What are the best small scale business ideas in Nigeria? What is the best business to start in a harsh environment like Nigeria or Lagos for 2020? What are the best small business opportunities for Nigerians (Investment Opportunities) living in Diaspora or oversea?
For quite sometime now, my email box has been filled with request from fellow Nigerian entrepreneurs asking for the fastest growing business opportunities in Nigeria which they can invest in. Before I proceed with any detailed explanation, I want to state clearly that there are untapped small scale business opportunities in every industry both in Nigeria and all over the world; you just need to dig deeper to find such niches.
Now for those landing on this blog for the first time, i think it is important i introduce myself briefly. I am Ajaero Tony Martins; an entrepreneur and investor, with a passion to share my knowledge and also learn from others. A company i control own the biggest business blog network in Nigeria and probably the fastest growing entrepreneurship blog in the world.
Now from my personal experience and interaction with Nigerians both home and abroad, I came to observe that many people are interested in investing in Nigeria by setting up their own companies but fear seems to hold them back. I have met individuals who have been living and working abroad for over ten years; they have made a lot of money over there.
But rather than come back to Nigeria and start a business, taking advantage of the currency exchange difference between the Naira and Dollar, Euro or Pounds; they would rather stay abroad because they are afraid of the uncertainty of doing business in Nigeria.
Over the years of doing business, I have met a lot of Nigerians and some foreigners with a lot of cash; but they just don’t know where to invest their money. Some even tried to invest in the stock market and they lost their money, not because the stock market is bad but because they lack the needed experience and knowledge to invest in the stock market. Well, I still invest in the stock market regardless of its ups and downs; because I have the needed technical know-how.
Well, if you are one of such individuals that is scared of coming back to Nigeria to establish a company, the points below will help quell that fear.
6 Reasons Why You Should Start a Business in Nigeria Today
1. Now Nigeria still remains a hub for most entrepreneurs and investors. In fact, Nigeria is now the largest economy in Africa, the number one destination for Foreign Direct Investment in Africa and one of the fastest growing economies in the world. That’s why South African and Chinese companies are scrambling to invest in Nigeria.
- Tiger brand recently acquired Aliko Dangote’s stake in Dangote Flour. Note that Dangote bought back some shares from them.
- MTN South Africa recently mopped up shares of MTN Nigeria and Wal-Mart has moved heavily into Nigeria through its subsidiary, Shop Rite.
- GlaxoSmithKline U.K has increased its stake in GlaxoSmithKline Nigeria PLC.
- General Electric is partnering with power generation companies in Nigeria to boost the nation’s power supply.
- Chinese companies are partnering with Nigerian companies to setup manufacturing plants and construction Coys right here in Nigeria. An example of such plant is Innoson Vehicle Manufacturing company in Nnewi.
- Nissan has also established an auto manufacturing plant in Nigeria.
The list goes on and on but the point I want to stress is that this is the right time to invest in Nigeria. Please if you are in doubt of any of the information listed above, Google is your friend. Just do a search.
2. There are over 180 million people resident in Nigeria and the population in Nigeria is been predicted to overtake that of United States by 2050. Now what this means in essence is that the market is big enough to absorb any product, provided enough marketing and awareness is created. Another positive impact of this population statistics is that there is cheap labor. One of the reasons China grew to become an industrial hub is because of her large population, which in turn can be an advantage, with respect to cheap the cost of labor and market availability.
3. Nigeria is fast developing and there is a huge need for innovative products. If you are resident in Nigeria, kindly reflect on the position of Nigeria ten years back and compare it with her present state; you will agree with me that there is a huge change.
Economically, technologically, etc; Nigeria is growing, whether you admit it or not won’t change the fact. Between 2009 and 2016, new companies were launched in Nigeria that disrupted their various industry. Examples of such companies are MTN, GLO, Uber, Taxify, Jumia, Konga. That is why entrepreneurs and institutional investors from countries like South Africa, China, Lebanon, Brazil, India, etc are scrambling to invest in Nigeria because they see the potential that we citizens don’t see.
