akwa Ibom
21. Edo
22. Kaduna
23. Osun
24. Ondo
25. Lagos
26. Oyo
27. Rivers
28. Bayelsa
29. Delta
30. Enugu
31. Ebonyi
32. Abia
33. Cross River
34. Ekiti
35. Anambra
36. Imo
37. Ogun
It’s no secret that there are many people over the decades, both Nigerians and foreigners, who have made it big here as entrepreneurs in Africa’s most populous country. These business men and women, these multinationals, these startups and entrepreneurs and traders and artisans and buyers and sellers, these Indians and Lebanese, these Chinese and Israelis, these Hausas, Esans, Binis and Urhobos, etc. dared to defy the odds and have been hugely rewarded for taking what is often called a calculated risk. The result? They watched their businesses grow… and grow… and grow. They built their own offices, printed and distributed fliers, created their own brands, cursed the electric company and bought their own generators, and voila: Not only did these people laugh their ways to the bank – they also sang and danced…and drove a Hummer, yes, the one with the specialized plate number: Business Rules.
Handicrafts on sale at the American International School Abuja bazaarSO WHAT ARE YOU WAITING FOR?
I bet you a million naira that you know at least a couple of these people who are doing their parts in pushing the Nigerian economy forward while earning the tag business tycoon. A couple of them may own oil blocks in the Niger Delta, some are building roads and bridges from North to South, others are managing a fleet of airplanes for domestic and international travelers, but really, majority of them are just ordinary people, happily and successfully tending to their small-scale businesses in the neighborhood, offering products and services that you and I can’t do without. They are our friends, our relatives, our former classmates, our former officemates and teachers and co-tenants and neighbors. Many of them started with one desk and a second-hand manual typewriter. They started with nobody but themselves to employ. They did the marketing, the delivery, the clerical and janitorial jobs, while acting as a receptionist and security guard all in one day. With a combination of hard work, great accounting skills, patience, luck, prayers, perseverance and foresight, they made it and are now commanding a workforce of thousands, hobnobbing with the rich and mighty, and boasting of properties not only in Nigeria but also in the US, UK, and Dubai. Yes, it’s a fact that some of them have had it easy in one go, but what we really want to talk about here is you who are planning to set up your own business. If you are really serious, nothing should stop you. Just go ahead and do it, as some would say. But be prepared and know the rules.
Narrowing it down to The Abuja Factor (also known as CREATING A NICHE)
Compared to Lagos (the Commercial Capital of Nigeria), the population of Abuja is small. While Lagos is a marketer’s delight (put up a billboard on the Third Mainland Bridge and you can be sure that millions of people will see it on a daily basis, triple that when there’s a traffic jam, which is about twice a day everyday, yes, those famous go-slows do well for roadside advertisement), Abuja could be a marketing challenge because of its small size. Business outfits like hotels, restaurants/bars, beauty salons, dry-cleaners, internet providers, hospitals, cyber centres, filling stations, supermarkets – they all have to compete for attention and patronage. Except for those who have made names like Hilton, Chase Restaurant, Julius Berger, Park and Shop, Amigos, Sheraton, Ceddi Plaza, Daily Trust, etc., all the rest are just one among the many who have to try hard on a daily basis to be in the radar of consumers. There are at least a number of providers or suppliers for every service or product you can think of in Abuja. (Okay, we only have one bowling centre, one cinema house, no Starbucks, no McDonalds or Shakey’s Pizza, but who cares much about these things, really?) The products and services that are available here may not be the best you can have in Nigeria, but they are available. This means Abujans have a choice – and if they are not satisfied with, say, the ice cream in Maitama, they will surely go to Wuse, which is just a minutes’ drive away, even on a busy day. On the other hand, they can also be fiercely loyal. Give them what they need and they will be with you right after they close from work.
So now that you intend to set up your own business in Abuja, what are the things you must you know? We at Inside Track Abuja have made a research and have come up with the following essentials to guide you. Ponder each point very well before you start your business, whatever it is.
What’s the plan?
If an ordinary party requires so much planning, how much more a business venture? If you need a map to know your way around a city, so also would you need a plan to know your way around the business you are going to set up. Anything that needs to grow must start with a seed. Any structure that needs to rise must start with a foundation. Anyone who wants to succeed must be armed with the right skills, tools, knowledge, and attitude. The road to successful entrepreneurship (ask those who have tried) is a long one. It is often rough, desolate, unfriendly, discouraging, time-consuming, energy-sapping, and unrewarding when you are just starting, which takes from one to two years. Only those who are prepared and well-equipped will get there and reap the rewards. And when we talk of being prepared, we mean exactly just that. They start with a business plan.
Make a plan
It’s amazing how many people these days go into business unprepared. You ask them what’s their marketing plan and they either have no idea what it is or say it’s not that important. After all, they tell you, their grandfather set up a successful construction business without a marketing plan, not even a single advert on radio.
