There are lots of challenges facing Nigerian entrepreneurs directly or indirectly. Apart from the need to gets market share from competitors, the environment is still growing and so are the challenges.
As you embark on the journey to become your own boss, you should know that the road to becoming a successful entrepreneur in Nigeria is not a smooth one, in fact, in the beginning, it is full of potholes.
A lot of challenges are associated with the brave move of starting your own business, some of them are easy while others are so difficult, you may have to just endure them as you move on.
Challenges you will most likely face as an entrepreneur in Nigeria
- Poor Supply of Electricity
Poor power supply is a major problem that affects every area of society. No matter the type of business you chose to do, you will need electrical power to keep it going and I can assure you that unless your business is based in bonny island, banana island, VGC, or any other affluent part of the country, electricity supply will be epileptic.
Most entrepreneurs have resorted to the use of generators for the flow if their business, and so far it is the cheapest substitute available. We hope that very soon, the poor electricity supply in Nigeria will be a thing of the past.
- Government Policy Inconsistency
In Nigeria, entrepreneurs have to constantly adjust to the ever changing policies of the government. Both federal and state governments come up with their different policies every tenure and this affects the flow of business for entrepreneurs, especially those who import their goods.
- Difficulty in Securing Loan
Most startup entrepreneurs find it cumbersome to get loans from banks and other financial institutions. Most of them have almost impossible requirements to deem you eligible, if you manage to qualify, they demand heavy collateral which a beginner cannot provide.
I advise you save up enough money before starting your business because apart from the stress of getting loans, their interest rate won’t favour your business.
- Weak Infrastructure
Though there is little improvement in cities like Lagos and Abuja, the problem of weak infrastructure in Nigeria will pose a threat to your business. The poor state of roads and railway stations make it difficult to move goods from one part of the country to another.
Because of the current economic situation in the country, people have resorted to minimize their spending and save more. This spells low sale records for business owners, I will advise that you venture into a business that provides basic need like food or clothing.
- Weak Government Support
The government hardly supports entrepreneurs, except in rare cases where the businessman gets lucky to win a government grant or runs into a politician who wants to win votes in the next general elections. You have heard about the issues being faced by the Bike Hailing services in Lagos like Gokada, ORide etc.
To make your business recognized, you need to register your brand by going through stressful processes and paying huge sums of money to the corporate affairs commission (CAC).
- Illegal Tax Connectors
We all know that it is our duty and civic responsibility to pay tax. But when there are many bodies under the same umbrella of tax collection, extorting struggling businessmen by demanding multiple tax payments in the same mouth then there is a big problem.
These illegal tax collectors sometimes go violent and fight when demanding payments and this is one big challenge affecting entrepreneurs in Nigeria.
- Startup Stigma
The Nigerian youth is celebrated when he gets a job, if it is a white collar job he is highly congratulated and respected among his peers. But when a young person decides to start a business, in the beginning he is bound to endure lack of social acceptance for a while as he is seen to be on a lower level than is mate who leaves home in the morning smartly dressed to his white collar job.
Security is an issue everywhere, and sadly, Nigeria is no exception. There is high crime rate in the country and many entrepreneurs have recorded losses or even folded up because of criminals who break into their place of business at any time of the day or night, making away with goods and hard earned money.
- Competition with Foreign Products
Nigerian made products are good but most people still prefer buying imported products even though it is more expensive. This has always been, and is still a challenge for the local entrepreneurs. Even with the “buy Naija to grow Naija” campaign launched by the government, the issue persists.
Despite the aforementioned limitations, some entrepreneurs are succeeding in their businesses in Nigeria so do not be discouraged.