Student entrepreneurship is on the rise in Nigeria. Student entrepreneurship has gained popularity across Nigerian campuses in recent years. An increasing number of students are pursuing entrepreneurial ventures and self-employment, rather than solely focusing on securing employment after graduation. Some choose entrepreneurship out of necessity, while others are motivated by a desire to pursue an innovative idea or create a sustainable income source.
This article will explore the most significant obstacles faced by student business owners in Nigeria and provide insights into how they can be addressed.
Student entrepreneurs in Nigeria face unique challenges that require grit, resourcefulness, and determination to overcome. Starting a business as a student presents difficulties that non-student entrepreneurs may not encounter. The key challenges faced by student entrepreneurs in Nigeria include: lack of funds, lack of support, limited business experience, time constraints, legal and regulatory barriers, limited networks, inadequate infrastructure, social and cultural attitudes, among others.
1. Inadequate Infrastructure
One of the major challenges faced by student entrepreneurs in Nigeria is inadequate infrastructure. Nigeria's infrastructure is still developing and remains poor compared to many other countries. This poses significant problems for young business owners.
Specifically, Nigeria struggles with providing consistent electricity, Internet connectivity, transportation networks, and other basic services needed to run businesses effectively.
2. Lack of Funds
Starting and running a business requires significant upfront capital and ongoing funding.
The high costs associated with registering, launching, and operating a business can be prohibitive for students. Between incorporation fees, license/permit costs, equipment purchases, inventory, marketing expenses, and other startup costs, the required investment can easily run into the hundreds of thousands of Naira. This poses a major barrier for student entrepreneurs who do not have substantial savings or income sources.
Access to funding through loans or investors is also constrained for students.
Banks and other traditional lenders are generally reluctant to provide business loans to students due to perceived higher risks. And venture capital funding rarely flows to first-time student founders who have no track record to evaluate. Many promising student-run enterprises fail to get off the ground due to insufficient capital and cash flow.
Overcoming financial obstacles is vital for students to succeed as entrepreneurs in Nigeria. This may require pursuing grants, competitions, microloans, personal/family funding, and other creative financing solutions. Developing a solid business plan can also help attract potential backers and partners. But lack of access to substantial capital remains a hindrance for student entrepreneurship.
The electrical grid in Nigeria is notoriously unreliable, with frequent blackouts that can last for hours or even days. This forces entrepreneurs to spend significant sums on diesel generators and fuel in order to keep their operations running. Unstable electricity damages equipment, disrupts workflows, and generally inflates costs.
4. Social/Cultural Attitudes
Many student entrepreneurs in Nigeria face challenges stemming from social and cultural attitudes about entrepreneurship. Specifically, entrepreneurship is often seen as an overly risky endeavor by students' families.
Parents and family members may discourage students from becoming entrepreneurs out of concern that it will distract from their studies. There is a belief that students should focus solely on their degrees rather than dividing their time and energy.
Additionally, entrepreneurship is not always viewed as a stable or prestigious career path. There is a perception that stable professions in areas like engineering, law, and medicine are more respectable. Families may pressure students to pursue these safer, traditional options.
Students have to overcome skepticism from family members who think pursuing business ventures will jeopardize their futures. Changing these cultural mindsets presents challenges for young Nigerian entrepreneurs.
5. Lack of Support
Many student entrepreneurs in Nigeria lack adequate support systems to help guide and nurture their entrepreneurial journeys. Nigerian universities frequently do not have a strong culture of entrepreneurship, with few programs or initiatives aimed at promoting student business ventures.
Without access to mentors and advisors, student entrepreneurs miss out on invaluable advice, insights, and networks that could increase their chances of success. They have to learn through trial and error instead of benefiting from the lessons and expertise of others. The lack of an entrepreneurial environment also means limited exposure to role models and success stories that inspire and motivate young founders. More needs to be done at Nigerian universities to build a culture that nurtures student entrepreneurship through coaching, incubators, competitions, and other initiatives.
6. Time Constraints
One of the biggest challenges faced by student entrepreneurs in Nigeria is finding enough time to run a business while also focusing on their studies. Student entrepreneurs often struggle to balance their academic workload with the demands of starting and managing a new venture.
Juggling these competing priorities can be extremely difficult, especially for student entrepreneurs who are just learning how to manage their time effectively. Many student entrepreneurs lack strong time management skills, which are essential for achieving balance. Without discipline and organization, student entrepreneurs can easily become overwhelmed and fall behind on their studies or business responsibilities.
Developing stronger time management abilities and balancing skills is crucial for Nigerian student entrepreneurs to thrive.
7. Legal & Regulatory Barriers
Nigeria's legal and regulatory requirements pose significant challenges for aspiring young entrepreneurs. There are numerous bureaucratic procedures involving various government agencies that students must navigate. This places a heavy compliance burden on budding student startups with limited resources.
Registering a company in Nigeria requires completing various forms and approvals across multiple agencies like the Corporate Affairs Commission (CAC), Federal Inland Revenue Service (FIRS) and others.
Overall, the complex registration processes and high compliance costs represent a major difficulty faced by students entrepreneurs getting started in Nigeria. Nigeria ranks low globally in ease of doing business rankings due to these cumbersome procedures and costs. Significant reforms are needed to simplify bureaucratic requirements and reduce the barriers to starting youth-led enterprises.
8. Limited Networks
Many student entrepreneurs lack connections to angel investors or venture capitalists who could potentially provide startup funding. They have to rely on competitions, grants, personal loans from family, or their own limited savings. Building relationships with experienced professionals takes time and most students have not had the opportunity to do that yet.
Expanding their professional networks should be a priority for student entrepreneurs. They can do this by attending industry events, conferences, joining organisations, cold emailing/messaging potential mentors, and leveraging their school's alumni network. Building connections early on will pay dividends down the road.
Student entrepreneurs in Nigeria face a number of challenges as they work to get their businesses off the ground while pursuing their studies.
Taking business, entrepreneurship, and management courses can fill in some of the knowledge gaps when it comes to running a successful company. Scheduling, time management, outsourcing, automation, and balancing school and business demands are all strategies to deal with limited time. Knowing the legal landscape and regulatory requirements can help avoid issues. Expanding networks both digitally and in person can open up new opportunities. And shifting societal mindsets to be more supportive of young entrepreneurs can remove stigma.
Ultimately, supporting and encouraging student entrepreneurs is vital for Nigeria's economic growth and development. With the right assistance and policies in place, the nation's students can start and grow promising ventures that provide jobs, innovation, and solutions for the country. Overcoming the challenges faced by these ambitious youth will lead to greater prosperity and success stories throughout the Nigerian entrepreneurship ecosystem.
Lawunmi A Nwaiwu is an Executive TV producer of the The Moment of Truth Nigeria Business Reality Show and Author.