A few days ago, the IMF confirmed what everyone had feared for a long time now – Nigeria has officially slipped into recession. There is widespread anger, despair, confusion and frustration. We see massive loss of jobs, companies are shutting down and aspiring entrepreneurs put their business ideas on hold to see how things turn out.
“The only way to survive in a recession is to make more money!”
I am a wealth evangelist. I don’t know what the government should or should not do to get the country out of recession and frankly, I don’t think it’s my job. What I do know is: in the face of economic adversity, there are endless opportunities for the smart entrepreneur to make money. The purpose of this article is to bring those opportunities to your attention. They are recession proof business ideas you can make money from in the frustrating economic climate. But first…
Should You Start a Business in a Recession?
People ask, is this the best time to start a business? Certainly not, right? Or is it? We put the question to our Featured Entrepreneurs and this is what some of them had to say:
“There is no better time to start a business in Nigeria than now. Nigeria will be better but everyone has to be at their best. Most countries doing well are based on skilled labor and SMEs.” Promise Oghor – CEO Boundless Pick Ltd
“I do not agree this is the worst time to start a business in Nigeria. It is actually the best time. If you can identify what people need, especially items they used to import, and provide same quality and standard in Nigeria, I believe people will patronize you. The best time to set up that business is now.” Oghenefego Ofili – Creative Director, Teo-Inspiro Intl Ltd
“Yes, things are hard now. Everyone is complaining including myself. But I believe that the best time to prosper is during hard times. There is no preferred time to start a business. The best time to start a business is now. Nigeria is full of opportunities and we are not taking advantage of them.” Eze Chijioke – CEO GoodDay Paper Mills Ltd
Even our very own Pat Utomi had a thing or two to say about why recession could be a good thing:
“Let me shock you by saying that the recession we face in Nigeria is a golden opportunity. It is not a problem; it is an opportunity to finally get the Nigerian economy right. So without appearing to scandalize anybody, I actually pray for oil prices to stay down and stay down for a long time. Then, we will come to our senses and we will know that Nigeria really is a rich country.” Source
If you are still not convinced, Forbes has an article on 10 reasons the best time to start a business is during a recession. Below are points 1, 2 and 8 on the list. You can read the rest of the article here.
- People want innovation
Recessions create problems. They also slow investment in innovation down. Consumers and businesses are looking for solutions to problems which presents opportunities for startups to solve.
- People want to save money
As a nimble startup with few expenses, you should be able to undercut your competitors. Their clients will be watching their wallets and looking for cheaper alternatives, so it’s the perfect time to make a sales pitch to win them over. Do a good job, and you’ll keep those clients when the economy recovers
- Smart investors want to invest
But if you need funding — perhaps there’s plant and equipment costs that can’t be avoided — there’s still plenty of determined investors who are looking for new business opportunities. When the economy falters, angel investors in particular, look to move their money out of the stock market and may be willing to fund you if your prospects are promising
So if you are thinking this is not a good time to make money, think again.
The businesses listed below are focused on necessity-based products or services. They are recession proof business ideas. You can start them anytime and succeed. The idea is to bring these opportunities to your attention by highlighting them. I encourage you to do further research and decide on which of them is best for you. Here are 13 good businesses to start in a bad economy:
13 Good Businesses to Start in a Bad Economy
1. Food business
Food business, in any capacity, is evergreen. People must eat. There are some ways you can get involved in the food business. You can set up a small restaurant. If you focus of quality and best service, you will never run out of business. You can also start an outdoor catering service for weddings, events and whatnot. Here is a first-hand account on how to start a small catering business. If cooking is not your thing, you can start foodstuff business as a wholesaler or retailer. You can also export foodstuff to other parts of the world. No matter how you decide to start, food is a necessity and that is why it is at the top of the list.
Transportation is another sector that booms in a recession. With increased fuel prices, massive loss of jobs and high inflation rates, some people would prefer public transport over driving their own cars. You can tap into this opportunity and drive your way out of recession. I know a lot of bankers who lost their jobs and started a taxi service business out of their savings. They earn more now than they did at the bank. Companies like Uber are changing the way people think about taxi service business. If you cannot afford a vehicle, you can enter into a hire-purchase deal with someone who can afford it. With determination and focus you make progress and get a vehicle of your own.
