Simeon Sunday – Adahzionblog
High-paying businesses that can be started in 2022 with little capital and the factors affecting them. Types of business organizations and how they apply to every business.
Small Business Definition
Businesses are defined as “small” in terms of being able to apply for government support and qualify for favorable tax policy varies depending on the country and industry.
A small business is often privately owned, does not employ many people, and has a low volume of sales. When you are a small business, bank charges really hurt and small businesses find it difficult to get loans from banks.
Now that you have known what a small business is, it is also important that you know and understands the main types of business organizations and the factors surrounding them.
A business organization is the single most vital choice needed to make in regards to the type of business you want ot start because the type of small or big business you choose will affect many factors which will decide the future of your small business.
Many rushes into establishing a particular type of business without knowing the necessary rules and factors surrounding affecting the business line, It is necessary to know the pros and cons of each type of business.
Types Of Business Organization.
There are 4 types of business organization and it is important that an entrepreneur becomes familiar without all of them.
- 1. Sole Proprietorship
- 2. Partnership
- 3. Corporation
- 4. Limimted Liability Company or LLC.
1. Sole Proprietorship
The definition of a sole proprietorship is a business owned by one person, hence the word sole, meaning one and only.
One advantage of a sole proprietorship is that the owner makes all the decisions. The owner is not obligated to confer with anyone when it comes to deciding the location of the business, who to hire, what to sell, etc. Another advantage to an owner of a sole proprietorship is that he or she is the recipient of all profits generated by the business. The owner is not legally bound to share the profits with anyone else.
While there are benefits to being a sole proprietorship, there are also drawbacks. One huge drawback is if the owner is sued, the owner is held personally liable. Personal liability means if the person or entity wins the lawsuit, the court can make the owner sell business and personal assets to satisfy the debt. Another disadvantage of this type of business organization is that when the owner dies, the business will become defunct or terminate.
A partnership constitutes a formal agreement between two or more individuals who agree to run a business together. It can also be established between two or more businesses or between businesses and individuals. The partnership agreement clearly states the amount of authority, potential profits, and liabilities that each partner is due. Although the partners share benefits and responsibilities, one partner’s choices can potentially affect the entire company.
There are two types of partnerships—general and limited. In a general partnership, all partners assume liability for the company’s potential losses, debt, and other obligations. In a limited partnership, some of the partners are solely investors who have no managerial control or liability. A limited partnership contains both general partners and limited partners.
Corporations are companies that have been authorized to act as single entities. When a company’s owner incorporates their business, they essentially separate their personal liability from that of the company. Corporations have many of the rights and responsibilities that individuals enjoy, such as owning assets, hiring employees, and paying taxes. However, they are subject to state regulation, with a state-imposed board structure and taxation of both business and personal revenue.
Owning a corporation is typically more flexible than other types of business, as you can transfer it in the form of stock. However, the high number of rules and regulations that a corporation must follow typically means you may have to pay higher costs for accountants and attorneys compared to other types of businesses.
There are three kinds of corporations:
- C corporations: These corporations are taxed as business entities, and the owners’ received profits are then taxed again individually.
- S corporations: Deriving from “small business corporation,” this type of business organization divides income and losses among its shareholders. This means that the corporation itself does not pay any income taxes, making it an effective way of avoiding double taxation.
- Nonprofit corporations: These corporations are exempt from all taxes, but they must operate without generating a profit. A nonprofit corporation can achieve this if it invests all of its generated cash flow for expansion and future operations. This is a type of business organization that’s most often used by charitable entities.
4. Limited Liability Company
As with corporations, limited liability companies separate the owners’ liability from that of the company. They can be taxed either as corporations or as partnerships, and they can be owned by many different types of business entities, such as trusts, corporations, individuals, and other LLCs.
Although similar in structure to S corporations, LLCs do not put their shareholders’ personal belongings at risk, separating the personal liabilities from the ones that the company generates. Also, as opposed to S corporations, there are fewer rules and regulations for the company to follow, which reduces the time and money spent with accountants and attorneys.
5. Coorporative Society
A cooperative is a business that is operated solely for the benefit of those who own it and use its services. This implies that the business distributes its generated earnings to its members, also called user-owners. The company’s members typically vote to elect a board of directors to make any necessary managerial decisions.