4. Nigeria is currently riddled with problems and the government is currently battling to tackle these problems. I am talking about challenges such as falling oil prices, security, infrastructural decay, unemployment, power failure, corruption, fall in education standard, accommodation, etc. The average minds believe these problems can never be resolved and if it is to be resolved, it should be done by the government.
However, people with entrepreneurial mindset know that these problems are opportunities; and only those who act will turn these opportunities into profitable businesses. Now let’s look at the education industry. Between 2009 and 2017, new private universities and higher institution of learning are springing up to bridge the gap. In all honesty and humility, I want you to know that I am currently profiting from the security situation in the country by providing a solution to a specific security challenge.
5. The government is working to improve the economic condition of the country, by implementing several policies aimed at encouraging local content production and small scale enterprises. There’s also a tax holiday, incentive and duty-free import policy for those willing to invest in certain sectors of the economy. If you are well positioned to take advantages of such opportunities, you will make something from it.
6. The eye of most entrepreneurs and investors doing business in Nigeria is usually on Lagos, Abuja, and Port Harcourt. However, tremendous opportunities are laying waste in other states cities such as Owerri, Aba, Onitsha, Nnewi, Kano, Ogun, Ibadan, Enugu, etc. Take for instance Nairaland is being run from Ota, Ogun state. Yudala was launched in Owerri, Imo state. Innoson has its headquarters in Nnewi Anambra, same for other numerous companies.
Now to be honest with you, I don’t take heed to what the World bank and IMF statistics say about Nigeria. I am equally not moved by the politically inclined propaganda promoted on the media about Nigeria. I am an entrepreneur on ground, and I have personally assessed the situation on ground and charted out ways to harness it.
I would rather work with my own hard facts and proposed solutions than work with the media statistics. I think I have said enough. So without wasting your time, below are some small scale business ideas and opportunities in Nigeria you can invest in today.
Six Criteria You Must Meet Before Investing in Nigeria
Now for those who are eager to start a business or invest in Nigeria, there are a few criteria you must meet; so as to ensure you are well positioned for success
1. You must be prepared to be on ground in Nigeria
Yes, I have had so many people call me to talk to me about the possibilities of starting a business in Nigeria while running it from overseas. Now the honest truth is that you can successfully operate a business in Nigeria without being physically present; but not in the startup phase of the business.
You just don’t start a new business, turn it over to someone and travel out of the country; hoping that the person you handed your business over to will do a good job. This is one of the mistakes most Nigerians in Diaspora make.
If you are really serious about establishing a business in Nigeria, then you must be willing to be on ground to run the business for at least one year. Secondly, forget about doing business with your family members or close friends; it usually doesn’t end well. Rather, I will advice you seek professional help, incorporate your company and make sure your back is covered legally.
2. You must have knowledge of the business
To succeed as an entrepreneur in Nigeria, you must have skill and competence. Competence is a product of knowledge mixed with experience while skill is something you can develop over time through training. Please don’t start a business blindly simply because a family member or friend recommended such a business, the result of such a venture is usually devastating. Invest time first to learn everything you can about a business before you invest your money.
3. You must have a short or long term plan to employ people
To keep cost low, you may choose to start as a self employed entrepreneur operating from home, a shop or an office. There is nothing wrong with starting out this way, after all; I started out as a self employed entrepreneur working from home. But as you grow in business, you will need to bring in competent hands. However, you shouldn’t wait till then before you plan towards it, start now.
There is no much explanation to do here. To successfully setup a business in Nigeria, you must have capital. This is needed to get things done. Now when I say capital, I want to emphasize that it doesn’t have to be a million dollars. You can start with the little you have even if it is just enough money to get a laptop and an internet connection.
5. You must make sure your proposed business has an evergreen demand
Another mistake you must avoid is starting a business whose trend is dying. Take for instance a cyber café business, this business is dying because the trend is shifting towards mobile connectivity. Why go to a cyber café to access the internet when you can do it more cheaply at home?
6. You must always remember that success is not an overnight flight
Yea, this one is especially for those who are looking for a business to start that will provide a steady cash flow or a return of 30% – 50% in approximately one year. The truth is that it doesn’t work that way. Success can never be achieved or attained by sudden flight; it is a product of consistent, unyielding effort. So stop looking for the best business to start, instead; look for the best business you are willing to stick to regardless of the surrounding circumstances.
