How To Get Funding To Start Up Your Business Idea In Nigeria: 5 Best Ways (A Complete Guide To Raising Capital For Your Business)
Access to capital is undeniably the biggest challenge of African entrepreneurs. Without knowing how to get funding to start up your business idea, your idea may remain just an idea for a very long time if not forever.
It is baffling the number of great ideas that have ended up being discarded or thrown away due to lack of start-up capital.
In this post today, I will be showing you how to get funding to start up your business idea in Nigeria, Africa or any other part of the world. Best proven methods.
Although not all the methods I revealed in this post are easy to use, but they are definitely possible and worth giving a trial. Keep reading!
Best Proven Ways To Raise Capital For Your Business Idea
1. GRANTS
Grants are usually financial assistance (money) given to individuals or groups by the government or other organizations to be used to achieve a particular purpose.
Every year in Nigeria, Africa and other places, several organizations and governments give out opportunities for small businesses or young entrepreneurs to receive seed capital or funding to start up their business or strengthen an already existing one.
The amount of money given out to individuals or businesses in the form of Grants ranges from US$500 to US$50,000 or more.
For instance, the Tony Elumelu Foundation, through the popular entrepreneurship programme, Tony Elumelu Entrepreneurship Programme (TEEP) which is held every year, supports thousands of young entrepreneurs from Africa with seed capital and mentoring to start or grow their businesses.
There are also several other organizations -NGOs especially- that are currently supporting young entrepreneurs in Nigeria, Africa and the diaspora with grants to start or grow their businesses. You can find out more about this organization and how to get funding to start up your business idea here on the Inspire Wealth Blog. Just go through our Grants and Funding Section.
2. BUSINESS PARTNERSHIPS
Business Partnership here according to Investopedia, is ”a formal arrangement in which two or more parties cooperate to manage and operate a business. Various partnership arrangements are possible in which all partners might share liabilities and profits equally or some partners may have limited liability.”
To further break it down, Partnership is simply the coming together of two or more individuals or organizations to contribute ideas, resources (money, properties), and time to operate a business for the purpose of making profits, which will be later shared between parties either equally or as agreed.
Every year in Africa, investors look for businesses or individuals with promising business ideas to establish a business partnership with.
Some of the best ways to convince people to partner with your business include a well-detailed business plan, product sample and visuals (videos).
3. CROWDFUNDING
Instead of cracking your head for a business plan to take to different banks and financial institutions for loans, crowdfunding platforms allow an entrepreneur to present his or her idea to the world and provide investors of all sizes an opportunity to participate in growing the business.
In the last few years, crowdfunding has helped numerous people in Africa and all over the world start their businesses. One of such example is Babajide Ipaye. A Nigerian-born entrepreneur who in 2015, successfully raised £17,871 on Kickstarter, the world’s largest crowdfunding platform.
Some of the top 10 crowdfunding platforms that you can get funding to start up your business idea includes Kickstarter, Indiegogo, and CircleUp.
4. FAMILY AND FRIENDS
If there is one set of people who can easily believe in your business ideas and be willing to support you so you can either start or grow your already existing business, it is family and friends.
In Nigeria and several African countries, family members see it as a responsibility to support and contribute towards the success of each other.
This is why the success story of African billionaire entrepreneurs like Aliko Dangote and Cletus Ibeto cannot be complete without mentioning the significant roles their family members played to place them where they are in society today.
For Aliko Dangote, it was a loan from his rich grandfather that helped him start and grow his business to the point it is today. While for Cletus Ibeto, it was the money realized from the sale of a round neck suit and a leather bag, which one of his elder brothers gave him coupled with the sale of a packet of APC Tablets he picked up at an evacuated hospital, that helped set him on the path of business success.
When it comes to how to get funding to start up your business idea in Nigeria, Africa or any other place, family and friends is really a great option to consider.
5. STARTUP LOANS
In Africa, certain financial institutions -especially microfinance banks- often give out loans to support startups in the region. Though not as easy as the first 4 mentioned above, startup loans is certainly one of the best ways to get funding to start up your business ideas or grow your already existing one.
These loans often come with little or no collateral requirement and are given to individuals or groups with clearly defined business plans.
Example of a financial institution that supports startups this way in Nigeria is the microfinance bank, LAPO microfinance.
LAPO microfinance bank supports the rise of business enterprises in the region by given out loans without collateral to individuals or groups. Although mostly in groups, several people has raised capital for their business this way.
You can do the same, too.
In Summary
It is a known fact that Africa is filled with great business ideas that are never implemented for a lot reasons. The commonest being a lack of capital to start or support existing businesses.
The above-mentioned ways are some of the best ways to get funding to start up your business idea in the region or any other place, not the only ones.
Of course, they are not all easy, but they are certainly possible ways to start your business.
If you know any other way, you might want to add that in the comment section and let other readers benefit from it.
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