Nigeria has over 21 ports with Lagos alone having up to 5 seaports including Tin Can Island port and Apapa port. In fact, Apapa port accounts for more than 30% of all cargo shipments in all Nigerian seaports combined.

Most companies have domiciled their main offices and warehouses in Lagos because of access to some of the busiest ports in the country. It’s easier and more convenient to move goods imported to Nigeria straight to your warehouse right there in Lagos than the rest of the country.

This trend brought about more companies moving to Lagos and with it, more people. Now, everyone wants to relocate to Lagos because of a growing perception that there are more opportunities in Lagos than anywhere else in Nigeria.

I wouldn’t blame them. The Lagos state government has been known to attract investors and companies with friendly economic environments, policies, and access to more profitable private/public sector partnerships.

The result of this is an influx of population. Companies began fighting for dominance. After all, if you can dominate Lagos, you can probably dominate Nigeria.

The coast is fixed, the levels all clear, and the competition began. This created more room for real estate developers to “expand” Lagos which has also led to more and more people moving to Lagos.

Now, Lagos now has an estimated 21 million people (2016 estimates) making it the largest city in Africa.

Little wonder, every startup wants to be domiciled in Lagos. Every foreign company wishing to expand its global presence to Nigeria prefers Lagos.

But what startups and SMEs don’t know…

Firstly, Lagos has the highest number of micro-enterprises in Nigeria – 3,224,324 SMEs. The least is Kwara state with less than 300 SMEs. This means the competitive rate for businesses to thrive in Lagos is way more than average.

Secondly, in Lagos, over 70% of the population spend between 60 – 80% of their earnings on rents. The average salary in Lagos is between N50,000 – N250,000. This is less than $700 USD. And most of these income earners have the capacity to save no more than N20,000 monthly. They spend more trying to survive than purchase luxury.

Despite the seemingly attractive large population, Lagos might not really produce the number of customers you think your business can get. It is just like an illusion.

Reasons why starting a business outside Lagos is more profitable

Despite the large population, Lagos state has a population with a not so impressive buying power (when it comes to the average Lagosian). So, as a small business, when you offer your services or products to the public, be rest assured there are over 100 other SMEs offering the exact same service to your target market a few kilometers from you.

Pricing is one key factor that greatly influences Nigerian SME. Most times, you are forced to keep reducing your price just to become the preferred choice for consumers. This is often because of excess competition. If you are outside Lagos, your chances of fighting a strong pricing war with competitors are pretty slim.

The cost of getting a business location is pretty high in Lagos. Getting a shop or an office in Lagos can actually be nerve-wracking. Because of the population influx, the real estate industry has been booming but at the cost of the rising population. Renting a decent shop or office might actually consume more than 50% of your business startup capital leaving you in a very uncomfortable position.

All said and done, Lagos is the commercial hub of Nigeria. Who wouldn’t want to launch a business in front of 20 million+ potential customers? Starting a new SME in Lagos has more than enough prospects for expansion and fast growth but it also comes with a very high-risk ratio that can end your business before it even begins.

Personally, I’ll prefer starting a business outside Lagos where I don’t have to spend a killing in the setup process and initial customer acquisition. Then when I have stabilized a bit and started to generate recurring revenue, I can move to Lagos with full backing to face the competition and succeed.

https://basetimes.com/2020/05/14/why-starting-a-business-outside-lagos-is-more-profitable/

Op I see wisdom in your post..

ManyThanks:
Op I see wisdom in your post..

Thank you.

Too many generalisations in your write up. Lagos is still the best place to start your business provided you have done a proper feasibility and marketing strategy document.

You can't use ability to purchase luxury goods to judge purchasing power as a whole.

The first thing before starting a business is identifying a genuine need, Lagos by its population gives you more opportunity to reach your target market.

I don't like Lagos because it is a slum government has refused to develop. I can't stay in a slum where I spend more time in traffic than I do sleeping.

This is the major reason I don't want to be in Lagos but I can definitely look for a way to establish my suplly chain there without having to experience the cesspit that is Lagos.

databoy247:
Nigeria has over 21 ports with Lagos alone having up to 5 seaports including Tin Can Island port and Apapa port. In fact, Apapa port accounts for more than 30% of all cargo shipments in all Nigerian seaports combined.

Most companies have domiciled their main offices and warehouses in Lagos because of access to some of the busiest ports in the country. It’s easier and more convenient to move goods imported to Nigeria straight to your warehouse right there in Lagos than the rest of the country.

This trend brought about more companies moving to Lagos and with it, more people. Now, everyone wants to relocate to Lagos because of a growing perception that there are more opportunities in Lagos than anywhere else in Nigeria.

I wouldn’t blame them. The Lagos state government has been known to attract investors and companies with friendly economic environments, policies, and access to more profitable private/public sector partnerships.

The result of this is an influx of population. Companies began fighting for dominance. After all, if you can dominate Lagos, you can probably dominate Nigeria.

The coast is fixed, the levels all clear, and the competition began. This created more room for real estate developers to “expand” Lagos which has also led to more and more people moving to Lagos.