25 Small Scale Business ideas and Investment Opportunities in Nigeria for 2020
Do you know that one of the fastest growing business opportunities in Nigeria is catfish farming? The primary reason I listed catfish farming as one of the fastest business opportunities in Nigeria is because it’s an emerging industry that hasn’t reached its peak or full potential. The major players in this business are usually regional players. What this means in essence is that each major player in the catfish farming industry is focused only on a particular business terrain within the geographical location of the farm.
Now for those who don’t know, there is a bill being proposed now by the federal government of Nigeria to ban the importation of frozen fish. One this bill is passed into law by the national assembly, the local fish farmers will smile and you will be left behind. So why not position yourself now?
With respect to poultry farming, the ban imposed by the federal government of Nigeria with respect to the importation of live or frozen poultry birds has only helped explode the demand. To be honest with you, livestock farming in general is a booming business in Nigeria and the trend is not dying anytime soon.
You can even start this business from your backyard. With 150+million mouths to feed daily, there will always be demand for livestock products. However, lack of technical know-how and the use of crude equipment are the major factors hampering the growth of this industry.
If you can come in with adequate knowledge and the patience to nurture this business, you will reap immensely. Now you can choose to either venture into livestock breeding of animals or better still, you can stick to livestock feed production or equipment retailing.
- Poultry farming – Egg production, meat production, hatchery or day-old-chicks production, etc.
- Cattle Farming – Dairy (milk) production, beef, etc.
- Rabbit Farming
- Goat Farming
- Tilapia Fish Farming
- Grasscutter Farming
- Snail Farming
- Quail Farming
Nigeria is blessed with a lot of food and natural resources; and most of these natural resources are raw materials needed for the production of some finished products. Every day, tons of raw materials and food products leave the shores of Nigeria to countries such as India, Vietnam, China, USA, UK, Brazil, etc; yet, the demand is never met.
You can become an exporter by simply registering with the Nigerian Export Promotion Council and decide on the specific product you wish to export. Examples of products highly in demand both within and outside Nigeria are Chili pepper, Mango, Kola nuts, Bitter Kola, Cassava flakes (Garri), Cocoa, Groundnut, Yam flour, Cashew nuts, etc.
However, if you think you don’t have the capital or time to engage in agro-products exportation, then you can stay local by buying and selling them within the country. A good example of a product you can buy and sell for huge profits is Palm Oil.
Nigeria is blessed with a lot of mineral resources like Limestone, Coal, Iron ore, Bitumen, etc. Aside this, the mining industry in Nigeria is set to take off because the federal government in June 2013 implemented a policy to drive forward the mining industry by declaring the importation of mining equipment duty free. The government is also going after many dormant investors who were granted mining licenses but are not utilizing it. This act I believe, will spur the growth in the mining sector. If you have the financial capacity and a team, you can position yourself in this sector.
4. Setting up a private mini refinery
There are lots of business opportunities in the oil and gas sector. Building a private refinery and refining crude oil is another business you should look into because there is a lot of potential in it. In January 2012, the federal government announced the partial removal of subsidy and with a long term plan to totally remove fuel subsidy. What this means in essence is that petroleum product importers will now sell as they buy; thus bringing in competition and it is a known fact that 80% of petroleum products consumed in Nigeria are imported.
Now with the total removal of fuel subsidy, investors will now have the opportunity to set up their own refinery and produce fuel. Are you among those that think the total fuel subsidy removal is a pipe dream? Then think again because in May 2013, Aliko Dangote raised $9billion for the setting up of a refinery;
which will be sited in Ondo state. This project was relocated to Lekki Free Trade Zone, Lagos and is set to commence operation in 2018.
As at 2017, the government is undergoing research and consultation to set up modular refinery (an opportunity) in 6 oil producing states in the south. This is curb the activities of pipeline vandalism and illegal refining of crude oil (a problem).
Honestly, i understand that not everyone have the financial capacity and technical know-how to invest in a private refinery. Well, you can still tap into the oil and gas sector by setting up a filling station, starting a mini kerosene retailing depot or establishing a cooking gas retailing outlet. Which ever one you choose, you will surely make money. Enough said.
