How to raise money for business in Nigeria? You’re not alone. In 2021 sufficient capital needed to stay in business is often unavailable to SME’s.
What is the hope of young people to raise money to start a business in Nigeria?
What is the alternative when there is no access to government grants or loans?
These are questions that require realistic answers.
Right from time immemorial, the biggest hurdle for anyone who wants to start and stay in business is capital. However, other than grants, there are other ways to raise money to start your own business in Nigeria.
In this post, we’ll not only be talking about alternatives to the government or private grants for businesses but also how to go about them in the simplest way possible.
So what are those sources?
How To Raise Money For Business in Nigeria?
Lack of funds turns out to be the common reasons why new businesses fail during the first year of operation.
However, with this list of ways to raise funds for your business in Nigeria, you’d be able to focus on other things that matter.
- Save your way out.
- Grant and angel investors.
- Donation from family and friends.
- Get a loan from the bank.
1. Save Your Way Out
Provided your business is not in an industry that is capital intensive, this approach is always the way to go. Yeah, it takes time, but it’s feasible if you follow it diligently and consistently.
For many, this approach is like a mirage that can never be catch up with. However, with a less extravagant lifestyle or habit of trying to impress others, you can do it.
Where will the savings come from?
Luckily, the internet and increase in demand for remote workers have to lead to demand for skilled workers with digital skills like SEO, graphics design, video editing, copywriting e.t.c
And with perfection in any of these skills, you can offer your service on platforms like Fiverr and Upwork.
Other than offering digital skills remotely, one of the numerous ways to get money to save is working 9-5, save a percentage of your monthly income till you get the required capital.
For someone who finds it difficult to save money, platforms like the Piggyvest app can be used to save your money. Piggyvest is a secure online saving platform that helps individuals save their way to financial freedom.
There are many success stories of crowdfunding in Nigeria. And with the right pitch and product or services, you can be one of those who raise money for their business with crowdfunding in Nigeria.
Other than getting funding for your business idea, crowdfunding allows you to network with people of like mind.
To attain success with crowdfunding in Nigeria, make sure your pitch video shows the value of your service or product, why you should be supported, and the problem you are solving.
Do you have a feasible business idea, but have no access to capital? A partnership might be the way to go.
Instead of spending days or months saving little funds, you can partner with friends, family, or colleagues who have funds, talk out the sharing percentage, and get it legalized.
Although there are cases of business failure due to one or both partners pulling out, there are cases of successful business partnerships.
4. Donation from Family and Friends
Contributions from family and friends is another way to raise money for your business in the country. We have entrepreneurs such as Bethlehem Alemu from Ethiopia, who started her dream business in the year 2004 with $ 10,000. The funds were raised from family and friends.
Talk to your family and friends about that your business idea, you might be lucky. Yes, the process won’t be an easy one. You have higher chances when you have results to show or have good records/relations with them over the years.
5. Grant or Angel Investors
If all approach seems not to work, getting grants from associations and government is an ideal way to raise money to start a business in Nigeria. Grants are non-refundable funds provided to the business owners.
Along with taking grants from the government and associations, is the seeking of funds from angel investors. Angel investors are individuals in society with funds to invest in a business and in return for ownership shares or convertible debt.
It’s worth noting that angel investors are not limited to strangers, they can be anything from your lecturer in school to friends, the rich man in your community, and so on.
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6. Get a Loan From Bank
Yes, our banks are known for saying no to small business owners without collateral in Nigeria.
However, you can still get a loan from banks in Nigeria, especially if your business is low risk. And you can as well look out for banks that prioritize giving loans to small business owners.
Now that you know the different ways to raise money for business in Nigeria, the next thing to do is apply what you have read. Note that there are days your proposal will get rejected, but do not give up.
Before you go on with applying what you’ve read, do you have any contributions to make on How To Raise Money For Business In Nigeria? Please leave feedback in the comment section and don’t forget to share with friends and family.
- This article is submitted by a guest author.