7 Ways To Survive In Nigeria’s Harsh Economy As A Small Business Owner

If you do business and want to survive in Nigeria as a small business owner, you have to understand the economic rollercoaster that’s often difficult and unpredictable. 

As a small business owner, you’ve probably encountered “wahala” when balancing increasing costs, unpredictable market trends, poor power supply and unreliable infrastructure. On top of all these “gbas gbos”, you still have to deal with government officials coming to collect unsolicited taxes or levies, customers’ bad credit, logistics issues and the high chief of all problems – the almighty U$Dollar rate.

Haba! How do you survive these tough times as a small business owner in Nigeria? Our team at MyCEO Tribe did a little digging and discovered 7 things you can do right now to keep the lights on and even go on to thrive.

Ready? Go!

1. Prioritise Cash Flow Management

“Ego” “Kudi” “Owo” – Cash is everything!

Cash is the undefeated king in Nigeria’s volatile economy. To stay afloat, you must have cash handy. And that streams from ensuring your cash flow is always positive. This means keeping a close eye on the money coming in and going out of your business and avoiding “bad market” situations by being proactive.

 Imagine waking going to your business one Monday morning and meeting a random N50,000 fine for violating some new law passed yesterday. Some of the best practices to keep a healthy cash flow are:

• Keep an Emergency Fund: Some savings will help you survive slow periods or unexpected expenses (like our random fine example above which can happen at any time).
• Negotiate Payment Terms: Ensure that your customers or clients pay on time while extending favourable payment terms with suppliers. This keeps your cash flow steady and ensures you don’t have too much cash outside becoming worthless when costs climb.
• Avoid Credit Madness: Don’t fall into the trap of giving too much credit to your customers. What wants to go through the headache of chasing debtors? 

2. Leverage Technology

No, I don’t mean AI and big data tech (although they might help!) We’re talking about technologies for small businesses.

Techs like WhatsApp marketing for business, automated messages on Instagram and WhatsApp, running ads on TikTok or Facebook, using simple accounting software like QuickBooks, online business banking, and the like. Simple technologies you use every day.

If you’re not using technology to run your business, you’re missing out. Tech can make your hustle smarter and faster. Consider these top picks:

• Social Media Marketing: Nigeria’s social media space is booming. Platforms like Instagram, Twitter, and Facebook can drive traffic to your business at little to no cost. There’s a saying that “Na who no dey online go close shop,” meaning if you’re not online, you’re missing out on a huge market.
• E-commerce: Sell your products on popular platforms like Jumia, Konga, or even on your website. Online retail is on the rise in Nigeria, and customers are embracing the convenience of digital shopping.

For example, Zee Rice, a small Nigerian agricultural business, leveraged online platforms to build a brand that’s visible across the country. Through strategic social media marketing and a reliable supply chain, Zee Rice has expanded its reach, surviving harsh economic conditions with technology at its core.

3. Diversify Your Income Streams

“Don’t put all your eggs in one basket.” In Nigeria, the saying is 200% true! Relying on a single product or service can be risky given that fluctuating spending power. To safeguard your business, look for other ways to generate income.

• Offer Complementary Products or Services: If you sell clothing, for example, you could also offer fashion consulting or custom tailoring. Diversification increases your chances of making sales, even when the economy is tight.
• Digital Offerings: If possible, create digital products or services that can generate passive income—such as e-books, online courses, or consulting services.

4. Embrace Lean Operations

In these challenging times, keeping your expenses in check is essential. Adopt the principle of “small but mighty”—operate with a lean team and cut unnecessary costs without compromising quality.

• Outsource Tasks: Instead of hiring full-time staff, you can outsource tasks like bookkeeping, marketing, and design to freelancers or part-time staff. This way, you only pay for what you need when you need it.
• Rent Instead of Buying: For major equipment or office space, consider renting rather than making huge capital investments upfront.

5. Build Relationships and Network

Every true Nigerian business owner knows that business thrives on relationships—what we call “connection.” If you want to stay above water, have strong connections to the wealthy class or successful business owners who can not only guide you but also pool funds into your business when needed.

In a situation where you don’t have such networks, then joining business networks or communities like MyCEO Tribe is ideal! In these communities, you can meet other entrepreneurs, learn from their experiences, and gain access to potential opportunities. A key mantra for building strong networks is:

• Collaborate, Don’t Compete: Sometimes, working with other businesses can be more beneficial than competing with them. Look for ways to collaborate, whether it’s through shared marketing initiatives, joint ventures, or simply exchanging referrals.

6. Focus on Customer Loyalty

You need customers who come back to buy again and again! Such loyalty can make or break a business because it promises consistent cash flow. To encourage customers’ loyalty, keep them happy, and they will stick with you, even when the economy is down. Other ways to build loyalty are:

• Personalised Service: Treat your customers like VIPs. Nigerian consumers value businesses that offer a personal touch. That’s why “dorime” sells like crazy in nightclubs! Remember names, offer discounts for repeat business, and deliver top-notch customer service.
• Word of Mouth: Encourage satisfied customers to refer their friends and family to you. Nigerians trust recommendations from people they know, and a good word can travel far.

7. Stay Adaptable

Lastly, flexibility is key. The economic climate can change quickly. Government at any level can whip out new policies that put your business in a precarious or better position. Only businesses that are quick to adapt either to avoid hot water or take opportunities will stay ahead of the curve. Two ways to do this are:

• Monitor Trends: Keep your ear to the ground—be aware of changes in government policies, consumer preferences, and technological advancements. Adapt your business model as necessary to meet new demands.
• Be Ready to Pivot: If your business model isn’t working, don’t be afraid to switch things up. Pivoting can sometimes mean the difference between success and failure.

Final Words

Navigating Nigeria’s harsh economic conditions as a small business owner will take all you’ve got — grit, ingenuity, and a willingness to adapt. “Naija no be beans”, that’s true, but with the strategies we’ve highlighted in this piece, you can position your small business to not just survive, but thrive. My brother, my sister, go hustle!

Also, you can join our free WhatsApp community to network with other entrepreneurs learning from us how to thrive in Nigeria’s challenging economy.