Fast Growing Small Scale Business ideas in Nigeria
5. Inland waterway Transport
There are lots of opportunities in the transport industry and inland waterway is one of them. Nigeria has a broad network of inland waterways comprising rivers, creeks, lakes and seas; yet, transportation still remains a challenge because investors are yet to tap into water transportation.
A lot of countries such as Italy, Thailand, etc have effectively been utilizing their waterways as a means of transport; thus reducing the traffic congestion on the road. All you need to do is to incorporate a company, obtain license from the state and federal government, import or purchase some locally fabricated boats; and you are in business.
Now it is a known fact that the mass media industry is saturated in Nigeria. However, this is only true for some cities in Nigeria such as Lagos and Abuja. I have travel through several parts of the countries and discovered that most states have no private TV station, and only rely on the government own TV stations; which are very incompetent, uncreative and unreliable.
I see an opportunity for entrepreneurs and investors with interest and competence in broadcasting or mass media. You can either choose to setup a radio station or TV Station. You think you don’t have the funds for a license and infrastructure to run a conventional TV and Radio station, then you should consider starting an online radio station, podcast or Youtube Video Channel. A lot of Nigerians have made fame and money running on a low cost model by simply using the internet. A few names you might know are Mark Angel Comedy (the famous Emmanuella), Linda Ikeji TV, LaughPillsComedy, PulseTv, etc.
There is a huge demand for excellent security services in Nigeria. As the government battle to improve the security situation in the country, individuals and corporate entities are now becoming aware of the fact that security is not the responsibility of the government alone; it is a collective responsibility. Hence, the current increase in demand for security guards, bodyguards, executive protection professionals and security gadgets or devices.
As an entrepreneur or investor, you can setup a security guard recruitment or training company, or you can setup an executive protection or bodyguard agency. Also, you can import and retail security products and safety devices.
There are over 500 schools (both Crèche, primary and secondary) in Lagos state alone; and each of these schools have a specific uniform or attire for their students. Okay, let’s look beyond educational institutions. Do you know that other individuals and corporate organizations are in need of uniforms for their security personnel, staff, etc?
There are also a lot or military (Army, Air Force, Navy), paramilitary (Civil Defense Corps, Police Force) and non-paramilitary (Road Safety, Traffic Warden, Kick against Indiscipline, Vigilante groups, etc) organizations in Nigeria that make use of uniforms. You can position yourself as a uniform supplier and make money from it.
Nigeria is still a developing country especially in the area of infrastructure but this is set to change in the nearest future. Massive constructions are currently on-going in Nigeria ranging from bridges, roads, towers and skyscrapers, etc. If you run a construction company oversee, or you have the financial capacity to assemble the needed team and machinery for a construction company; then this is a business you should invest in.
I have met a lot of individuals with money piling up in the bank, but they don’t seem to know what to do with that money. Yet, on every business trip I make, I hear stories of people facing accommodation problems; not because they can’t afford it but because there is none within their choice of location.
Also, I hear woeful stories from students in various universities and other high institutions who live under harsh conditions; not because they want to or can’t afford a comfortable place to live; but because they is no conducive apartment in close proximity to the institutions.
I also know the stress, effort and resources it took me before I got an office space both within and outside Lagos. What these facts or complaints are pointing to is that there is a massive need for buildings, both residential and commercial. It is a known fact that shelter is one of the basic needs of man.
Now for those who wouldn’t want to go through the ups and downs of running a business, you can choose to invest in development of hotels, school hostels for students, shopping malls, residential apartments, events and conference halls, etc.
11. Set up a writing company
If you are current with trend, you would have observed that most jobs in the United States are now being outsourced to countries like Philippines, India, China, etc. And as things stand now, a trickle of such outsourcing jobs are coming to Nigeria and one of such jobs is Article Writing or Ghostwriting. You can consider platforms such as Fiverr, Elance, Freelancer, etc.
Do you have passion and skill for writing? If yes, then you can either choose to write from home as a self employed freelance writer or you can setup a company, employ competent writers and source for jobs online. This business is easy to get into and it is very profitable.
