Nigeria has become a “tech ecosystem” where more companies are starting their business to offer tech-related services. If you’re looking to start a tech company in Nigeria, doing market research, defining the target market, putting some structure to the business and meeting the regulatory compliances are important.
This article outlines the steps you to take to start your first tech company in Nigeria.
What is a Tech Company?
Also called a tech startup; it is a business that develops and offers a wide range of technological services or products to the target audience. Through these services, the company can independently develop these services and use them to solve peculiar challenges in the market.
Step-by-Step Guide on How to Start a Tech Company in Nigeria
Tech is a broad industry and is an emerging market in Nigeria. With a large pool of skilled professionals and investors; the market is worth exploring.
The steps to launching and scaling a tech startup in the country are outlined below:
1. Explore the Market Beforehand
As much as the market is emerging and has lots of potential; you still want to make the right investment. Exploring the market can be done in the following ways:
2. Choose a Niche
Which aspect of the market challenges will your tech startup be dedicated to? In Nigeria, the most promising ones are:
- Healthcare
- Education Technology (EdTech)
- Financial Technology (FinTech)/online banking app.
- Electronic Commerce (eCommerce)
3. Validate the Market
With many tech companies offering similar services; you already have competition by default. The key to staying ahead is conducting thorough market research to ascertain the viability of the tech startup you want to start.
When doing the research, pay attention to the following:
- Understand the demographics and the different needs they have.
- Evaluate the competition, i.e., check on your competitors to see what they’re already doing. That helps you explore better ways to provide better solutions to the target market.
- Analyze the market trends to see if your tech company’s services or products are worth investing in.
- Evaluate the target market’s purchasing power.
Also Read: How to Trademark Your Tech Company in Nigeria
4. Develop a Business Plan
Your tech company’s business plan is a blueprint that outlines what the business is all about and the different approaches to making the venture a success. It also serves as a detailed breakdown of everything, from the target market to the strategies and financial projections.
Investors would want to have a look at it to see if it’s worth committing their funds and connections for the best results.
Your business plan must include the following:
- Operational plan
- Financial projections
- Executive Summary
- Service or product description
- Company’s description
- Marketing and sales strategies
- Management team
- Market analysis
5. Put a Structure to the Company
Your tech company needs to have a legal structure and backing so it can operate and offer services in Nigeria without hassles. Thus, registering it becomes a must.
The legal structure of the startup is entirely up to you and there is a wide range of options to pick from:
- Incorporation as a company
- Sole proprietorship
- Limited Liability Company (LLC)
- Partnership
Your business needs to be registered with the Corporate Affairs Commission (CAC). The CAC, through the provisions of the Companies and Allied Matters Act (CAMA), has been empowered to do the following:
- Oversee the registration and or incorporation of a company.
- Regulate the running of the company.
- See to the winding of the registered companies.
6. Ensure the Company Meets Basic Compliances
Companies that offer tech-related services or sell similar products are required to meet the different compliances. Registering with other regulatory bodies is a sure way to start the company on the right foot.
The following are some regulatory bodies:
Nigeria Telecommunication Commission (NCC)
Registering with the NCC is mandatory if your tech startup offers services that require using telecommunication networks.
Federal Inland Revenue Service (FIRS)
Registering your tech company with the FIRS should be done as soon as you’re done with the CAC. This is important because the startup has tax obligations to the country. This registration can also be done at the state level, where it is registered with the state’s Inland Revenue Service (IRS).
On completion, a Tax Identification Number (TIN) will be issued. Use that to file tax returns, both the Income Tax and Value Added Tax (VAT).
National Office for Technology Acquisition and Promotion (NOTAP)
Registering your tech company with NOTAP is required if the startup has through its foreign investors, looks to transfer foreign technology for use in Nigeria. You can also register with the agency if your start looks to use intellectual property rights or provide supervisory assistance.
National Information Technology Development Agency (NITDA)
By the provisions of the National Information and Technology Agency Act; all tech companies in Nigeria are mandated to register with the NITDA.
Among many other things, the National Information and Technology Agency (NITDA) is empowered to guidelines on the monitoring of electronic data exchange.
Nigeria Investment Promotion Commission (NIPC)
Registering your tech start with the NIPC is important, if the company looks to attract foreign investments.
7. Seek Funding
You can attract local and foreign investments to your tech company. From bootstrapping to accessing government grants; you have a lot of options to choose from.
Your tech company can seek for funding from angel investors, venture capitalists or you go the way of crowdfunding.
8. Setup a Team
You need professionals from different fields that your service serves to come to be a part of the team. Fostering collaborations also works.
9. Create a Unique Product
You’re now set to launch but before that, you need to have a product. Aim to create a Minimum Viable Product (MVP). It’s a prototype mirroring the value proposition of your tech startup, as well as meeting the desired needs.
Remember to seek feedback from the target customers and optimize the product to serve their needs.
10. Launch Your Tech Startup
The journey is finally getting to the destination. After iterating the MVP, you can then go ahead to create a defined marketing strategy to draw quality leads to come check out what your company has to offer.
Also Read: Requirements for Trademarking Your Tech Startup in Nigeria
Conclusion
The last stage of launching your tech company is taking note of what works and scaling it to generate steady revenue.
Starting a tech-inclined business in Nigeria can be super-competitive, but with a unique MVP and a well-defined marketing approach; you should be on your way to gaining a share of the market.
