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Posted by Felix Okoli on Thursday January 19, 2012 10:42:13:

It's a new year and prices of items in Nigeria both for goods and services have almost doubled already and no thanks to the effect of fuel subsidy removal by the govt.

Well, is fuel subsidy removal a good or bad thing? I think somehow it is good for our economy in the long term but in the short term, it would cause some hardships for people and this is really the sacrifice Nigerians may need to offer for the sake of their future. Anyway, this is not really about the morality of fuel subsidy removal or to decide who is wrong or right but our focus in 2012 should be on how to benefit from a petrol-induced inflation as the case is in Nigeria right now.

Prices of goods and services are already increased above 50% of their original value but does that mean you have to allow that to be an obstacle for you? On the contrary, for most people who run their own business, business has never been better as all they had to do is to increase their own prices too with the same margin.. Shikena!

Nigeria is a developing nation and you can't really make sustainable money in Nigeria enough to secure your future if you don't have your own business. The Nigerian economy for now favours people who can put their own prices for their goods or services. Yes, the Nigerian economy favours mostly those who have a capitalist approach. Don't think of what the govt can do for you but thins of what you can do for your country.

You could still keep your professional job if you have one but the truth is that salaries and remunerations are hardly increased in relation to inflation in Nigeria so it would do you good if you have alternate sources of income that are within your control and where you can dictate the price. You need to be your own boss to survive in a country like Nigeria.

Simple retail trading can really be successful
I recall a tv interview of a woman who sells food items such as tomatoes, rice and pepper and she was really not that educated or spoke the finest English. My guess was that she wasn't a graduate but what I loved about her was that she was the madam of her shop and she confessed that they make over N30,000 worth of sales each day but you could guess that she was only being humble with that figure and not giving the right amount. In a inflation ridden economy as ours, even transporters like Okada riders and danfo drivers could make a profit of over N200O daily and with this inflation, their prices have already increased and they could be making double that per day. So you see you don't have to be over educated to make money in Nigeria, you just need to know how to follow the trend and set the right prices for your business.

Investing in Nigerian stocks can also help hedge against inflation
Stock prices tend to rise as inflation happens in an economy so if you've got some money to spare but don't hav any spare time for running a small business, you could divert those funds into stocks by buying shares from the Nigerian stock exchange. You just need to meet with a stockbroker to buy shares in the companies of your choice. They would only charge about 4% of your transactions with them as their fees. So as prices of items rise, so also will your stock investments.

An example: Adding prices to your goods
If you were selling computer products like flash drives worth N1500 and you now have to consider the effects of inflation on your business such as transportation, feeding, staff and procurement, you could offset the increment by adding it to your selling price. Let's assume that fuel price causes you to spend an additional 20% on your sales business, you should then add 20% to the initial price you were selling the flash drive to give us N1500 + N300 = N1800.
So it can be easier for an entrepreneur or business owner to offset the effects on inflation by simply adjusting his prices

Tips to make money in an inflation
- Start up a business or think out a business idea that can make you money
- Try to be monopolistic or simply offer your products with some uniqueness to beat competition
- Adjust prices based on inflation rates
- Diversify
- Get longer term customers and don't make enemies with the customers you already have

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Comments:
Re: Start a small business to profit from an inflated economy Posted by Olaide Aderinola on Friday January 20, 2012 at 12:2:45:

nice write-up. send me your email address. thanx

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Re: Start a small business to profit from an inflated economy Reply by Michael Akinpelu on Friday June 22, 2012 at 18:36:45:

Nice. Please send me your email Address

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Re: Start a small business to profit from an inflated economy Reply by hans on Saturday August 18, 2012 at 14:31:53:

Hi
I am a foreigner that not live in Nigeria. I wanna invest in a company. How can I be sure that the co-owner really give me my share of profits. My profits needs to be sent by internet (paypal).

I thought of webcam in the shop, maybe software in the computers that clock the time computers are used.

want an idea on how to do this of people that actually live/now the culture. post me a reply on following topic:
http://www.nairaland.com/1020911/business-opportunity

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