If there ever was a time to get involved in the export business, it’s probably now. There’s a lot more support from the government for entrepreneurs who are willing to sell the country’s products to the world. A weaker naira isn’t commonly looked upon as a good thing, but it’s a boon for anyone wishing to push things on to the international markets from here. And if you’d like to fund your export venture, there are multiple options you can choose from, if you have your papers right.
Admittedly, a lot of people still don’t think the export business is their cup of tea. They believe it’s just too expensive for them to start up, and they’re wary of the tedious bureaucratic processes they would have to get through before going global. The barriers to market entry are huge, the risks are great, and the rewards uncertain. What’s the point trying, if we could simply settle for something safer and closer to home?
It’s true that startup costs for the average export business are higher than what you’ll incur on a lot of other businesses. You may also burn up a lot of time and energy on the way to gathering documentation for your venture. But with the right information at your fingertips, these issues won’t cause you nearly as much trouble as most aspiring exporters go through. And that’s why we’ve put this article together.
Here, we’ll be running through the fundamentals of kick-starting your own export business here in Nigeria, from the point of fiddling with the idea in your head, to selling to buyers in the most promising overseas markets for your products. Let’s begin this tour.
Steps You Should Take
Learn from knowledgeable and experienced people
Seek out entrepreneurs who have been in the business for years, and find out as much relevant information as you possibly can from them. Although having one of sit down sessions with them might be a good idea, it’s actually better to build a relationship with them. This gives you a lot more; you’ll get far more insights about the trade over time, and maybe benefit from real-time advice concerning specific situations you encounter in the process of setting up and running your venture.
Seminars are also a good way to pick up new information about selling to customers in other countries. They don’t just help you build your knowledge of the products, procedures and markets you’ll be dealing with; they also put you in the midst of other would-be exporters, some of whom you could eventually partner with.
You can also look at the rules governing the export business in Nigeria, and the official requirements for getting into it.
Determine what you’ll be exporting
There are numerous potential export products you’ll be choosing from. But know this: not every exportable thing will fetch you the returns you want. Take your time, look at the materials you can sell, and evaluate your options to see which ones you can handle, given your resources, technical abilities and the available opportunities.
Just in case you’re wondering what things you can sell on the international markets, here’s a list of Nigeria’s Top Agricultural Exports, which is a rundown of some of the country’s top-grossing green exports. There’s more in this article as well: Nigeria’s Most Valuable Exports.
Find out what the most promising markets are for your product
This is the second half of the information gathering process you’re undertaking in step two above. It’s one thing to know what products are more likely to give you good profit margins. It’s quite another to tell where the demand for these items is greatest, or where they’ll be well received.
These two aspects of the trade are actually closely tied. A product isn’t the best export material simply because it is. It’s a good export because the buyers in the markets on the other side of the world are purchasing it in large quantities, or are willing to pay a premium for it. So if you want to get a complete picture of the opportunities you should be exploring, you need to know where the established and upcoming centres of global demand are (or places where Nigerian imports of your product type are sought after).
Note: various countries may have different quality requirements for imports coming into them. They could also expect you to get certification from their local regulatory agencies. You should be careful to abide by these requirements.
Decide how you’ll obtain your export products
A large fraction of Nigerian exporters don’t make the items they sell. It’s common practice to get these things from local producers who don’t have access to the international markets themselves. A number of businesses take on this role, exporting a part or all of their products. These range from large-scale farmers, to manufacturers. But if you’re running a business which simply exports locally made things (or imported things for that matter), it’s not necessary for you to make the things you’ll sell.
Get your business registered
Secure a business name for your enterprise and have it registered with the Corporate Affairs Commission (CAC). They’ll issue you with a Certificate of Incorporation when you’ve completed the registration process. Get a Tax Identification Number (TIN) from the Federal Inland Revenue Service (FIRS).
Because you’re going to be exporting things, you need to register with the Nigerian Export Promotion Council (NEPC) as well. They’ll grant you the license to ship your goods out for sale beyond the shores of the country.
We have hinted at the potentially large amounts of money you’ll be spending in the process of exporting products. Now, we’ll look at some possible ways to plug the funding gap you may encounter.
Your friends and family could lend you money, or you could take a loan from a bank. Besides these funding sources, you may also apply for low-interest funding from such government-run institutions as the Nigerian Export-Import Bank (NEXIM), and the Nigerian Export Promotion Council (NEPC).
This should go well if you’ve taken the previous steps properly.
There’s one more thing to note. You should find a reliable agent in the country you’ll be exporting to, who’ll help with distributing your products over there. This could be a challenge, but it’s doable if you devote some time and effort to locating them.