Step 1: Register A Business Name:
When you have decided to go into business, registering the business is the next thing to do. It saves one from a lot of legal issues when one registers the company.
Registering a company, in simple terms, means letting the government know you now own a business and that your business name is yours.
The Corporate Affairs Commission is the Agency authorized by the Company and Allied Matters Act 1990, Pursuant to section 659 to register businesses in Nigeria. You might not need a lawyer to register your business depending on the type of business you want to engage in.
There are different categories of the business registration in Nigeria. They include;
Registration of the business name,
Registration for Private Limited Company (LTD),
Public Limited Company (PLC),
Company Limited by Guarantee (LTD/GTE),
Unlimited Company (ULTD)
The one that is likely to concern you as a small and medium company is the registration of the business name and probably Private Limited Company.
Here is the basic step to register a business name:
The first thing you do is actually find a business name. You are probably thinking that this point is not necessary, after all, who starts a business without having them? But it is necessary to talk about it because of the many business name ideas that are already in existence. Therefore it is important that you be creative and think outside of the box. It probably sounds ridiculous that any name that comes off the top of your head is already taken but it is the truth. That is why it is necessary to get a name before going to CAC so as not to waste time frequenting the place over a choice of a name.
You go to the Corporate Affairs Commission Office nearest to you to obtain a Form for application with a token. On the form, you would fill your name, address, the type of company you want to register for and your business name (you would be given the opportunity to pick the first choice and an alternate name in case the first name is not available). Before you submit the form, make sure you make a photocopy so they can use it to find your form when you get back. After submission, you would be required to come back in three days to find out if the name(s) is available for use.
Then you have to visit again about a week to two weeks later to find out if the name has been approved. If the name has been approved, then you proceed to the business registration.
You will be presented with a business registration form to fill, which should be filled carefully. Do not hesitate to ask for help or clarification when you do not understand, so you do not make mistakes. You will also be required to pay another sum of money (about 10,000 or more) when you want to submit the form. After submission, you would be given an affidavit/attestation form, which you would be required to take to a magistrate court for endorsement. The court would also collect a token for that.
You would be required to submit certain documents with the registration form. Check this website http://docupload.cac.gov.ng/ to see the documents and all the requirements necessary to save time. Also, you might also want to confirm from those who have done ahead of you to be accurate in all.
If you have your attestation, the registration form, requirements and payment of the required fees, you go back to CAC office to submit them. If everything goes as planned, you should be able to receive your business name certification in one or two weeks. But considering the Nigerian factor, it might extend that time.
Note that many of these things can be done online when you visit CAC page online. A lot of people, however, are still skeptical about going using the online steps because of the hitches involved with online things in Nigeria but trust the manual method more. It is however left to use to choose which you would prefer
Step 2. Find Products To Export
Now that you have registered your business name, you are ready to start exporting. But before you do that, you need to decide on what exactly you want to export.
There are a lot of items you can export especially agricultural items. You can find the full list here.
This is a very important stage that you would pass through if you decide to go into export business. It is quite easy to decide to go into export business but more difficult to decide which particular one to go in for.
There are quite a number of products one can trade in but the circumstances surrounding each one differs, so it is imperative to have an idea of what each entails before one involves in it.
Otherwise, it could pose a problem later. The points below would help in finding the product to export.
How to Decide on What to Export:
Examine trends: Every business examines trends, from fashion to investment bankers. Trends drive a business and it helps businessmen go into business with their eyes wide open. Before you go into a business, whether this particular export business or any business, in particular, it is important to know if it is something in vogue, something people are interested in and talking about and something that would sell. This is what people find out when they do a market survey. Luckily, at this time, the internet is there at our disposal and it would save a lot of stress to find out what people are saying.
Consider your passion: The place of passion in doing whatever you want to do cannot be overemphasized. When you have a passion for whatever it is you are doing, it will push you when the going gets tough. There is no need sugar coating it and making it look like it would all go smoothly. There is nothing worth having that doesn’t face challenges. But when one is faced with challenges, the motivation is usually the passion they have. So you might want to consider something you have a passion for.
Check the competition: This is in two ways. Although economists say monopoly brings complacency, too much competition also saps business. You do not want to trade in a particular product that has so many competitions except you are sure you are adding something new to it. Also, you would need to research your competitors (both international and local) so as to learn about them and see what you can do differently or how not to repeat their mistakes.
Make research: Check all the products and learn all you need to learn about them. This might take time but it is better time spent preparing than the time that would be wasted after all is put into the business. So make a list of all the possible products you can trade in and do extensive research on each so as to make a more informed decision.
Identify government/customs policy: Identify the import and export laws provided by your country and the country you would likely want to trade with. The customs laws on each of those goods would also help you make an informed decision on the product that is worth trading in.
Identify your market: You have to not only identify particular buyers but also the country they would be in. it is recommended that you find out more than one buyer and may be just a country as a start to see how they would react to the product you want to trade in.
