Research Report: 4th Quarter 2024 by Centre for Entrepreneurial Research and Development, Igbesa, Ogun State, Nigeria (Subsidiary of David Richard Associates)
The fact that everyone is complaining about the galloping prices of everything in Nigeria today does not mean that starting a new business or working on that business idea or even diversifying into a new market should be a taboo. People may be complaining about hard times due to high prices but we all are still eating, we are still moving about and in some areas we still have traffic jams. Children are still going to school and life has not stopped. Actually, take the banking and finance industry for an example, these days for some businesses are days of criminal profit. It has never been so good for some people.
This means that now is the time to dust up that pet business idea that you have been nursing for a long time. It is time you started work on it and take it to the market. This is the time that precedes a boom in the market place.
My job here is to unearth the business ideas some wise Nigerians have been working on to bring into the market in the past one and a half years. The last eighteen months have been very challenging times in the history of Nigeria, talking about four months before the last administration handed over and the last fourteen months that the new administration took over. Prices have more than quadrupled in some cases, but that did not stop people from working on their business ideas to bring them to the market.
In this report we present a list of ideas that people brought to our firm, a business development practice, for us to work on. Actually as this report was being put together, somebody just commissioned a brief on a business idea in the sector that is also doing very well in Nigeria today.
Methodology
The methodology of this research report is very simple. We captured the list of clients who brought business development briefs to us in the past eighteen months, particularly business plan writing assignments. We broke the list down according to the sector each of the projects belonged to. The first category of classification was done using the major three sectoral classifications, namely Primary – Raw materials, i.e., Agriculture, Secondary – Manufacturing, i.e., all Processing and Production and Tertiary – Services, i.e., all Services including education and professional services. The second category of classification was done using the industry sectoral classification as laid out by the Nigerian Stock Exchange in its classification of equities – There are eleven of them. There we have Agriculture, Conglomerates, Construction/Real Estate, Consumer Goods, Financial Services, Healthcare, ICT, Industrial Goods, Natural Resources, Oil and Gas and Services.
We used the briefs brought to us by clients in the past eighteen months for this report because people usually start to work on the implementation of business ideas that they have identified as viable in the environment after having done extensive review of opportunities open to them. We hardly specify or recommend to our clients business ideas that they should focus on. In addition, they paid money for us to work on the business plans and no one will put his or her hard earned money to work on an idea that he has not seriously considered as being fairly viable.
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1. By Major Sectoral Classification
(In line with Global Sectoral Classification Standard)
2. By Industry Sectoral Classification
(In line with Nigerian Stock Exchange Classification of Equities)
Comment:
Assuming our clients were right in their choice, then the best way to go in present day Nigeria is to go for a business idea in the services sector. Services have extremely low startup capital requirements. A service for example, a fashion design business can be started in the comfort of your living apartment. In addition, services have good return on investment as you can easily raise your prices in line with the frequent price hikes that the present day system has thrown up. Also services have short gestation period. You can dream up an idea today and within the next few days, you are already in business earning cool cash. However, services also have their own downsides. Maybe that is why also a fairly high percentage (35.3%) also went for manufacturing despite its high capital requirement. For a manufacturing business, you can store value in your equipment which will also appreciate with time in these days of galloping inflation. Manufacturing also gives entrepreneurs with great guts the opportunity to go after market share as a major competitive strategy for those who are ready to wait for a fairly long time to recover their investment.
Nobody came to us that wanted to go into basic/primary businesses like farming, mining and things that are raw materials or inputs for other businesses. What does this tell us? Maybe Nigeria is going the way of developed economies where people are flocking to high value investments where return on investment is high and the power of the brain holds sway rather than physical efforts. Services and manufacturing (both light and heavy) are at the positive end of the value spectrum and price determination is not as fixated as what we have in basic things like raw materials.
The bottom line is that people are taking steps fast and if you are still at a loss on what to invest in, you can be guided by what our clients did in the past eighteen months.
Owolabi (FIMC), Fellow of the Institute of Management Consultants, is the Executive Director of Centre of Entrepreneurial Research and Development based in Igbesa, Atan-Agbara Road, a suburb of greater Lagos, in the vicinity of Crawford University. The organization has had the opportunity to execute landmark business development (business plan preparation and conduct of feasibility studies) and market research briefs for organizations both within and outside Nigeria. Kola Owolabi can be reached by phone or WhatsApp through 08023203198.
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