It is true that many Nigerian businesses are not registered with the Corporate Affairs Commission, as a matter of fact, this is quite common with small businesses in particular.
The question we are asking today is why? Is it because these businesses simply don't care about registering their business? Is it because it's too expensive to register a business? Is it because these businesses don't know how to start a business registration process? In curiosity, we spoke to 100 businesses, and guess what! Apparently, over 60% of these businesses want to register their business - but see the twist…
Nigerian Business Owners Want To Open Accounts
To answer the big question, yes Nigerian Business Owners want to get their business registered. Speaking to our prospective business owners showed us everything we had been missing; small businesses are not negligent in registering their businesses as legal entities. It is just that 47% of unregistered businesses are oblivious to the process of actually registering their business. And from the batch of registered businesses out there, we found that at least 48% of them were only able to get registered with the help of a lawyer—again, also oblivious to the fact that business registration has been made easy in 2022.
When do Nigerian Business Owners Register Their Business
In addition to understanding that small businesses do want to get registered, the survey brought up a behaviour pattern that is relatively common amongst businesses.
From what emerged, 20% of businesses don't get registered or even consider getting registered until their businesses are 5 years plus in.
Some businesses choose to run their business unregistered for this long because they are sceptical about the success of the business, while some others never intended the business to last for a long time in the first place and only start considering registration after they realize the value of their business.
The downside to this late registration is of course missing out on certain grants and awards they should be eligible for but cannot access and some other disadvantages like those we covered in this other article here.
Nigerian Business Owners and Business Registration Cost
The survey data showed that getting a CAC registration was expensive; 17% of registered businesses paid up to N30,000 or more to get registered. That's a lot of money for a piece of paper, especially when it's approximately the same as entry-level wages by government standards.
The obtuse and stagnant process of registering a business is undeniably a turn-off for most small businesses. Our data shows that 55% of small businesses waited over 7 days to register their businesses.
For something which establishes the legal authority of small businesses and is at the foundation of small business owners getting business accounts, applying for grants and scaling, the process and cost of getting this done, make small businesses reluctant.
That's why we built Kippa start so that every business can get registered easily. A place where you don't have to deal with lawyers and unnecessary stress; get your CAC Certificate in 3 - 7days for N15,000 only.
Register a business with Kippa Start here