Step 3: Source for Foreign Buyers of Your Product
The next question that is likely to bug your mind is how to find buyers because really, what is the point of having a product that is not demanded. It is necessary for the survival of your business to have people who would be interested in buying what you have to offer. It can be more complicated when you cannot see the buyers as in the case of local trade where you can speak one on one to them. In the case of international trade, you would need to strategize in order to get buyers
Go online: The internet has really made life a whole lot easier than we would have thought. There is hardly any information that one needs that one cannot find on the internet. All you need to do is go through the different search engines available to find people who would be interested in what you are selling. You could also go through e-markets such as Alibaba to find the people whose business would need the product you are selling.
Chamber of Commerce: Different countries have their Chamber of Commerce in Nigeria, as well as the bilateral Chamber of Commerce. You can learn a lot about trade in these countries by visiting them and luckily, they have websites that you can visit easily. All you have to do is search for them online
Attend Trade fairs: Trade fairs or trade shows are exhibitions where different companies in a particular industry come together to exhibit their products and services. It is organized for marketing and networking. If you attend some, you would have a good idea of particular individuals or companies that would be interested in your work.
Register with National Export Boards: The NEPC (Nigerian Export Promotion Council) for instance is tasked with promoting the business of Nigerian exporters. It will do your business good to register with NEPC, so they can register you as a Nigerian exporter and commit to referring you to buyers on inquiry. They also organize trade fairs to create a buyer-seller relationship.
Buying agents: Many businesses abroad have buying agents who come into the country to help them buy their products instead of them transacting virtually with buyers. So you can make contact with these buying agents and show what you are selling to them.
Online Ads: The internet has made the world a global village. So from your little corner in Nigeria, you can reach the world about your products. You can run ads like Google ads or Facebook/Instagram ads to showcase your business to areas far beyond your scope of reach.
Contact Industry associations: Some industries have associations that contracting can help you get a list of companies that might be interested in what you are selling. All you would need to do is contact them and request for a list of their companies and for those that have a website, it is even easier.
Social media platforms: Social media has evolved and it has gone far beyond a platform to just share pictures and catch up with friends. A lot of businesses are expanding through getting involved on social media. All of them can serve as a platform to connect with buyers but LinkedIn (which was built with professionalism in mind) and Facebook especially can really help you find what you are looking for. Make sure right from your profile, what you do is clear.
Step 4: Find Suppliers of Your Product
The suppliers of your products are very important to the success of your business. What would make the buyers keep coming to you is the quality of your product and you can only determine the quality of your product by the kind of suppliers you get.
That is why it is important to take the time to find the right suppliers. There are two categories to consider when sourcing for suppliers. Those two categories are; how to find suppliers and what to look out for when finding suppliers.
Go online: You are probably wondering if everything has to do with the internet. Yes, the internet practically has everything you need. So, go online to search for suppliers of whatever product you are looking for. Many people have issues searching on Google. The trick to searching on Google is finding the keywords. So, it would help if you use different words interchangeably. Words like wholesale, supplier, wholesaler, and distributor combined with the product. Also, you could search for words like “cocoa wholesaler” or “wholesaler of cocoa.” Basically, you have to use different words till you get what you are looking for. Additionally, you can search for directories of manufacturers or ads to direct your search.
Trade fairs: Trade fairs have been explained above and you can find different suppliers when you go to trade fairs to reduce your stress. If you have contacts in the industry, then it makes it easier. Even if you do not meet the exact supplier of your product, you are bound to see someone that can point you to what you are looking for. Make sure you mingle when you go to trade fairs. Do not just stay on your own, expecting answers to come from heaven. Speak to people and you would be surprised how much information you would leave with.
Referral: You can also find suppliers by referral. You can talk to people who are already in the business and gone ahead of you to tell you who their suppliers are. You can also ask around your circle, you might be surprised how much information the people around you would supply you with. You could as well ask on the social media platforms if you just might get answers.
What to look out for:
After you have found your supplier, you need to look out for certain things. Sometimes, you might have to have done business with them a time or two to determine if they are worth doing business with. So, it is not in all situations that you would make your decisions without trial. However, even before trial, there are quite a number of things to look out for.
Stability: You want to look out for the supplier that has been around for a while, not one that is here today and gone tomorrow. You can ask other customers for a review to determine how stable the supplier is. The length of presence can be an indication that they can be trusted.
Another point to look out for is reliability. In this case, you might have to do business with them first. One of the things to watch out for is the service. Do they keep to time? Do they send the right amount of products requested? How do they package the products? Are they competent? How often do they stay updated? These are some of the questions to ask yourself.
Quality: You can never go wrong with quality. Substandard products have destroyed many businesses and you do not want to end up the same. So watch out for the quality of their products.