Now Let’s Look At Business You Can With Little Capital
1. Real Estate Bussiness
By finding properties (Land and Houses for commercial and residential purposes) for prospective clients, you perform a valuable service to both owners of properties and prospective tenants.
All you need to do is to advertise that you have listings available for houses, apartments, flats, rooms, offices, etc. You can either charge a one-time fee for finding accommodations or work on a commission. In this line of business, capital or professional qualification is not really required as a start-up, you can belong to groups in the real estate NICHE or get briefs from family and friends, just have the right information and you will always smile at the bank. In addition, you can also be a property manager to your clients and earn a steady income from management fees.
The real estate business/industry has made many people millionaires and billionaires in Nigeria and in the world at large. This business requires no school certificate or Doctorate degree to start, you just have to be good in communication skills and marketing skills. Using the right marketing media to advertise properties, convincing prospective clients on why they need to buy the property, etc. The real estate company pays you huge sales commissions for closing a sales deal, and these commissions also come with attractive incentives like Car, House, Land, Flights to a Foreign Country, etc.
Sign up with “Overhplus Properties Limited” to become their real estate sales agent
2. Food/Restaurant Business
No matter how poor people maybe, food still remains the number one basic necessities of life before clothing and shelter. If you can do it right, it’s one of the surest ways to cross the poverty line.
With a capital between N10K – N50k, you should be making a residual income from it.
3. Fashion and Tailoring Business
From time immemorial fashion business has been dynamic and ever-present. From Paris to New York, Milan to Lagos, Beijing to Joburg, fashion statements defy national/ethnic boundaries. Different occasions demand special outfits, one can easily take advantage of the trend in fashion consciousness of the people to earn a decent living. You can start with as little as N30K-N100K.
4. Laudry / Ironing /Clothes Washing Service
Everyone has dirty clothes for laundry and ironing, but many working-class and career individuals do not have the time to tend to their laundry themselves because of the busy schedule of work or business, this is where you would come in and make money by doing a professional laundry service, especially in areas where power supply is erratic. If your backyard/compound is spacious enough to accommodate washer-men and pressers who will do justice to the clothes, hire them and start making money, This business could just be for you if you have a knack for cleanliness and corporate cleaning services. With a capital between N20K – N100K this business could turn you into a millionaire over a period of time.
5. Making and Selling of Handmade Beads / Jewelries
Homemade costume jewelry sales, sell directly to jewelry outlets, gift shops, hairdressers shops, clothes boutiques, and by advertising your products on websites that allow for product advertising and sales like Adahzionblog.com, etc. It is possible to start with limited capital of N5K- N20k.
You can advertise your business, products, and services on ‘ADAHZIONBLOG’.
Adahzionblog is a news and media website based in Nigeria with over 10k visitors per day. They have an online advertising webpage service that allows business owners to advertise and sell their products on their websites. To know more about their advertising program, click here
Adahzionblog also has an online e-commerce store where sellers can sell their products online and boost their marketing strategies.
6. Fish Farming
If you have been contemplating on a small business and haven’t heard about fish farming, then you are missing something. Over the years, quite a few people have made fortunes from fish farming; as the population is swelling and protein needs are far outstripping the available supply, fish meal is always a winner if done well. Fish farming is a sure bet business if you put the right structures in place.
More and more people like fish due to its low cholesterol protein, All you need do is to get a space, buy or construct tanks, buy fingerlings for between N10 to N20 and feed them for 4 to 6 months, then sell from between N1500 to N2000 depending on weight and size. But you need to have a basic knowledge of fish farming to start this.
Previous experience and formal training may not be needed to venture into this line of business as there are ready tools available in the market to perform different operations such as editing, printing, framing, styling, Photoshop software, etc. Making money as a photographer can be done in a number of different ways.
You can specialize in one area, the most common being weddings and social functions. All you require is a professional camera, a mobile printing device, and your call cards, visit any social function dressed as corporate as possible so as not to be bounced by the security guys, take one or two snapshots of guests most especially ladies, quickly find a safe place to plug your printer and extra batteries for charging, before the show wound up, look for people you have snapped and give to them at N100 or more, you can make as much as N20K-N50K at a particular event.
There are other niches you can explore for photography: portraits of people and their pets, families, and homes; photographs of holiday events, birthday parties or model photoshoots, filmmakers, students, religious gatherings, etc. The possibilities are endless and the capital to invest is not cut-throat.
