What Are The Nigeria’s Most Profitable Businesses Yet Most Risky Investment?
It is a good idea to invest money into a business one is sure of its profitability. Since the goal of every business has income as a part of its main list, it is the duty of every investor to make concrete research in regard to the intended business.
The population and development pattern of Nigeria had created situations that allow some businesses to flourish more than others. There is no guarantee for total success in any business one is investing in in the country since lots of factors have their roles to play towards the success or the failure of the business.
Sometimes a simple government policy could kill a flourishing business and pave way for another one or the reverse may be the case.
The list below shows the major businesses in Nigeria that are considered profitable, but sometimes these businesses do fail to stand the test of time based on the reasons to be explained in detail as you scroll down:
LAND TRANSPORTATION
Land Transportation is the oldest business in Nigeria among others listed in this list. It had been the most profitable right from the time of its conception as a business venture to date. It could be noted that the first richest man in Nigeria before the independence was in the transportation business.
Today, almost every rich man in Nigeria can be found in one way or the other in the transport line. The list of them has gone wide that even government officials, state governments, local governments, and government institutions can be found in the business of land transportation.
The land transportation business has many categories, each category has its unit way of generating revenue for the investor. Here is the breakdown of the categories in the transport business:
MASS TRANSIT: mass transit is the most popular and competitive among others based on its daily service of transporting the masses from one place to another especially interstate transportation.
The majority of the investors use big buses and small buses for this purpose. Some investors do make about N30,000 daily on an average calculation from a single inter-state bus transit business, while those of high brands using large buses could make up to N100, 000 daily on average calculations.
INDUSTRIAL GOODS TRANSIT: industrial goods transit is another area of concentration. Though few had been said about it, there are many transporters who concentrate solely on industrial goods transportations.
The main job is to serve as a link between the manufacturing company and its marketers or distributors.
A good example of such is the conveyors of consumable goods being produced daily like biscuits, noodles, soaps, etc. some transporters do sign a special contract with the firm to become the sole transporter of their goods to their marketing units.
A good deal in this regard could make huge money in the long run for the investor especially if the production capacity of the firm is increasing steadily.
CONSTRUCTION TRANSIT: construction transit can be found in construction companies. It is a properly assigned transportation arrangement where everything that has to do with the transportation of the construction materials and/or equipment, has been assigned to a transport firm.
Transporters in this category make use of heavy-duty vehicles with big buckets for carrying chippings, sand, gravel, sand, and other related materials. Self-loaders and related vehicles can still be found in the construction transit business. It is also a lucrative business if the contract can be negotiated properly.
SHIPPING TRANSIT: if you have noticed the presence of long-heavy-duty vehicles carrying an imported containers on the roads, those are the transporters we are talking about. It is a silent lucrative business in Nigeria.
The main axis of the business is between the seaports and warehouses of the importers across the country. The owners of the container pay for the transportation of their goods based on price negotiation.
AGRO-PRODUCT TRANSIT: chemicals and fertilizers used for agriculture in Nigeria have their dealers. In some cases, a large quantity of them can be moved from factory to distributor, or from wholesaler to retailer, etc. one good thing about the business is that it is a steady one with less public influence.
Those transporting fertilizers from Eleme-petrochemicals and Notore-chemical plants located in Port Harcourt to the northern parts of Nigeria belong to this category.
HAULAGE SERVICES: haulage services are popular and less profitable than others but it is less capital intensive because HIAB and other self-loading vehicles can serve for Haulage jobs. Even towing vans are part of the haulage service though they do not use self-loaders.
SHUTTLE SERVICES: shuttle transit is the most commonly seen every day because it is closer to us. Good examples are the commercial motorcycles, tricycles, mini-buses, etc. their main function is to provide a means of transport within a city, streets, villages, etc. Tax services also belong to this category.
Limitations of the land transportation business
- Though they are very lucrative and give high revenue, the transportation business is filled with so many uncertainties.
- Maintenance remains a vital aspect of the transportation business.
- Sometimes major parts can be damaged unexpectedly keeping the vehicle away from work for a very long time.
- An accident could result in the immediate closure of the business.
- Robbery attacks and other forms of losses can make the transporter to lose the trust of the clients.
- As the age of the vehicle progresses, the ratio of repair vs income will continue to increase. This means that the vehicle’s rate of developing faults will be increased in proportion to the age.
TELECOMMUNICATION
The telecommunication business in Nigeria is not as old as the land transportation business. The business started gaining ground in the country in the year 2000. What helped the business to become a lucrative one in Nigeria is based on government intervention and the making of the right policy.
The likes of Econet, Vmobile, Celtel, Zain, MTN, Reltel, zoom, Glo, multilink, etc. were the pioneers of the business in Nigeria. Though some later gave up and shut down or sold their firm to other investors when the competition in the business became tough. Notwithstanding others like the Etisalat, and Airtel, came up to occupy the space created by the ones that had closed their business.
Clear evidence will reveal the high revenue usually generated by the companies from the sales of recharge cards and sales of internet data subscriptions. In the real sense, it could be assumed that telecommunication alone is providing up to 25% of the entire country’s employment scale. The majority of Nigerians make their money from the selling and printing of recharge cards.
Limitations of telecommunication business
- It requires huge finance to erect telecommunication masks and lay the required cables across the entire country.
- You need strategic ideas to stand out among other competitors.
- Some masks in rural areas still need to be fueled and powered regularly, therefore someone will be employed to look after them.
MUSIC
Music is the trending business now. Though it is a talent-oriented investment, those with such talent in Nigeria now tend to make a good fortune from it.
From money realized from the selling of albums and caller tones to the money realized from music tours and paid shows, including brand advertisements. Money from the music industry can be clocking into millions, especially when the singer is a superstar.
Limitations of the music industry
- You need to be a superstar or have a superstar in your industry.
- You need strategic ways of advertising your album to gain fans.
- You need to be unique in your pattern of music.
- You need to produce new songs frequently.
MOVIE
Though the movie industries in Nigeria had been experiencing a huge loss of revenue because of the modern changes in the use of software and electronic devices to make copies and download a single movie to multiple users. The development has made the quantity of each movie sold in the market drop by over 50%.
Also, the coming of modern movie industries and the excessive production of movies have also forced the market price of movies to fall.
However, movie industries with a large number of various movies currently make their money by uploading them to a U-tube channel and submitting them to cable broadcasting stations. These avenues make extra income in addition to the number sold in the market.
Limitations of movie industries
- You need to make a good number of quality movies in order to stand out among the competitors.
- You need good advertisement channels for each movie produced.
- You need to go online and build social media followers and likes to get fans that will be watching your movies.
- You may not make a huge income in the first 10 to 20 of the movies from your industry if a proper selling strategy is not in place.
CONSTRUCTION INDUSTRY
The majority of the high revenue-earning Construction industries in Nigeria are foreign companies. The reason could be because they have branches outside the country which they can rely on for support if they win any huge contract.
Only a few huge indigenous construction companies are currently surviving because of the challenges they do face. Some of them include damage to working equipment, financial embezzlement, poor management, and loss of contracts, among other problems.
However, having a successful indigenous construction company could be a huge source of financial inflow to the investor.
Limitations of indigenous construction companies
- The poor management system can run the company down
- Financial embezzlement in terms of stealing and selling of company’s properties or materials is a frequent problem.
- The lack of strong connections required to attract and win contracts remains a vital challenge.
- It will require the purchasing of quality heavy-duty construction machines and equipment in order to compete effectively with the foreign ones.