While that may be true, times have changed. In the olden days, there was little competition. Now, everyone is doing what you are doing and everyone is thinking what you are thinking. Or worse still, everyone is already doing what you are thinking. Mention a small-scale, common business outfit now and there are hundreds of them along your street. There are millions more in the whole of your area. So how then do you get ahead of the pack?
Please your customers: let us count the ways
One of the most enduring qualities of successful entrepreneurs is that they understand how human relationships are built or destroyed. They understand that customers could be finicky and hard to please, therefore everything is done to ensure that they are satisfied all the time. Sometimes, it’s not about whether your boutique or supermarket or pharmacy is brimming with stocks. It’s not about whether you have a fully-furnished, fully air-conditioned, well-staffed office or restaurant. These are all important, but first and foremost, business is about giving your customers satisfaction, it’s about meeting their needs, it’s about fulfilling your promises, and establishing long-lasting relationships. Hiring incompetent office staff (ill-mannered is the word), for example, is the best way to drive your clients and customers away and eventually kill your own business.
Be the best in your area (also known as being realistic with your projections)
It’s nice to dream big, be the next Bill Gates or Martha Stewart and go global by next week Tuesday. But dreaming big can actually stunt your growth faster than you could say unrealistic projections. The logic is simple: you aim high, you fail to achieve half of your expectations, you give up trying. Failure is inevitable if you don’t have the support, the tools, the financial backing that you will need to reach these goals. Sometimes your dreams can be so grandiose you think you cannot start a business unless you have an office on the 12th Floor of So-So Towers. Naturally you fail even before you start. If this happens, you will certainly get discouraged and have no motivation to move on.
The cure? Set achievable goals and see how this will push you to go further once the goal has been accomplished. Instead of aiming to go nationwide, why not simply aim to be the best you in your area. Understand that if the people in the neighborhood where you operate do not see your fastfood centre as the best in town, how then do you expect those away from you to do so? What is being said here is that be the best, say, caterer in your area so that when they mention your name, they know what you do, or if catering is mentioned, your name will give a bright flash. Start small, then grow big. Stand up comedians are good examples of this principle. They start by telling jokes in front of their families. Then they start performing among their friends. Soon, they move on to parties. Later on, you see them performing in high places like the Muson Center and the Aso Rock. (If you are a performer, you haven’t arrived if you haven’t been invited to do your thing in front of the President of the FRN.}
Stretch the naira
One of the most irrefutable facts in the world of entrepreneurship is that you need money to make money. Many people however misinterpret this to mean you can’t start a business unless you are rolling in millions of dollars. Worst of all, they think they can’t work well unless they have an office that is fully equipped with expensive stuff, surrounded with workers whose salary they have to pay monthly. The truth is, when it comes to office appliances and equipment, the latest gadgets like PCs, laptops, printers, and other machines are usually more expensive than those that preceded them, but they often do the same job. When Amina Williams, a young woman who wanted to start an events planning company in Abuja a couple of months ago, went to the shops for a laptop, she discovered that the latest model is the HP Pavilion, which costs around N190,000. Needing also a printer and a scanner, she decided instead to get the HP530 model at N105,000 and still have enough money to buy a printer/scanner for N11,000 and a laptop bag for N7000. With the rest of money, she got her stationeries like plain sheets and envelopes, a white board, and other office essentials. This is what I mean by stretching the naira.
Know that the daily grind is real
If you are giving up your day job to become your own boss thinking that you will have more time for yourself, then you are mistaken. It’s true that being your own boss means you can dictate your working hours and do as you please, not to mention freedom from trying to please your boss or employers. But then you will also soon discover that you have to work twice as hard as when you are office-employed. You also have to work longer hours. Working on limited resources at first, you will naturally be unable to employ office staff, which means you will have to do everything. You answer the phone, type letters, prepare marketing materials, make deliveries (if you are selling products), meet with suppliers, chase customers, and even clean the office at times. Most of your days will mean you have to be out there pushing your products, informing people of your services, enticing them to visit your shop or office, otherwise, there’s no business for you. “If you don’t move,” says Lolit Victorio, CEO of Britamold Limited, an Abuja-based company which deals with security doors, landscaping and interior design, “nothing will happen.” In other words, you have to meet your target sales on a daily, weekly, or monthly basis to sustain the business. How is that much easier than sitting in an office and getting a fixed, monthly salary at the end of the month?
And most of all: Find those who don’t know you
The general public, your potential customers, know that the power lies with them. They decide whether to patronize you or not, period. If you don’t go out there and meet them, if you don’t show any effort of introducing your products and services, chances are that they will ignore you. To succeed in business is all about whether people are aware you exist or not. How many strangers will say “I’ve never heard of it” when you mention your company? And how many people will actually say, “Yes, I know the place!” Always keep in mind then that “If people don’t know you, they can’t do business with you.”
No comments:
Post a Comment