7. Graphics Design
One major landmark about the computer is, you could probably become a professional in any field by accident. Graphic design is one of the “Experts by Accident” jobs am talking about. At least with the little time I have spent on the computer in the last 2 years, I can create a simple design for anything I want to do. Despite the proliferation of the internet, print media is still relevant to the foreseeable future! Fliers, newsletters, magazines, information sheets, letters, and advertisements are just a few of the type of print media that business outfit hires Graphic Artist to create for them.
Websites and online advertising need graphic design services as well. Even if your expertise is only in design, offer the works for potential clients, friends, and small businesses. So many software abound in the market to help you through. I have made lots of money working as a graphic designer for clients, designing wedding invitation cards, business cards, banners, flyers, posters, I.D cards, etc.
8. Perfume Oil Business
Selling perfume oils is another fantastic business idea that you can start for 10,000 Naira or less in Nigeria. Many Nigerians like to smell well with nice scents and perfumes from top designers around the world. But since a majority of people cannot afford high-end perfumes, they turn to perfume oils that offer the same scents.
You can take advantage of this market and make good money in the process.
How To Start Perfume Oil Business
This is how you can start a perfume oil business with less than 10k in Nigeria:
Step 1: Search for a perfume oil wholesaler
Step 2: Negotiate to buy a bundle of perfume oil (one or two dozens)
With a simple search on Instagram, I found a perfume oil wholesaler who was looking to sell me 15 pieces of 1ml perfume oil bottles at 6,750. That is a great deal to start with.
Step 3: Resell the perfume at retail price and make your profit
After buying the perfumes, the next step is to resell and make your profit. So, let’s imagine that I go ahead to buy the 15 pieces of 1ml bottles at 6,750 Naira, then I resell each bottle at 1,000 Naira, I will be making a total sales of 15,000 Naira. That leaves me with a profit of 8,250 Naira- not a bad deal at all!
9. Selling of Fairly Used Clothes
Another business that you can start with a little capital is small-scale second-hand clothes sales. Here’s how the business works:
You go to a local market where they sell second-hand clothes. With your startup capital of 10,000 Naira, you can buy about 8-10 first-grade clothes. After that, you can market to your family and friends, then sell the clothes anywhere between 1,500 Naira to 2,500 Naira depending on how good the clothes look.
To make your business stand out, you should wash, starch, iron, and package the clothes to raise their value when you are selling. With this simple business, you could make as much as 5,000 Naira profit for every stock you buy.
10. Telecommunication Data Reselling
This is a great business to start because you will always get customers. The cost of data subscriptions has been an issue for many Nigerians for ages. Due to this fact, Nigerians are always open to cheaper data services. There are many data selling services that offer cheaper data subscriptions, but many are oblivious to them.
Therefore, you can take advantage of that fact and become a cheap data reseller to your friends and close network. All you have to do is register as an agent on one of the networks, fund your account with your 10,000 Naira startup fund, and begin to advertise your business. Most of these networks will sell at a cheaper price to you as an agent so that you can resell and make a profit. And in any case, you can add 50 Naira to the cost of data, and still be selling at a ridiculously cheaper price than what the official service providers sell.
To start selling cheap MTN, AIRTEL, GLO, and ETISALAT data for low as 300 Naira for 1GB on MTN network and other networks click here
11. Branding Business
A fantastic business that you can start with 10k in Nigeria is a branding business. The branding business in Nigeria involves you getting clients that want to print and brand their products, then helping them execute it.
Many businesses often brand items such as mugs, notebooks, fez caps, t-shirts, and the like. Imagine that you get one of those contracts and execute them- you will be making a handsome profit from that deal.
And, do you know what is more amazing? You do not need to know how to print yourself to start this business. All you need to do is to get trustworthy contacts at printing hubs then source for jobs and get them to help you fulfill those jobs.
To be successful with this business, please make sure that you have a price list from your printing partners, then, add a small percentage as your gain before sharing the price with your clients.
12. Small Chops
Small chops business is a popular food business idea that can fetch you a responsible income if done properly. Nigerians generally like to consume small chops at events, but do you know that you can sell small chops on a regular basis and still make considerable income?
What Do You Need To Start A Small Chops Business?
- Frying pans
- Egg mixer
- Flat wooden spatula
- Measuring cups
- Turning stick
Ordinarily, you will already have most of the equipment that you need to start a small chops business.