Price: Of course, the price is another factor. You have to put many things into consideration to determine the price to go with. Note that it would affect your business if you go with a less quality product because it is cheaper. So, the point is not beat down the price at all costs but to find a reasonable price as well as a quality product because price can chase potential buyers as well. So you have to put the logistics and your profit into consideration.
Location: The farther they are from you, the costlier the cost of transportation and they would affect the ultimate price of your goods. So only go for long distance suppliers when you are sure you have exhausted all the options of those near you. Also, check the place where the products are warehoused if it is safe and would not reduce the quality of the products.
Step 5: Determine the Price of Your Product
Once you have put everything in place, the next thing is to start selling your product. But before you do that, you need to determine how much you will be selling your product.
To arrive at the right price, you will need to
Take an inventory of all you had to do to get your product and the final shipping to the buyers and make a calculation. Make sure not to leave anything out of all you spent – all the export duties or even translation cost if you had to employ a translator – so you do not run at a loss.
You will then have to do a market research to see what price others are selling, what buyers are willing to pay and also the rate of demand. Sometimes, the demand might affect your price. A product on high demand will enjoy higher price than one without much market demand.
You might also have to match the prices of other sellers on the market if you have many competitors. This is because if you sell a lot higher than others, your buyers might walk considering they have many options.
Step 6: Get a handle on Logistics
An exporter needs to learn how to ship and all other requirements for hitch-free transportation of the goods. The exporter is expected to know how to pack and label the product correctly, document properly and insure against any damage. Quite a number of exporters employ the services of freight forwarders to take care of all the logistics.
Quite a number of exporters employ the services of freight forwarders to take care of all the logistics.
Packing: A lot of products have been lost in transit due to poor packing. The major problems are usually moisture due to rain or humidity as a result of lack of ventilation, breakage due to piling up the goods together or when moving them, weight and theft. So you have to pack the goods right to avoid all these problems. Try to find the right materials to package your products in to avoid moisture, breakage and so it can take whatever weight would be piled up on it. And also avoid labeling with brand or content name to avoid theft.
Labeling: Although it is better not to label the products with the brand and content name, it is also expected to label the goods. The label will be known to be a buyer as well so as to make it easy for them to identify the goods. Some of the major items to add to the label include; shipper’s mark, country of origin (exporters’ country), number of packages and size of cases (in inches and centimeters), weight marking (in pounds and in kilograms), cautionary markings, such as “This Side Up” or “Use No Hooks” (in English and in the language of the country of destination), handling marks (international pictorial symbols), port of entry, labels for hazardous materials (universal symbols adopted by the International Maritime Organization).
Documentation: The product shipping requires a number of documentation, which is majorly based on the requirements of both countries.
Commercial invoice: The commercial invoice is a bill for the goods from the buyer to the seller, which includes basic information about the transaction, such as a description of the goods, the address of the shipper and seller, and the delivery and payment terms. The invoice is usually a proof of ownership and to get paid, plus some governments use it to assess customs duties.
Bill of lading: Bills of lading are contracts between the owner of the goods and the carrier (as with domestic shipments).
Consular invoice: Certain nations require a consular invoice, which is used to control and identify goods. The invoice is purchased from the consulate of the country to which the goods are being shipped and is usually prepared in the language of that country.
Certificate of origin: Certificate of origin is simply the certificate indicating the origin of the product. Some nations require it and it can be gotten from the Chamber of Commerce.
Inspection certification: Some buyers and countries may want a certificate of inspection conforming to the provisions of the products shipped. Inspection certifications are often performed by independent testing organizations.
Dock receipt and warehouse receipt. These receipts are used to transfer accountability when the export item is moved by the domestic carrier to the port of embarkation and left with the international carrier for export.
Destination control statement: This statement appears on the commercial invoice, ocean or air waybill of lading, and SED to notify the carrier and all foreign parties that the item may be exported only to certain destinations.
Insurance certificate: If you provided insurance, the insurance certificate indicates the provisions of the insurance.
Export packing list: The export packing list details the material in each package, specifying the type of package, whether it is a box, crate, drum or carton. It also indicates the individual legal, net, tare, and gross weights and measurements for each package. The list is used by the shipper or forwarding agent to determine the total shipment weight/volume and whether the correct cargo is being shipped. In addition, customs officials may use the list to inspect the cargo. The packing list should be attached to the outside of a package and indicated.
Shipping: The type of shipping is also very important. Before shipping, you would need to ask the buyer the where they want the products to be shipped to. It will be safer not to assume. Also, you should consider other factors, like cost, delivery schedule and accessibility of the destination to the buyer before deciding whether to ship by air or the ocean. Also, booking ahead is usually safer.
Insurance: Due to damage that could come with the goods, it is safe to ensure the product. The local insurance might not cover the international shipment. However, the buyer or seller, depending on the terms of sale, can apply for insurance with the international insurance carrier or you could contact freight forwarders for more details.
The above step will guide to on the steps to take to begin exporting. but let us look at another aspect of the export business like how profitable the business is in Nigeria