3. Technology Based Services
Following Mark Zuckerberg’s visit to Lagos, the Nigerian tech industry has come under the spotlight after the Facebook founder’s interest in companies like Andela and CCHub. The future is tech! People need more creative and automated ways of getting things done. You don’t have to be a tech geek to tap into this industry growth. You can take part as an angel investor and partner with tech founders who are in need of capital investment. Vc4a.com offers you such opportunities to locate and invest in emerging tech startups.
4. Information Marketing
Information is the most expensive commodity in the world. Recession is usually a time of confusion. Prices are skyrocketing, jobs are being lost and a lot of people are wondering: what do we do next? How do I get another job? How do I get more money to make ends meet? How do I stay ahead of the competition in business? If you have valuable information that answers any of the questions above, you are in business. How to go about it? Start a blog, organize seminars, package your information product (e-book, videos, podcasts, and webinars, etc) and people will pay you to get them.
Freelancers never go out of business. There are lots bloggers who have no time to write, companies who need better copywriters, startups who need graphics designers, etc. Whatever you are good at, there are people who are willing to pay you for it. Nigerians make money on sites like Fiverr and Upwork. Fiverr is a great platform for freelancers to make money and has become rather very competitive lately because more people are getting into the system.
People who have been there for long usually provide training for starters, helping them stay ahead of the competition and make more money. Emmanuel Riches (+234 803 385 5240) is one of such people. If you need training on getting started with Fiverr, get in touch with him. SourceGig is a freelance sites for Nigerians. It’s not as busy as Fiverr which is also a good thing. You can sign-up with them and get early bird’s advantage.
6. FMCG Manufacturing
Fast Moving Consumers Goods (FMCG) are products people use daily like Soaps, tissue paper, toothpicks, matches, etc. If you can find what people need, especially items they used to import, and offer same quality and standard in Nigeria, you are in business. Nigerians are learning to buy Naija to grow the Naira. Dangote, the richest man in Africa, realized the huge potentials in this lucrative sector and has largely dominated the FMCG market. Fortunately you don’t have to be a Dangote to start FMCG production. This entrepreneur started his tissue manufacturing company 5 years ago from almost nothing.
7. Financial advisory
If you are a financial expert, you can advise people on how to make wise investments. A banker who just lost his job would be faced with the question of what to do next. So would an importer who just lost business because of the embarrassing forex situation. You can start a small consulting firm to fill this need. You can also set up yourself as an expert in this field by starting a blog that educates people on what to do with their money. Starting a blog is easier than you may think. Follow this link to learn how to start your own blog today.
You can export commodities to other countries and make money. To export or not to export is no longer the question. The question is how to export. Read this most comprehensive step-by-step guide on non-oil export business in Nigeria.
I am a strong advocate of agriculture as a tool for economic diversification and prosperity. There is something in agriculture for everyone no matter the budget or ability. To get you started, I put together a list of 50 agricultural business ideas for entrepreneurs. There’s bound to be something in there that will make you rich.
10. Real estate
Importers who cannot import anymore because of the FOREX instability usually take their money and invest in real estate. Your part could be to advise them on where to get the best deals and where to get available property for purchase. Read this lecture about how this entrepreneur started his own profitable real estate business with little capital.
11. Funeral services
This is one of the most underutilized business sectors in Nigeria. Probably has to do with the fact that they deal mostly with dead people. But for those who are able to get around it, funeral services is really a lucrative source of income no matter the economic weather.
12. Sports betting
I don’t advocate gambling as a business model. But having a shop where gamblers gamble is one of the most lucrative businesses yet because people turn to betting as a means of raising easy money. You can start as an agent with a sports betting agency and work your way up from there.
13. Entertainment Business
Entertainment is another sector that sees progression in a recession. You don’t have to be a comedian or an artiste to get involved. You can organize an event that pulls artistes and comedians. People will pay you just to make them laugh and have a good time.
The only way to survive in a recession is to make more money. I hope this article helps you do that. Visit our Business Ideas section to get more profitable business ideas and for some touch of motivation, read how our Featured Entrepreneurs started and prospered in their business.
I would be interested to hear your questions and comments. Did I miss anything? Let me know.
Whatever you do, prosper!
Image Credit: Claplife.com