Nigerian entrepreneurs have been advised to consider viable business ideas that will require little to zero capital to start. The advice was given by Professor Yomi Fawehinmi, a former lecturer at the University of Lagos, who spoke during the Nairametrics 2020 Economic Outlook Hangout in Lagos.
Before outlining the businesses, the former lecturer and MSME expert strongly advised potential business owners to desist from engaging in businesses they know nothing about. According to him, doing this helps to guard against risks in the course of doing such businesses.
Some business ideas for 2020
Fawehinmi said that entrepreneurs should consider starting lending businesses. This is because lending is going to be a big business in 2020 as many people would be needing a lot of money for different things. He, however, stressed the need for secured lending because that is the only way to ensure guaranteed returns and not investing in stocks.
Businesses about baby products: The Professor pointed out that the fact that Nigerians will always give birth to children presents an endless opportunity for entrepreneurs. Therefore, they should consider selling things like pampers, children’s clothes, and even baby foods. People that engage in these sort of businesses never run out of customers.
Start a health-related business: This is important because Nigerians will always have medical needs, he said. Even childbearing requires the services of health professionals. However, Professor Fawehinmi advised those interested in this line of business to consider starting drugstores or maternity homes over starting hospitals. This is because drugstores and maternities are not only more cost-effective to start, they are also easier money makers for their owners.
An education business: Education is also a good business venture potential entrepreneur should really consider in 2020. According to the Professor, this might not necessarily require building classroom blocks. Instead, it might just be all about focusing on businesses that are affiliated to education.
For example, a business that is all about reselling used textbooks will do just well in Lagos, the Professor said. He noted that when children graduate from one class to the other, the textbooks they used in their previous classes typically go to waste even though they are still valuable. It is, therefore, left for astute entrepreneurs to find a way to monetise these textbooks by collecting and reselling them to families who may prefer to buy them at lower prices.
Professional services such as barbershops and hair salons will always make for a good business, Professor Faweyinmi said. The same thing applies to the food business. However, he noted that food transportation is far more profitable in the food value chain; even more profitable than farming itself.
To explain this, he gave the example of poultry farming and egg transportation. To engage in this business, all a businessman needs is to have a car. Visit localities in Ibadan and Ogun State where poultry farming thrives and buy crates of eggs for as low as N300 each. Transport them back to Lagos and sell for N700 per crate.
The professor once again emphasised the importance of knowing a few things about any business you wish to go into. For those who may really be considering the food transportation business, he said it is necessary for them to know that there are times best for transporting certain farm produce. Live chicken is best transported at night for instance. This helps to prevent the heat from killing the animals during the hot afternoon.
The Professor also advised that entrepreneurs should find ways to solve people’s emotional problems and then monetise it. One of the best ways to do this is by starting a church. That’s right, churches are indeed a business, and Nigerians are willing to pay for the services rendered by these pastors.
Still on the need to ensure people’s emotional wellbeing and how to monetise it, Cheta Nwanze (who was also a panelist at the event) recommended that entrepreneurs should consider starting alcohol business. According to him, alcohol sells in a depressed economy because many people like to drink in order to numb their emotions. He also suggested starting viewing centres because Nigerians will always love football. Also, it is high time more entrepreneurs begin to establish alternative power businesses in a bid to solve Nigeria’s electricity challenges.
Start smart businesses
In all these, it is important for entrepreneurs to find ways of starting their businesses without necessarily incurring a lot of costs. According to Professor Fawehinmi, there are lots of smart ways to do this. He gave the example of a young entrepreneur in Palm Groove, Lagos who successfully went into the cinema business with zero CAPEX cost.
According to him, the businessman did not even need to go through the hassle of obtaining a license to operate a cinema because the owners of the cinema he uses already did that. All this entrepreneur had to do was to convince customers to come to watch films late in the night when regular cinema-goers would have gone home.
What should the government do to facilitate SMEs?
While answering this question, Professor Fawehinmi said the government should provide adequate social amenities, especially at the local levels. Focusing specifically on farmers, the Professor explained that one of the reasons foodstuff is expensive in big cities is due to the costs associated with transporting them from the farms.
Note that cost arises mostly because the roads leading from the farms are bad. Take for instance, a crate of eggs is relatively affordable within the localities in Oyo and Ogun States where they are produced.
Unfortunately, the roads there are mostly bad, making it impossible for farmers to transport eggs on bad roads, otherwise, they would spoil. To solve this problem, therefore, farmers resort to paying people to carry the eggs on their heads to the market. This inevitably increases the cost of eggs.