Manufacturing bolts and nuts is a highly profitable business in Nigeria. It has less competition compared to other businesses. All you need is a little experience and a reasonable capital and every other thing will fall in place.
Now let’s skip to the finale. How do you start a bolts and nut business in Nigeria if you are already eyeing the prospect?
First off, you might want to ask yourself is a bolts and nuts business in Nigeria worth it?
What are the risks? We will help you figure them out.
Now you will want to research the market by penning down your target consumers and competitors as well.
The next step is to choose a business model in line with your goal: it could be a partnership with a colleague or a sole proprietorship where you claim the full title of your business, also it could be a joint venture by pairing with a similar business.
The next wisest thing to do is get your business licensed; either by the CAC(Corporate Affairs Commission or the SON(standard organization of Nigeria).
Also, a little research about the proposed location for your business will help you ascertain the nature of the location and how close it is to the raw materials needed for production. In the course of this article we will build upon all key points just highlighted line by line.
Let’s get started.
Table of Contents
A Brief Introduction to Bolts and Nuts Business in Nigeria.
Bolts and nuts are critical materials most industries(Micro, Small, Medium, and Large) rely on. All crucial sectors from automobiles, power, transportation, and construction, and down to the furniture maker in your neighborhood feed on both materials.
It’s a low-key trend that will last long enough for anyone venturing into the business to flourish. No need for academic lingo, let’s get on to how to get started running a bolts and nuts business in Nigeria.
How to Start Bolts and Nuts Business in Nigeria
Starting a bolts and nuts business doesn’t depend on technical certificates, just a basic knowledge of the specifics is needed. You can even hire brains to do the technical aspects of the business. To start a bolts and nuts business in Nigeria these steps should be followed(not necessarily in chronological order).
Do market research;
You don’t want to start a business where everything comes down crashing.
So to prevent this mishap you should do proper research on the following.
Profitability: how profitable are bolts and nuts in Nigeria? This question triggers you to do a little investigation on the demand for bolts and nuts in Nigeria.
From the onset of this article, we understood that almost every sector(power, construction, transportation) relies heavily on these fastening materials. Hence illustrates their profitability.
Customers: now the next thing in line is to determine who your target customers are. You can’t sell bolts and nuts to bakers or farmers. Then who are your target consumers? They can be found in the construction and manufacturing sectors just like yours. These sectors either need these materials to fasten their finished products or they also purchase and distribute to the sub-consumers ( like the local furniture and mechanics in your neighborhood).
Competitors: the grandest mistake you will make when starting this business is not penning down the numbers of businesses doing the same things as yours. From competitor research, you get a lot of information, from their supplier, customers, and distribution channels down to their products’ selling price.
Of course, some of this information is kept under the wraps but you can still unwrap a few and make the most of them.
For example, you can take on the current selling price of your competitors and use the information to set your rate. You can even bring down your price to edge out your competitors. You can also research the quality of their products and double up yours to have an edge at getting more customers.
Have a Unique Selling Point
Unique selling simply means an uncommon trait that sells your business out as the best fit for consumers. This point puts your products ahead of other competitors in the bolts and nuts business.
Unique selling could be certain benefits your competitors never offer that could make their intended customers come to you. Unique selling could be in three forms:
Quality: look at it this way, you discover that the majority of industries complain of counterfeit bolts and that your competitors’ nuts break off easily and quickly lose windings. Now you could use this as a unique selling point by emphasizing your focus on ensuring a quality product you can also go further by offering free testing to ascertain your claim. Who wouldn’t trust you?
Price: the fastest way to get your competitor’s customer rushing to your doorstep is slashing down the price of your fasteners(don’t slash too low, it will be mistaken for a scam). Get these tactics the wrong way and you will have yourself to blame.
The wrong way in the sense of providing low-grade materials at a cheaper price. You can also pull this off by price matching, free shipping, giving discounts for bulk purchases, and offering season offers. All in all, quality plus fair pricing is a good combo.
Service: ‘Nigerians never forget’ Make a grave mistake and you will forever be remembered. Provide a good user experience, be patient, and have good customer service your counterpart never provided.
The bottom line is to focus on the pain points of your target markets, provide the solutions, and watch as they flock to your doorstep.
Research your Business Location
The very next thing to consider is where to locate your business. Here are the possible things to consider:
Topography: choose a location that is very well-leveled and suitable for your manufacturing business. It shouldn’t be an area where you will have to make extra expenses leveling the surfaces and breaking huge rocks. Also, make sure the location is not too far from residents and make sure the roads to your industry are easily accessible.
Closeness to raw materials and other useful services: ensure that the location is very close to the source of your raw materials, so also it should be closer to other useful services like power and water.
Very close to distribution centers: before choosing a location you should take a mental note of the possible distribution centers near you. Triangulate and get your business closer to them.
Security: this is very important, check if the location is safe and devoid of any tribal land dispute. You don’t get your business burnt down overnight.
Business Ownership Structure
Starting a bolts and nuts business in Nigeria isn’t different from other businesses across the world. As it is done, you need to decide what kind of business structure you want to operate.
If you are financially buoyant and ready to take all the risk, then sole ownership is very well recommended only that you will be required to pay self-employment tax and expenses are charged against your pocket.
But then, we don’t strongly recommend sole ownership if you are planning to expand like Bua or Dangote cement company. In this case, a partnership is very appropriate to save you the stress of shouldering responsibilities. With the structure, your liability is limited and you get a chance to get more capital and pick many brains.
Get the Relevant Paperwork
Paperwork or licenses is a legal permission granted to a business to be able to operate in a specific location. It could be a business license, factory license, environment license, and lots more which will be discussed shortly.