Now, Lagos now has an estimated 21 million people (2016 estimates) making it the largest city in Africa.

Little wonder, every startup wants to be domiciled in Lagos. Every foreign company wishing to expand its global presence to Nigeria prefers Lagos.

But what startups and SMEs don’t know…

Firstly, Lagos has the highest number of micro-enterprises in Nigeria – 3,224,324 SMEs. The least is Kwara state with less than 300 SMEs. This means the competitive rate for businesses to thrive in Lagos is way more than average.

Secondly, in Lagos, over 70% of the population spend between 60 – 80% of their earnings on rents. The average salary in Lagos is between N50,000 – N250,000. This is less than $700 USD. And most of these income earners have the capacity to save no more than N20,000 monthly. They spend more trying to survive than purchase luxury.

Despite the seemingly attractive large population, Lagos might not really produce the number of customers you think your business can get. It is just like an illusion.

Reasons why starting a business outside Lagos is more profitable

Despite the large population, Lagos state has a population with a not so impressive buying power (when it comes to the average Lagosian). So, as a small business, when you offer your services or products to the public, be rest assured there are over 100 other SMEs offering the exact same service to your target market a few kilometers from you.

Pricing is one key factor that greatly influences Nigerian SME. Most times, you are forced to keep reducing your price just to become the preferred choice for consumers. This is often because of excess competition. If you are outside Lagos, your chances of fighting a strong pricing war with competitors are pretty slim.

The cost of getting a business location is pretty high in Lagos. Getting a shop or an office in Lagos can actually be nerve-wracking. Because of the population influx, the real estate industry has been booming but at the cost of the rising population. Renting a decent shop or office might actually consume more than 50% of your business startup capital leaving you in a very uncomfortable position.

All said and done, Lagos is the commercial hub of Nigeria. Who wouldn’t want to launch a business in front of 20 million+ potential customers? Starting a new SME in Lagos has more than enough prospects for expansion and fast growth but it also comes with a very high-risk ratio that can end your business before it even begins.

Personally, I’ll prefer starting a business outside Lagos where I don’t have to spend a killing in the setup process and initial customer acquisition. Then when I have stabilized a bit and started to generate recurring revenue, I can move to Lagos with full backing to face the competition and succeed.

https://basetimes.com/2020/05/14/why-starting-a-business-outside-lagos-is-more-profitable/

If only you know the power of the information you just released, you would have sold this secrete to business moguls for over a million naira.

Please are you a statiscian or Data analyst? Am interested in a career in that field as a statistics undergraduate in my final year.

tommyken:

If only you know the power of the information you just released, you would have sold this secrete to business moguls for over a million naira.

Please are you a statiscian or Data analyst? Am interested in a career in that field as a statistics undergraduate in my final year.

Thanks for your comment. I am just a writer.

databoy247:
Nigeria has over 21 ports with Lagos alone having up to 5 seaports including Tin Can Island port and Apapa port. In fact, Apapa port accounts for more than 30% of all cargo shipments in all Nigerian seaports combined.

Most companies have domiciled their main offices and warehouses in Lagos because of access to some of the busiest ports in the country. It’s easier and more convenient to move goods imported to Nigeria straight to your warehouse right there in Lagos than the rest of the country.

This trend brought about more companies moving to Lagos and with it, more people. Now, everyone wants to relocate to Lagos because of a growing perception that there are more opportunities in Lagos than anywhere else in Nigeria.

I wouldn’t blame them. The Lagos state government has been known to attract investors and companies with friendly economic environments, policies, and access to more profitable private/public sector partnerships.

The result of this is an influx of population. Companies began fighting for dominance. After all, if you can dominate Lagos, you can probably dominate Nigeria.

The coast is fixed, the levels all clear, and the competition began. This created more room for real estate developers to “expand” Lagos which has also led to more and more people moving to Lagos.

Now, Lagos now has an estimated 21 million people (2016 estimates) making it the largest city in Africa.

Little wonder, every startup wants to be domiciled in Lagos. Every foreign company wishing to expand its global presence to Nigeria prefers Lagos.

But what startups and SMEs don’t know…

Firstly, Lagos has the highest number of micro-enterprises in Nigeria – 3,224,324 SMEs. The least is Kwara state with less than 300 SMEs. This means the competitive rate for businesses to thrive in Lagos is way more than average.

Secondly, in Lagos, over 70% of the population spend between 60 – 80% of their earnings on rents. The average salary in Lagos is between N50,000 – N250,000. This is less than $700 USD. And most of these income earners have the capacity to save no more than N20,000 monthly. They spend more trying to survive than purchase luxury.

Despite the seemingly attractive large population, Lagos might not really produce the number of customers you think your business can get. It is just like an illusion.

Reasons why starting a business outside Lagos is more profitable

Despite the large population, Lagos state has a population with a not so impressive buying power (when it comes to the average Lagosian). So, as a small business, when you offer your services or products to the public, be rest assured there are over 100 other SMEs offering the exact same service to your target market a few kilometers from you.

Pricing is one key factor that greatly influences Nigerian SME. Most times, you are forced to keep reducing your price just to become the preferred choice for consumers. This is often because of excess competition. If you are outside Lagos, your chances of fighting a strong pricing war with competitors are pretty slim.