In fact, let me put it to you that you don’t even need to source for writing from foreign countries, and deal with payment hurdles. There is a huge demand for well written content locally, and virtually a lack of quality writers. I know this because my company is also a player in the Media/Publishing industry.
12. Call center agency
Have you called the customer care service of a telecom network before? Or have you tried sending a message or complaint to a corporate organization before? Do you know that those who take your calls, complaints and respond accordingly are not employees of the companies you patronize; neither do they operate in the premises of the company? If you are hearing this for the first time, then welcome to the world of “Call center outsourcing.”
You can setup a call center agency and work for big companies on a contract basis. One sweet fact about this business is that you can always start small by becoming a call center agent from home, as it doesn’t require much startup capital unless you want to scale up by employing more helping hands.
The labour market is becoming tougher and there are over five million unemployed youths in Nigeria. Another hard fact is that companies are no longer employing full time in-house staff; they are now using the services of recruitment agencies to employ people based on contract basis.
This strategy is aimed at reducing the cost of doing business by avoiding the cost of conducting a recruitment exercise and also avoiding employee claims and benefits. This is the sole reason why banks and other companies are sacking their workers on daily basis.
So rather than fight the trend, why not profit from it by setting up a recruitment agency and connect jobseekers to their dream jobs. You can also be a corporate executive headhunter and make money poaching competent staff from one company to another. If this is too capital intensive for you, then you can setup a resume writing service from home and profit from the trend.
Clothing is another basic need of man. Regardless of the economy, people must wear clothes and this includes shoes, bags, underwear, perfumes, etc. Now there is a fast growing trend now and that is “Used clothes” or “Recycled clothes,” otherwise called “Okirika.”
Since the economy is getting tougher and there’s need to be clothed, the masses have resolved to buying used clothes rather than new ones. Still yet, there is a market for new clothes; for men, women, and kids. You can source your materials from China, Hong Kong, Italy, France, Dubai, India, etc.
Haulage and logistics is another booming business in Nigeria because regardless of the weather, people must haul their goods from one location to another. In fact, haulage or trucking business is one of the most profitable businesses so far; though it is management intensive. However, you can start with just a truck and see how it goes.
You can choose to focus on hauling containers for clients from the seaports to their various destinations or better still, you can choose to haul products of specific companies such as breweries, production companies, etc. You can also haul perishable goods from farms and villages to the marketplace or you can haul specialty products such as frozen foods, petroleum products, gas, etc.
Now there is also an opportunity for those who want to venture into haulage business but do not want to be bugged down by management requirements. All you need to do is to buy a truck and contract it to a Haulage and logistics company; which will in turn pay you a specified amount weekly or monthly based on agreement.
This is another form of haulage business, but this time you will be lifting humans. This is a business that requires providing transportation services to organizations that cannot afford to buy a vehicle in-house. Your clients in this case can be schools, religious organizations, NGOs, corporate bodies, etc.
Some corporate organizations can’t afford an in-house transport system for its executives and staff, so this is where you come in. You provide the cars or buses, provide the drivers and you are paid on a monthly bases or contract bases for the use of your transport services.
Another area of target is schools. Most schools would like to provide transport facilities for their students but they can’t afford it and this is where you come in. You provide a bus service system and send out a proposal to schools to use your bus services. Just imagine 20 or more young schools jointly using your student bus service system and you will catch the vision of this idea.
Small Scale Business Investment Opportunities in Nigeria
Nigeria is catching on with the rest of the world with respect to technology. If you are technologically inclined, you can setup shop in Nigeria and start offering e-services to clients. Example of such e-services include Web designing and development, Web hosting, App development, Digital marketing services, Search Engine Optimization services, Banner design services, Bulk SMS services, Online registration of exams such as JAMB, WAEC, professional courses, etc
18. Daycare centre
The demand for quality childcare service is increasing daily. Parents are now working harder just to generate enough income to keep the family going, thus leaving them with less time for the children.
Now to be honest with you, there are a lot of daycare centers existing but only a few are providing exceptional services; and parents that cherish their kids are never comfortable leaving their kids in a child care centre whose environment is dirty. If you can come in with exceptional service and creativity, you will make money from this business. Another thing you must know is that you can start this business from home.
