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Saturday, November 28, 2009

How to start a retail store in Lagos Nigeria

In Lagos Nigeria, retail stores are so numerous one could say they number like the stars, but only a few of them stand out and are worth the patronage they receive. My observation of most retail stores in Lagos indicate that majority of them were set up for strictly subsistence purposes and not for profit making. Here is what I mean a civil servant in the Lagos state civil service who earns barely enough to survive might consider setting up a retail store to meet her living expenses as a result of this she is less likely to deploy methods that would ensure growth of the retail store since she is satisfied with earning just enough to meet her living expenses.
For the few retail stores that stand out from the pack, they are very business like in their mode of operation. The need to keep the customer happy and satisfied supersedes every other consideration and naturally they tend to enjoy massive patronage from both loyal customers and new customers who get to patronize them for the first or second time.

In Lagos Nigeria, retail stores deal in all sorts of items but majority of them specialize in selling consumer items. Hence major retail stores like Shoprite, The Game stores, Pack ‘n’ shop sell a broad range of consumer products. However some specialize in single line products like Talk 2 me, Luomo, The ballers and a host of others which sells clothing particularly designer wears. Some like rough n tumble sell clothing for younger age groups (toddlers and pre teens). Some retail outlets sell one line consumer products such as consumer electronics (laptops, ipods, flat screen televisions, digital satellite dishes and decoders among others).
Retail stores can be set up anywhere in Lagos Nigeria, but certain factors must not be overlooked when choosing where and when to set up a retail store. Here are some of the factors to consider when setting up a retail business in Lagos Nigeria;

1. Location

The place, neighbourhood or community you choose to set up a retail store can easily be termed the most important factor to consider when setting up one. If you intend to sell products that appeal to middle class families, naturally you have to locate your business in middle class neighbourhoods such as Illupeju, GRA Ikeja and Ogudu, parts of Surulere and so on. The same premise applies to upper class and lower class folks.

2. Demographics and population of market segment

The market segment you select for your retail business is a very important factor to consider. Most retail businesses serve a broad range of market segments often times because the owners never considered the possibility of specializing in a small segment not only to beat competition but to also secure slightly higher profit margins. Businesses like rough n tumble and wranglers which serve a very tiny market segment (children’s clothing and jeans respectively) are more likely to be profitable than others that fall within the same broad range of products that majority of retail stores in Lagos Nigeria are already doing.

3. Cost of living and level of disposable income

People in certain neighbourhoods and places within the Lagos metropolis enjoy cheaper cost of living when compared to most parts these places are usually home to low income earners as a result things are generally cheaper. Setting up a retail store in such a place would require large turnovers based on small profit margins. The reverse is the case in neighbourhoods with high income earners.

4. Supplies and suppliers

Where you receive your supplies from and how close your retail store is to your suppliers is a very important factor to also note. However not all

5. Branding

Using effective branding makes a lot of sense in this business, imagine where a lack of effective brand awareness is prevalent and you happen to situate your business in a very busy commercial area with several other competing stores, the result will certainly be catastrophic over time. Some clothing retail stores use slogans like ‘we make your clothes speak your language’ or ‘the best products at the best prices’ among others.

6. service delivery

This business is service based as a result the better you are at offering customers what they want over your competitors the more loyal customers you tend to build over time.

Conclusion

Retail businesses are not in short supply in Lagos Nigeria, however they are very few that command market attention and those few are by no means ordinary owing to their use of efficient methods at getting their customers satisfied and beating the competition to the game of reducing costs to the barest minimum.

Monday, November 16, 2009

Starting a business with little or no capital in Lagos Nigeria

By Onwueme Paul

One of the very much talked about topics on the business section of nairaland (Nigeria’s largest internet community) is starting a business with little or no money. Most of the people who post these topics or make comments are people with little capital but who wish to have a commercial venture they can call theirs.
From titles such as “what business can I start with N 10,000” to others such as “I have N 200,000 what can I invest it in” people are searching for micro businesses
(sme businesses) they can start but with great potential for profit.

While it is good to start a business small and grow it so that it becomes profitable eventually, setting unrealistic goals or having grandiose expectations of small businesses will certainly defeat the purpose of setting one up in the first place. A business that costs say N 100,000 to set up would have limited working capital which in turn means limited potential for profit and growth hence eventually external funds would be needed to grow the business. Expecting to make N 50,000 a month as profit starting with the first month is a bit unrealistic although it is possible. If however you choose to set up a micro business with little or no funds here are a few things to note;

1. Businesses take time to mature

When going into business, consider that a time frame is required for the business to build a customer base. Also profit comes only after customers are satisfied and desire to get more in other words your business will mature only after customers are happy patronizing you and recommend you in turn to other people. Typically many businesses take 2 or more years before they can be called mature.

