10 Mar How to Start a Profitable POS Business in Nigeria in 2021
POS business is a lucrative way to make money in Nigeria. It’s even more lucrative in areas where banks do not exist or insufficient ATMs to meet the financial needs of the people.
Besides being a profitable business you can start, it can also be a vital passive income stream.
By definition, a business is an organization or enterprising entity engaged in commercial, industrial, or professional activities.
Nigerians would, however, define a business as any legit activity that would generally involve a means through which one makes money. Money made for services rendered or goods sold.
Lewis Henry defines business as “Human activity directed towards producing or acquiring wealth through buying and selling of goods”.
Consequently, the business has to do with continuous productivity in a line of interest. A business is usually formed by one or two people who entertain a common idea that should be productive enough to raise profit.
Nigeria has a lot of businessmen who are very popular for the lucrativeness of the POS business currently. Hence, it is important to note that the sole purpose of a business is to make a profit.
No matter how little, profit is subject to growth is proper sales methods and techniques are practiced.
- 1 Benefits of POS (POINT OF SALE) Business in Nigeria
- 2 Type of Business for Your POS
- 3 How to Start a POS Business in Nigeria
- 4 Conclusion
Benefits of POS (POINT OF SALE) Business in Nigeria
The POS Business in Nigeria can be very profitable and here’s why:
Also, the vendor can now credit your account directly at the point of sale.
2. Nigerians want it easy
Therefore, having a POS would fetch your business huge profit because Nigerians want it easy. That is to say that, they would prefer to rush to your point and pay for your service, rather than wait out a machine.
3. Bill payments
Usually, these service centers are busy and crowded and quite distant from a high percentage of customers. Customers won’t have to stress themselves finding these offices and heading there if you had your POS Business up and running.
In addition, all these bills can be paid for and fully approved from your POS machine, and with the aid of the POS Receipt.
POS Receipt is an archive that regularly contains the date and time of procurement, point of interest of things purchased as well as price tag etc.
Perhaps, to know how to start a profitable POS business in Nigeria, you must first understand what kind of business it is.
Type of Business for Your POS
“You cannot run every business.”
“There are different shoe sizes in the market for different persons with different shoe sizes”
Above are some popular African proverbs that have passed down through generations. It is important to also understand that there are 4 main types of Businesses and you should always choose the size of your POS business in Nigeria.
This type of business is easy to form business. It is such a business that gives you total control over your assets and liabilities, as well as profits and losses, etc.
In the sole proprietorship kind of business, you can be held personally liable for all debts and unfulfilled obligations. If you fail or succeed you have no one to thank or blame but yourself.
Hence, such a business is entirely dependent on the owner and the owner’s decisions.
Still, the advantages of a sole proprietorship business would include the fact that all profits are yours. You do not share your profits with anyone. All you have is yours alone. Your gains!
Also, there is little or no regulation at all as to how you run your business. Your rules alone. You resume when you wish to.
The best part of it, you dismiss when you wish to while keeping all the profits. Hence there is so much flexibility to explore. Therefore this makes the POS business in Nigeria unique.
If you intend to run a sole proprietorship kind of business, also note the requirements are often very few when compared to trying to run other types of business that will be discussed later on here.
Disadvantages of running a sole proprietorship kind of business
Other types of businesses for your POS business include:
In the partnership kind of business, there are two categories or types: there is a general partnership and the limited partnership.
A general partnership is one in which two or more owners of the business share business responsibilities. They invest their money, property, labour, interest, to the business with the sole aim of making a profit. Therefore, they are responsible for 100% of business debts as well.
On the other hand, Limited Partnerships strictly involves partners limited their own liability for business debts according to their portion of ownership and investment.
Perhaps the difference between the general and limited partnerships would be;
The general partnership does not require a formal agreement between partners. In addition, the agreement could be verbal or discreet between two business owners. Whereas, limited partnerships require a formal agreement between the partners and in most cases other relevant documents.
A corporation is a large company or group of companies authorized to act as a single entity and recognized as such by law. The corporation is a legal entity that is separate from its owners.
Consequently, they can be taxed and held legally liable. Any income distributed to the shareholders as dividends or profits are taxed again as the personal income of the owners of the business. Corporations are costly.
Limited Liability Company
They are the most flexible type of business combining aspects of both partnerships and corporations. A major advantage is that they do retain tax benefits of sole proprietorship and the limited liability of corporations.
Therefore, the POS (Point of Sale) is a sole proprietorship kind of business and it is very lucrative in Nigeria.
How to Start a POS Business in Nigeria
This lucrative business began in the year 2013. Also known as Agent banking. This implies that one of the first requirements would be to have an active bank account.
It involves a bank agent who runs a retail outlet. Such a person is permitted to conduct transaction relating to finance, allowing customers to deposit, withdraw, transfer, recharge, pay merchant bills, make certain account inquiries, etc.
Importantly, the POS business is cash attracting business that has been going on for a while. However, it is now gaining a lot of popularity in rural areas, semi-urban areas, areas that are not fully taken over by banks, etc.
Moreover, it is a very good substitute for bank cash withdrawals, etc. It is mostly used by small businesses, supermarkets, saloons, as well as shops and more.
The following steps are the best recommendations if you wish to start a lucrative POS Business today in Nigeria:
1. Have an active bank account
2. Source a Good Location/Start a Mini Business
Acquiring a shop in rural areas will not be as expensive as it would be if you decide to acquire a shop in urban areas. It won’t cost you so much to get the location sorted out.
Furthermore, it is possible to partner with someone who already has an existing shop/business and pay a certain commission as agreed. Importantly, to make a profit, such as location must be favourable to your business as well.
Strategic locations like bus stops, markets, etc. are a perfect spot for any POS business. It would be very unwise to sit close to a bank that is fully functional with a lot of ATM points.
Also, note that you would usually have a lot of money, strategically choose a location that is not receptive to thieves and robbers.
3. Get Registered with CAC (Corporate Affairs Commission)
Also, registering with CAC is not as difficult as a lot of people term it to be.
Major requirements include;
4. Acquire POS Machine
Visit your bank to know the specifics, but popular review suggests you will need to provide the below:
You can also opt to purchase a POS machine from POS Vending Companies in Nigeria. Some of these vendors/operators are:
These vendors sell their POS Machines to you, their prices are usually different, contact them to know more, or visit their websites.
5. Have Sufficient Capital for Transactions
6. Advertise/Offer quality Service
Certainly, POS Business in Nigeria is very lucrative and can draw in daily profits. Consider it today to make more money than you do now.
Harrison is a Seasoned Digital Marketing Consultant, Tech Enthusiast and Entrepreneur. He has a great passion for helping businesses of all sizes to leverage contemporary digital marketing strategies. He is the digital marketing and growth hack consultant at Primegate Digital, a solution and growth-driven digital marketing agency in Lagos, Nigeria that is accelerating digital transformation in Africa. He is also the Content and SEO Strategist at Allstylefit