Now for those who lack the capital and experience to setup a full-scale childcare center, you can still make profit of this niche by starting a small scale babysitting service or Nanny agency.
19. Training centers
Every year, millions of people sit for examinations and tests in Nigeria and most of these people usually need some kind of trainings or tutorials. You can position yourself as a provider of such training and make money off this niche. Examples of trainings you can offer include skill & vocational acquisition training, corporate management skill training, etc. You can also conduct tutorial for individuals writing professional exams like ICAN, WAEC, UTME, A. LEVEL, etc.
20. Waste Management
Waste management is another business with a future potential because Nigerians are yet to imbibe the habit of proper waste disposal. However, states like Lagos have been doing a lot to encourage proper waste disposal and management. Now there are several businesses you can start within the waste management niche and these include waste recycling, waste disposal, junk hauling, organic fertilizer production, etc.
21. Food processing
Another profitable industry to consider is the food processing industry. The concept of this industry is simply to take raw food materials and turn them into finished products. In fact, there are a lot of businesses you can do in this niche and examples of such businesses include Tomato puree production, Frozen food production, yogurt production, Vegetable oil production, Garri Processing, oil palm processing, groundnut processing, Fruit juice production, Rice milling, etc.
As the world goes green, and Nigeria battles her power supply challenges; there is an already established opening in Nigeria’s power sector. Even though the government has taken steps to deregulate the power sector by granting licenses for Independent Power Plants, granting a free import duty for the importation of power generation equipment and commissioning several power projects, this will never hamper the growing demand for alternative power generators such as solar energy, wind mills, Inverters, etc. You can either make money by importing and retailing these materials or you can choose to focus on installations.
23. Plantation Farming
Do you have a fertile vacant land and you know that you won’t be developing any structure on it in the nearest future? Then why not start a livestock farming, crop cultivation or plantation farming. There are a lot of cash crops you can plant, nurture and forget; and they will keep providing you with steady returns annually. Examples of crops you can start a plantation around are Orange, Plantain, Kola nut, Oil palm, Cocoa, Cassava, Yam, etc.
You can also venture into small scale manufacturing of products that are in daily need. You don’t need to build a factory or industrial plant; you can start on a small scale from your room or a rented store or apartment. Products you can start manufacturing include Toothpicks, Tissue paper & Serviette, chalk production, candle, Match sticks, nylons and polythene bags, cartons, paper bags, etc.
I get calls from individuals almost on daily basis who are interested in setting up a “sachet water” (Pure water) production plant. Now let me tell you the honest truth, the sachet water or pure water business is saturated and the business may die off very soon. Why did I say this? Well, I got information from a reliable source that there is a long term plan to ban the production of sachet or nylon water; so as to stem environmental degradation and checkmate blocked drainages.
So once this bill is passed into law, the sachet water production industry is toast. The only solution I foresee that can keep this business afloat is the establishment of a nylon recycling plant. However, to avoid being a victim of this yet-to-be proposed policy, it is advisable you venture into bottled water products and establish yourself as a brand.
27. Bars and Clubs
If not a hotel, you can consider investing on a bar or a night club. Again, it attracts tourists who are looking for an active night life in countries like Nigeria. Plus, many local young adults in Nigeria seek a fun night life. If you are interested in investing in the entertainment industry, then you should consider starting a night club or bar.
Despite the high number of livestock farmers in Nigeria, frozen fish and chicken are still being smuggled into the country through the border because there is a market for it. Some people don’t want to go through the stress of killing and preparing fowls for eating, so they prefer to buy ready-made frozen birds. With the right plan and a strategic location, you can make millions by investing in building and operating a cold room.
In conclusion, the investment opportunities in Nigeria are not limited to the list above. With a little digging and research, you will surely uncover more of these opportunities. However, the point I want to stress is that having the capital to invest in these opportunities does not mean you will succeed at it.
More important than your capital and the business opportunity is to make sure you have adequate understanding about the industry you intend investing in. Knowledge and experience are the prerequisites for low risk investing.