The cost of getting a business location is pretty high in Lagos. Getting a shop or an office in Lagos can actually be nerve-wracking. Because of the population influx, the real estate industry has been booming but at the cost of the rising population. Renting a decent shop or office might actually consume more than 50% of your business startup capital leaving you in a very uncomfortable position.

All said and done, Lagos is the commercial hub of Nigeria. Who wouldn’t want to launch a business in front of 20 million+ potential customers? Starting a new SME in Lagos has more than enough prospects for expansion and fast growth but it also comes with a very high-risk ratio that can end your business before it even begins.

Personally, I’ll prefer starting a business outside Lagos where I don’t have to spend a killing in the setup process and initial customer acquisition. Then when I have stabilized a bit and started to generate recurring revenue, I can move to Lagos with full backing to face the competition and succeed.

https://basetimes.com/2020/05/14/why-starting-a-business-outside-lagos-is-more-profitable/

Lagos is still the place to be in Nigeria as far as running a business is concerned

I need you to do me a big favor. Please join my Doing Business IG page. I am promoting business related content. Help me share value added information by just following the page. This is my own little contribution to making Nigeria a better place. Thank you so much.

https://www.instagram.com/p/CAapC41gVc1/?igshid=1qve5h65ewp6q

databoy247:
Nigeria has over 21 ports with Lagos alone having up to 5 seaports including Tin Can Island port and Apapa port. In fact, Apapa port accounts for more than 30% of all cargo shipments in all Nigerian seaports combined.

Most companies have domiciled their main offices and warehouses in Lagos because of access to some of the busiest ports in the country. It’s easier and more convenient to move goods imported to Nigeria straight to your warehouse right there in Lagos than the rest of the country.

This trend brought about more companies moving to Lagos and with it, more people. Now, everyone wants to relocate to Lagos because of a growing perception that there are more opportunities in Lagos than anywhere else in Nigeria.

I wouldn’t blame them. The Lagos state government has been known to attract investors and companies with friendly economic environments, policies, and access to more profitable private/public sector partnerships.

The result of this is an influx of population. Companies began fighting for dominance. After all, if you can dominate Lagos, you can probably dominate Nigeria.

The coast is fixed, the levels all clear, and the competition began. This created more room for real estate developers to “expand” Lagos which has also led to more and more people moving to Lagos.

Now, Lagos now has an estimated 21 million people (2016 estimates) making it the largest city in Africa.

Little wonder, every startup wants to be domiciled in Lagos. Every foreign company wishing to expand its global presence to Nigeria prefers Lagos.

But what startups and SMEs don’t know…

Firstly, Lagos has the highest number of micro-enterprises in Nigeria – 3,224,324 SMEs.

Secondly, in Lagos, over 70% of the population spend between 60 – 80% of their earnings on rents. The average salary in Lagos is between N50,000 – N250,000. This is less than $700 USD. And most of these income earners have the capacity to save no more than N20,000 monthly. They spend more trying to survive than purchase luxury.
[/b] Despite the seemingly attractive large population, Lagos might not really produce the number of customers you think your business can get. It is just like an illusion.[b]

Reasons why starting a business outside Lagos is more profitable

[b][/b] Despite the large population, Lagos state has a population with a not so impressive buying power (when it comes to the average Lagosian). [b][/b]So, as a small business, when you offer your services or products to the public, be rest assured there are over 100 other SMEs offering the exact same service to your target market a few kilometers from you.

Pricing is one key factor that greatly influences Nigerian SME. Most times, you are forced to keep reducing your price just to become the preferred choice for consumers. This is often because of excess competition. If you are outside Lagos, your chances of fighting a strong pricing war with competitors are pretty slim.

The cost of getting a business location is pretty high in Lagos. Getting a shop or an office in Lagos can actually be nerve-wracking. Because of the population influx, the real estate industry has been booming but at the cost of the rising population. Renting a decent shop or office might actually consume more than 50% of your business startup capital leaving you in a very uncomfortable position.



Personally, I’ll prefer starting a business outside Lagos where I don’t have to spend a killing in the setup process and initial customer acquisition. Then when I have stabilized a bit and started to generate recurring revenue, I can move to Lagos with full backing to face the competition and succeed.

https://basetimes.com/2020/05/14/why-starting-a-business-outside-lagos-is-more-profitable/

You. Nailed it. 1000 likes for you

I still think Lagosians have more buying power than people from other states.

Almost all the jobs are here.

Great post bro

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Lol, this is not but misleaded information to the best of my knowledge.

@op, have you ever done business in Lagos and outside of Lagos before?

Do you know the reason why many businesses outside Lagos close down during this pandemic period? They closed down because of breakdown in supply to Lagos.

Do you know that more than 80 percent of total processed chicken,eggs and other agricultural products we produce in Ibadan go to Lagos?

The talk of purchasing power in your post made it more laughable. I know someone who sell Frozen food on a retain level inside market in Lagos and make over 100k sales each week day and almost 400k every weekend. So, tell me where in any part of Nigeria she can make this kind of sale?