Most of the equipment you will need to start a small chops business are things that you already have in your kitchen. So, the idea is to start small and scale as demand gets bigger. Therefore, you can use the full startup cost of 15,000 Naira or less to get the materials you need to make your small chops.
Here is a list of the popular small chops that sell well in Nigeria:
- Mini Cakes
- Banana Puff Puff
- Mini Grilled chicken
- Asun (smoked spicy goat meat)
- Mini Puff Puff
- Gizdodo/Dodo Gizzards (Plantain & Gizzards)
- Meat stuffed yam (potato) balls
- Mini Sausage Rolls
- Peppered Ponmo (Cow leather)
- Peppered snails
- Spring rolls
- Battered Plantain
- Mini Donuts
Factors To Consider Before Starting Any Business
1. Cost Of Formation and Financing
The cost of setting up a company can become a challenge early on, so it’s important to be prepared. Choosing a business type that can accommodate both your initial budget and future growth objectives is essential when setting your business up for success.
While you may hear of
No business in the world can run without money. Depending on the type of business you are starting and the initial cost of that you will have to pay up for, you will know what kind of capital you would need to start your business. Whatever steps you take to finance your business, you will have to make sure you have the required funds to take you through the startup phase.
One of the most important things needed to start a business is a good location. If yours is a retail business you will have to look for a well-populated area that is easily accessible by customers.
Make sure the location falls within your budget and gives way for future expansion. A good location would be the one that complements your business in the best way.
3. Tax Policies
A business taxation level and structure can vary depending on your chosen business type. Knowing the available types of businesses allows you to choose the one that works best for your business and yourself.
4. Knowlege About the Business
Having knowledge about the business you want to venture into is very important. Never go into anything you know nothing about in order to avoid future regrets and breakdown of the business. Your knowledge of a business is one important factor to consider when starting a business.
You need to have experience in anything you set out to do especially when it involves business and making money.
You need to make research, you need to ask questions or seek mentorship from those who have experience in the business. Knowledge is power! The amount of knowledge you have about a business will determine your success and failures in the business and how long it will last.
5. Target Audience
It is important to consider the category of people (customers) who are in search or in need of the product and service your business will offer before starting up. You need to understand the time the product will be in hot demand, how people need it, the age category of those needing it. Consider the age category, is it for children, adults, or the general public.
Your target audience is your potential customers or clients who are going to patronize your business. You need to identify customers who are going to patronize your business when it starts.
Your staff members are the ones that can make or break your business. Without efficient manpower, no business can ever succeed. An efficient staffing strategy needs to be in place if you want to reduce your staff replacement expenses.
You can hire a recruitment agency or use various recruitment tools to fill your positions with the right talent.
7. The Economy
The Economy of a country can have a serious impact on new business. It can either adversely affect a new business or positively affect it, no matter how small the business is. Understanding the role economy plays in the success of a newly emerging business is a vital factor one needs to consider before starting any business.
Many people go into small businesses they have the knowledge of, know their target market, choose the right location and still fail. Why? Because they fail to consider how their economy will affect their business. So, it is always good to consider the economy before starting any business.
Some Economic factors that usually affect businesses include consumer confidence, employment, interest rates, and inflation. When you start to notice a positive turn in the economy, expect potential new customers. This is because these customers will be experiencing the benefits of better higher-paying jobs and as a result, they tend to start buying things they may have considered more of luxury before.
8. Market Competition
Before jumping into any business, it is necessary to know the factors determining the kind of business to venture into.
Competition is another factor to consider when starting a small business. You can imagine how many small businesses sweat over finding a location where there is no competition so as to enjoy some ‘absolute monopoly’ advantage. However, it does not always work fine that way. Sometimes you need to be close to your competitors so that you can sell to both your customers and to that of your competitors.
These factors to consider when starting a small business will not be complete if I fail to say mention profit. One of the major goals of every business is to maximize profit. After mapping out your overhead expense and the actual cost of producing a product, you should comfortably have profit.
So, consider taking a rough estimate of your profit before starting any business. Your profit will help to cover some potentially serious problems should they arise unexpectedly.
Before you start a business, one of the first steps is to choose the type and structure of your business. Regardless of the business domain that your organization operates in, the business type has a direct impact on its long-term success. Choosing the right type of business is an essential step, but it requires knowledge regarding the different types as well as an estimate of the size and structure of your business.