Is Bolts and Nuts Business in Nigeria Profitable?
The bolts and nuts business is highly lucrative in Nigeria. This is at a time when Nigeria is making to take the forefront in infrastructural development. This change also spreads across both national and local levels even down to the micro-manufacturing and coupling units in your locality.
And of course, most manufacturing industries rely solely on coupling materials like bolts and nuts for binding finished products.
The good news is that this business doesn’t have as much competition as you might imagine. Just do your research and we believe you are at the right place to get the required information. This extensive guide got you covered.
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What you Need to Start Bolts and Nuts Business in Nigeria
Capital: as with all business good capital is needed to set a business towards the dream objective. The amount of capital depends on the size and scale of your business. You should factor in the cost of getting land, setting it up, obtaining paperwork, and purchasing the required equipment.
If it deems fit that you lack enough funds you can apply for a loan or better still pool funds together with other similar like-minded entities.
License/paperwork: as earlier discussed, a license is a legal certification granted to you by a body or government before you can operate.
Manufacturing businesses in Nigeria especially those related to steel are highly regulated so getting licensed is a prerequisite. Let’s look at the important ones;
Corporate Affairs Commission (CAC): the cost of registration depends on your structure of business. Suppose you are running a private limited ownership you can expect between 100,000(one hundred thousand naira) or more. You are required to submit two proposed names for your business for screening and approval. Other couple of requirements include email address, phone number of business, details of shareholders if any, and so on.
Standard Organization of Nigeria(SON): This is for post-incorporation approval. You commence with submitting your application letter which will be approved and then an officer will be sent to inspect your business to ascertain the quality of your products.
If you are clean you will be issued a certificate of conformity. The costs of registration depend on your scale of production.
Federal Inland Revenue Service (FIRS): this is mandatory for all manufacturing businesses in Nigeria. The first thing to do is to submit an application letter containing the business contact and address. Other include business seal, date of commencement of business, and your bank verification number(as the owner).
Manufacturers Association of Nigeria(MAN): to be eligible to register you are required to have registered with SON and NAFDAC plus making a profit of at least 100 million. You are also required to submit the certificate of incorporation of your business; business plan and a cover letter. The registration price varies from 5,000(five thousand naira to 10,000(ten thousand naira).
Insurance: getting insurance helps protect your business in case of any damages or devastating loss. You are fully covered in case of theft, equipment breakdown, and breach of security, to mention a few.
Machinery/equipment: sourcing and purchasing the appropriate machinery and equipment is one way to deliver the planned production output. The types of machine depends on your scale of production and the type of quality you seek.
Here are some primary equipment to consider purchasing;
- Screw rolling machines
- Lathe
- Milling machines
- Thread cutting machines
- Grinding machines
- Cutting gears
- Inspection gears etc.(check here for extensive knowledge of their tools
This isn’t an exhaustive list of the processes needed to start bolts and nuts business in Nigeria. But if you get the ones listed right, others will fall in place. Like, sourcing raw materials(steel, brass, aluminum, bronze, nickel, etc), picking a good location, creating a logo, and all and all.
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How to Grow Your Bolts and nuts Business in Nigeria
Build connections: building healthy relationships with other bolt and nuts businesses in Nigeria is very helpful to stay informed about current trends in the business. As the relationship grows stronger both businesses can partner and pool together their resources and sweat equity to achieve a common goal.
Build an online presence: in a time where digitalization has taken the front seat, losing out on all the advantages that come with it is a pure flop. You should first of all create a well and functioning website that preaches your business. Utilize social media platforms to grow your online presence this enables you to reach a wide range of audiences across Nigeria.
Capitalize on quality products: production of high-quality bolts and nuts will give you an edge over your competitors who settle for lesser quality. Hence this will send customers flowing like the ocean towards your business.
Stay updated: you don’t want to lose out on trending information. Sticking to sites similar to ours would always help you stay relevant in the bolts and nuts business in Nigeria. Others are
Invest in new technologies
Increase production
Invest in both skilled and unskilled labor.
Conclusion
Setting up a Bolts and nuts business in Nigeria is extremely lucrative because infrastructural development is now at the helm of other matters. Majorly all manufacturing and coupling industries need fasteners like bolts and nuts to fasten their finished products.
Setting up a bolt and nut business isn’t rocket science, just get good capital, get the appropriate documentation, and above all collaborate with other similar businesses to stay updated.
To get started you need to first analyze the market, research competitors, raise enough capital, and get licensed. You might also consider collaborating with businesses like yours, building an online presence, investing in quality products, and importantly, staying updated by sticking to websites like ours or any other sources.
FAQ
What is the timeline for processing licenses for bolt and nuts business in Nigeria
Ans: obtaining a license for your bolts and nuts business in Nigeria could take between 3- 4 weeks. However, it depends on the type of license you are applying for.
How can a Foreigner get a License for Bolts and Nuts Business in Nigeria
Ans: A foreigner can acquire a license almost the same way as a Nigerian citizen. A foreigner must possess these to be able to operate a bolt and nut business in Nigeria:
- Cooperation Affairs Commission (CAC)
- Business Permit
- Tax identification number(TIN)
- Tax clearance certificate
- Export Certificate
- Combined expatriate residence permit and alien card (CERPAC), etc.
Learn more.
How Much Does it Cost to Start Bolts and Nuts Business in Nigeria
Well, starting a bolt and nut manufacturing business in Nigeria can cost anything from-millions-billions-if not trillions. This is not to scare you off. It depends on the scale and scope of your business.
Remember you are factoring in the cost of getting a license, renting or building space, purchasing equipment and raw materials, and hiring staff plus other miscellaneous expenses.