Why smart businesses in Nigeria thrive ‘next to’ the right neighbours

Estimated reading time: 4 minutes

In the business world, the phrase “location, location, location” isn’t just a cliché—it’s the backbone of a thriving enterprise. In Nigeria, where the entrepreneurial spirit runs deep, strategically choosing where to establish a business can make all the difference between success and failure.

One compelling strategy is to set up your business “next to” complementary businesses or high-traffic areas. This principle has the potential to transform seasonal ventures into year-round successes, scale businesses more effectively, and ensure sustainability in a challenging economy.

Why “next to” works

Setting up shop next to an existing business or facility isn’t just a matter of convenience—it’s a viability study in action. Here’s why this approach is so powerful:

1. Shared Traffic:
   A car wash next to a shopping center benefits from the constant flow of shoppers. People who visit the mall often drive, and a car wash nearby can capture these customers who want their vehicles cleaned while they shop.
2. Complementary Needs:
   A barber shop next to a car wash provides a one-stop solution for busy customers. While their cars are being cleaned, they can get a haircut, maximizing their time and enhancing convenience.
3. Emotional Context:
   A flower shop near a hospital addresses emotional needs—patients, visitors, and staff often seek flowers for comfort or celebration. Similarly, a toy shop next to a children’s hospital brings smiles to young patients and creates an emotional connection with parents and visitors.
4. Built-In Market:
   A swimwear shop near a public beach naturally aligns with its audience. Visitors to the beach may forget to bring swimsuits or decide to upgrade their gear, making the shop a go-to solution.

Lessons for Nigerian entrepreneurs

Nigeria’s economic landscape presents unique challenges, including high competition, fluctuating consumer spending power, and infrastructural gaps. However, leveraging the “next to” strategy can help mitigate these challenges.

1. Overcoming Seasonality:
   Many businesses in Nigeria struggle with seasonality. A roadside fruit seller might thrive during mango season but struggle during off-seasons. By positioning the business near a busy market or a park, the fruit seller can attract a steady stream of customers regardless of the season.
2. Scaling Opportunities:
   The “next to” model inherently allows businesses to scale. For example, a small tailoring business near a bustling market can expand into ready-to-wear clothing or offer express services for busy shoppers.
3. Sustainability Through Community Integration:
   Positioning your business in proximity to other establishments fosters community synergy. A coffee shop near a co-working space in Lagos, for instance, could thrive as professionals crave convenient, high-quality caffeine fixes during their workday.
4. Low-Cost Viability Study:
   In Nigeria, where formal market research can be expensive, observing the customer flow in high-traffic areas offers a quick and cost-effective way to assess business potential.

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From idea to implementation

Implementing the “next to” strategy requires a shift in mindset. Entrepreneurs must view obstacles as opportunities. In Nigeria, where securing land or property in prime locations can be daunting, creative solutions like subletting small spaces, mobile setups, or shared spaces can be explored.

For instance, a mobile food truck parked outside a popular car wash offers a win-win for both businesses. Similarly, a kiosk selling accessories like phone chargers and power banks outside a busy motor park capitalizes on the needs of travelers.

Real-world examples in Nigeria

• Tech Accessories Stalls Next to Cyber Cafes: Cyber cafes are still popular in areas with limited internet access. Selling phone chargers, headphones, and USB drives nearby ensures a steady stream of tech-savvy customers.
• Snack Vendors Outside Schools: Positioned strategically near secondary schools, snack vendors enjoy consistent patronage during school hours and beyond.
• Laundry Services Next to Hostels: Near university hostels, laundry services thrive as students look for convenient ways to manage their laundry.

The key takeaway

The “next to” strategy is not a magic wand, but when implemented thoughtfully, it can reduce business risks and amplify opportunities. It transforms your location into a marketing tool, ensures a steady customer base, and aligns your business with existing demand.

In Nigeria, where innovation and resilience are vital for business survival, positioning yourself “next to” the right opportunity could be the smartest move you make. Remember, it’s not just about having a good idea—it’s about implementing it in the right place, at the right time.