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Friday, July 17, 2015

How to Spot a profitable business opportunity in Nigeria

I have received hundreds of phone calls, SMS and emails from a lot of Nigerians who want to know what kind of business they should venture into or if a particular business is profitable or not. 

Personally I refrain from answering this question because it’s like asking what kind of business can I do with little or no risk but will make maximum profit from. That kind of questions is almost impossible to answer because I know of businesses where most people are struggling to make a profit and a few others are making a lot of money. 

Look at boutique business for instance where most people are just managing to get by but some other people are making millions of naira every month from it. So should I now recommend boutique business for everybody? Another challenge again is that most businesses are suitable for certain kinds of people and not everybody so I can’t for instance say try this business or don’t do this business when I haven’t assessed your skills, experience and passion for a kind of business. However if you are enterprising enough any business opportunity is the right one once you understand the market and know how to get in. for this reason I’ll share the following tips with would be entrepreneurs looking for profitable business opportunities in Nigeria.

Tips on how to find Profitable business opportunities in Nigeria   
These tips are applicable to some business opportunities but for certain kinds of opportunity you need extra ‘eyes’ to see what most people are not seeing. However these ones are a good start, try them out.

Identify level of demand for a product/service
In a particular place there may be high demand for a product/service which could be as a result of the local demographic. For instance places that attract a lot of women are ideal ground for marketing women oriented products e.g markets, maternity centers, female hostels, churches, beauty salons etc. 
But what drives demand most times is inadequacy and availability so if you have a unique, high quality makeup kit for instance the demand for it would be higher than any other kind of makeup kit hence marketing it in the above listed places would increase demand for it.
Hint: Uniqueness, quality and inadequate supply of a product usually determine level of demand.

Who is the competition and how well off are they?
There may be 10 people selling a certain kind of product in a locality but may be only one of them is making a lot of money selling that product. His/her secret would likely be their approach to selling or delivering the product rather than using ‘jazz’ or other superstitious explanation some people could raise up. If you understand the customer’s real needs and you can find a unique and effective way of delivering that product you have identified a profitable business opportunity.

Identify the challenges in meeting demand
If there is a certain difficulty in getting a product/service to its intended target market, removing it would making it a profitable business opportunity. Is the problem with serving your customer an issue of delivery, promptness, excellent support service or price? Find a solution to this and you have found a profitable business opportunity.

What is the profit margin in the industry?
How much profit will you make on each item of a product or service you sell? If you’re making 100% profit for a shoe that sells for N1000, that means you’re buying the shoe for N500 and if you can sell 10 of those shoes every day that means you’re making N5,000 profit per day for that shoe. If you could sell 100 of those shoes a day that would be N50,000 per day. But this tip works best if there is high demand to go with high profit margin.

What is the entry requirement for that business?
If it’s very difficult to enter the business then it is a highly profitable business. The harder it is for others to come into the business coupled with high demand and high profit margin means there will be little competition and possible overhead costs which is the right opportunity to claim millions or billions of naira as the case may be.


If you have identified a business opportunity and want to approach investors to finance it for you, then getting a professionally written business plan is the way to go and you can have me write for you at a good price too. Call me: 0803 206 4106 for details.

Thursday, July 9, 2015

How to Start Commercial Pounded Yam Production for Exports

Nigerian Business Opportunity: Pounded Yam Production and Processing for Exports to Africans Abroad

Pounded Yam is one of Nigeria’s best loved staples and even Nigerians living abroad love to enjoy this meal with a variety of local soups. Nigerians abroad are not left out in fact they are the biggest fans of local Nigerian delicacies as they don’t mind spending more to enjoy our local delicacies even while abroad. Nigerians in the diaspora have a strong emotional attachment to their motherland and miss their country and all the memories they have. The main ingredient for making commercial pounded yam flour is yam which is abundant in Nigeria grown in most of the southern and middle belt states of Nigeria. Pounded Yam can be eaten with Egusi, Ogbonno, bitter leaf soup, vegetable soup, okra and many other local soups.

The Opportunity (Local and International demand)
According to the International Institute for Tropical Agriculture (IITA, Ibadan) in a 2001 food consumption survey among Nigerian households, Yam is one of the most widely consumed staple after maize, cassava and rice although one of the most expensive. It is a major source of energy in diet of Nigerian families, doesn’t spoil quickly and also occupies a very symbolic position socio-culturally among diverse ethnic groups in Nigeria with the New Yam festival serving as a standard for assessing farming seasons and crop yield. All this points to the fact that there is high demand for it locally, however the international market is where the opportunity seems even greater and there are various reasons for this such as;

·         Low competition (Only two companies as of 2014 are into this business and they haven’t adequately captured the market).
·         High demand (Over 17 million Nigerians live abroad in over 40 countries in Europe, Asia, North America and Africa). The highest demand is from Nigerians in Holland, China, India, US, UK, Spain and South Africa.
·         High profit Margin (Up to 100% profit margin from sales)

Target Market Analysis
Total Population of Nigerians in Main Market Regions 2014 estimates is put at 10,850,000. Sources for these figures are; the deputy Nigerian Ambassador to the United States at a conference for promoting investment in Nigeria mentioned that at least 5 million Nigerians live in the US in 2013. The Guardian Newspaper on 16th November 2014 reported the US, UK, South Africa, Europe and Asia as Nigeria’s leading overseas destinations with the US accounting for 31% followed by Europe at 21% and  South Africa with 5%. 
                                                                                                                                                   
Market Region
United States
United Kingdom
South Africa
China
Dubai
West Africa
Estimated Population
5,000,000+
3,000,000+
900,000+
850,000+
800,000+
300,000+
Sources: Nigerian Embassy in New York, Guardian Newspaper, Chinatravelguide.com, National Population Commission

·         With these figures we estimate the potential market size to be NB: I estimate 1$ = N200
Market
10,850,000
Total market Population
1,758,000
Monthly Spending Pool
$2,500
Average Household Monthly Income
$5,000
Disposable Income on Edibles
$250
Households
875,000
Estimated Potential Market Value
$32,200,000 (N6.44 billion) in sales

Startup Requirements
This business isn’t easy to start up because of the capital required to set it up which is N49,490,000 and would be used to acquire such things as machinery, rent warehouse, working capital, purchase delivery van and other expenses which are available in a detailed business plan.

Conclusion
This business is a cash cow and anyone looking to go into it should consider the challenges and threats which may cause the business to fail. The business is highly profitable but if you lack required marketing, operational and managerial knowledge you won’t be able to exploit this opportunity fully.


Need a comprehensive business plan on commercial pounded yam production or any other business plan for that matter? Give me a call: 0803 206 4106 and I’ll hook you up with a reliable business plan you can take to the bank.