Most investors in Nigeria are not in the business of gambling on hype or vibes. They’re not interested in handing out money just because you’ve got an innovative idea or a catchy brand name. They’ve seen too many businesses crash within their first year. And in a country where power supply, FX rates, and policy shifts can flip your fortunes overnight, their caution is more than justified.
According to data from the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), over 80% of small businesses in Nigeria fail within the first five years. That stat alone will make any serious investor pause and take a hard look before signing a cheque.
So, when Nigerian investors evaluate a small business for funding or acquisition, they’re looking past fancy pitch decks and clever slogans. They want clear proof that the business has structure, staying power, and space to grow.
Be it an entrepreneur in Minna, a side hustler in Jos, or running a family enterprise in Enugu, this article will show you what investors are really checking for and how to make your business stand unique.
Key Things Investors Consider Before Acquiring a Small Business
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1. A Solid Business Model That Can Survive Nigeria’s Chaos
Let’s start with the most critical piece: your business model. How does your business make money, and can it keep making money even when things go south?
Nigeria is not the easiest place to run a business. One month you’re profitable, the next you’re dealing with fuel scarcity, dollar shortages, import bans, or a random hike in electricity tariffs. The reality is: if your business only thrives when things are perfect, you’re in trouble.
Investors know this. That’s why they want to see:
• How your business earns revenue (products/services, pricing model)
• Your main cost drivers (logistics, labor, import duties, rent, etc.)
• How much profit you retain after everything (your margins)
More importantly, they want to know how you’ve adapted when things didn’t go as planned. Did you switch suppliers when the dollar rose? Did you move from importing to sourcing locally? Did you adjust your pricing strategy?
A business that can survive a few hits without folding is 10x more attractive than one that only looks good on paper.
Action step: Create a simple breakdown of your revenue streams, cost structure, and monthly margins. Be honest about your risks and show how you’ve navigated them.
2. Growth Potential That’s Backed by Evidence
No investor wants to buy into a business that has peaked.
They’re not just investing in what your business is today, they’re investing in what it could become in the next few years.
This doesn’t mean you need to present a grand, billion-naira plan to expand across Africa. What matters more is that you can clearly show:
• A real opportunity to grow
• A roadmap on how to do it
• That growth doesn’t depend on the founder working 90 hours a week
For example:
• Can you open another outlet in Abuja or expand to online sales?
• Can you introduce new digital offerings or create subscription packages?
• Can you increase margins with automation, local sourcing, or bulk pricing?
If your answer to “what’s next?” is vague, investors will move on.
Tip: Use data to back your vision. Show rising customer demand, industry growth stats, or market gaps that your business is positioned to fill. You can reference platforms like Statista, NBS reports, or even your internal customer feedback.
3. A Brand Nigerians Trust (and Keep Coming Back To)
Your brand is your reputation and in Nigeria, reputation is currency.
You don’t need to be as big as Innoson or Flutterwave. What investors care about is whether your business has goodwill in your community or niche. Do people trust you? Do they come back? Do they tell others?
Investors want to know:
• Do customers say good things about you on social media or review sites?
• Are your products/services consistent in quality?
• Do you have high customer retention?
Word of mouth is everything in Nigeria. And while marketing helps, nothing beats loyal customers who vouch for you.
If your business is respected in your area, maybe you’re the go-to suya spot in Ibadan that matters. It tells investors they’re buying into more than just assets. They’re buying credibility.
Action step: Start tracking customer feedback. Collect testimonials. Respond to Google reviews. Post screenshots of happy customer messages. This adds real, visible value to your brand.
4. Clean Books and Transparent Finances
Now this one’s a deal-breaker.
If you walk into an investor meeting and can’t clearly show how much your business earns, spends, and keeps, the conversation ends before it begins.
Messy books are one of the top reasons Nigerian SMEs miss out on funding.
Even if your revenue is decent, unclear numbers make you look unserious. Investors want to see:
• Clean income statements, balance sheets, and cash flow reports
• Financial records for at least the past 2–3 years
• Predictable revenue patterns, not wild swings month to month
If you can’t explain why your sales dipped in June or why your expenses spiked in March, investors won’t waste their time.
Fix it:
• Use tools like QuickBooks, Excel, or even bookkeeping apps like Kippa or Bumpa.
• Hire an accountant or part-time bookkeeper if needed.
• Separate personal expenses from business spending.
This is not just about impressing investors, it’s about truly understanding your own business.
5. A Team That Can Operate Without You
Too many Nigerian businesses are founder-dependent. If the owner travels, falls sick, or gets overwhelmed, everything grinds to a halt.
That’s not attractive to investors. They want to know the business can function even if the founder steps away.
This means:
• Roles are clearly defined (sales, operations, finance, etc.)
• Team members or freelancers know what to do
• Processes are documented and repeatable
Even if you’re running a lean operation, you can still build structure. Maybe you’ve trained someone to manage orders while you focus on marketing. Or you’ve hired a VA to handle customer support. That’s progress.
Start now:
• Document how you do things, from onboarding new clients to handling complaints.
• Assign real ownership to team members, even if it’s a small crew.
• Think about succession, who can step in if you’re unavailable?
A buyer wants to step into a business that works, not build one from scratch.
6. Clarity Over Perfection
Here’s something many Nigerian founders get wrong: they try to impress investors with perfection. But the truth is, smart investors don’t expect perfection, they expect clarity.
They want to know:
• What’s working
• What’s not
• And how you’re dealing with it
So, don’t hide the fact that you had cash flow issues last year or that a product flopped. Instead, show what you learned and what changes you made. Investors respect founders who are self-aware and proactive.
If you pretend everything is perfect and investors sense gaps, you lose credibility.
7. Timing and Readiness Matter
Even if your business checks all the boxes, timing still matters. Some businesses are great but they’re not ready for investment or acquisition just yet.
So here’s what you can do:
• Get investor-ready before you actually need funding
• Put systems in place now so you’re not rushing later
• Create a “data room” with all your documents: business plan, financials, tax records, contracts, staff roles, etc.
Platforms like Paritie Innovation Hub now offer ways to get visible to investors. But you only get one shot to make a first impression. So be ready.
Conclusion
Whether you’re preparing for investors, a strategic buyer, or a business partner, now is the best time to start making your business more valuable.
If you wait until you desperately need capital, you’ll likely cut corners or rush. But if you start early, clean your books, systemize your operations, build brand trust, you’ll be in a position of strength when the time comes.