2. Businesses need capable hands to run them

Never make the mistake of employing the wrong hands to manage your business. If you intend to run your micro enterprise as a part time venture, get a trusted hand to man it while you retain your job or continue with your studies as the case may be. The major cause of business failure is employing the wrong hands to man your business.

3. Business capital must be different from personal funds

Agreed that your funds were initially used to setup the business but the moment the business takes off consider the funds you used in setting it up as business capital and not your personal funds. That means if you are broke and urgently need money for personal use, you cannot sell off part of your inventory or use your working capital to meet those needs. Your decision to go into business is strictly for business unless if you have already decided to use part of the business profit as an additional source of income, you do not have any personal funds in that micro business you call yours.

4. It is possible to setup a business without funds but appreciable human capital is necessary

If you have skills, work experience, integrity, connections and knowledge of how to setup and run a micro business then you do not necessarily need money to own one. The aforementioned are capital in lieu of money because you could partner with someone who has the funds but lacks human capital for your desired business or simply approach a bank for a loan but with a sortie to guarantee you against default. Some business such as service based can run without capital (estate agency, commercial typing etc)

5. Have goals for your business

Every business without a goal is simply waiting for doomsday. All businesses including micro businesses need goals to run smoothly. Goals like servicing a minimum number of clients within a stated period or surpassing a previous target performance or industry average are goals. Some companies embody their corporate goals into vision and mission statements. You should do the same.

Monday, November 2, 2009

7 Inexpensive ways to market your products and services in Nigeria

I have for a while been pondering on why a lot of Nigerian businessmen raise objections to marketing their products and services online even when there is clearly a market that can be reached by that medium. The funny thing about it all is that internet marketing is inexpensive and can serve longer and more useful functions than conventional media of advertising especially radio, television and print media. A number of businesses however have come to realize the power of internet marketing and are hence embracing it as part of their overall market strategy.
Some of the preconceived notions about internet marketing are that it favours big brands especially those of multinational companies and financial institutions who serve a global market including tourists and business travellers. Hence one expects telecommunications companies, banks, insurance companies, hotels and a host of other businesses with international clients to be active participants of internet marketing.

However, reality shows that things are not quite that way as a number of first time customers can also be attracted via the internet especially from a company’s website what with the use of search engine friendly techniques like SEO and so on. With these businesses can market their products and services inexpensively. The Nigerian internet community is estimated at over 1,200,000 that is a very large internet presence from which serious businesses can market to.

Some of the different ways you can market your products and services inexpensively include;

1. Internet forums

Internet forums provide one with the functionality of real life social interactions. Getting to measure the pulse of your customers by viewing and sampling their opinions from online is practically the same thing as reaching out to them in real life the only difference is that there are fewer in number than what obtains in real life. In Nigeria the most popular internet forum is nairaland.com its hosts many segments ranging from real estate to autos to vacancies and so on. Businesses can market themselves using threads to start topics affecting their niche.

2. Blogs

With a blog you can leverage on the power of SEO to rank your dedicated pages high on google’s or yahoo’s first or second result pages for certain keywords relating to your niche. You could also use the power of networking with your blogs to promote your products and services.

3. Classified listings

Like craigslist, nairalist.com a sister site of nairaland.com is a suitable means of advertising mostly vacancies and special services.

4. Article marketing

Writing promotional articles that provide useful information to customers on article directories is another inexpensive way to market your product and service. The added benefit comes from the fact that at the end of each article you submit you have a link that points to your website or blog thus attracting your niche.

5. Corporate website

A company’s corporate website can also be an inexpensive means of advertising
products and services. With announcements made about product changes and features among other useful information you can make a suitable presence online with your website especially if it has been optimized for search engines.

6. Wikis


The most popular wiki in the world is en.wikipedia.org. A wiki is a social networking site that allows visitors edit its contents. With wikis you can start or contribute to topics that discuss important issues affecting your niche

7. Social media and networking sites

Social networking sites like linkedln, facebook, myspace and twitter are also suitable means of carrying out affordable advertising. You could join existing networks or create one of your own and from them project the key benefits of your product, service or other area of your business.

Do you have any thing you wish to contribute? Say it here as a comment;