Common Challenges Lagos Entrepreneurs Face & How to Overcome Them

Photo: pixabay.com

It’s a known fact that Lagos is Nigeria’s commercial capital, a city brimming with ambition, innovation, and relentless hustle. From the iconic markets of Balogun to the rising tech hubs of Yaba, Lagos sets the pace for business in Nigeria. Yet, for all its promise, doing business in Lagos is no walk in the park. Entrepreneurs face a host of challenges daily, from infrastructure gaps to policy roadblocks. In this article, we break down the most common struggles Lagos-based entrepreneurs face and practical strategies to overcome them.

1. Poor Infrastructure and Power Supply

Frequent power outages, bad roads, and underdeveloped transportation systems increase operational costs and reduce productivity. Many businesses rely on generators, which significantly impact profit margins.

The Solution:

• Invest in renewable energy options like solar power to minimize long-term expenses.

• Operate from shared workspaces with reliable facilities.

• Use cloud-based tools to reduce the need for large physical setups.

2. Limited Access to Funding

Securing capital is a major roadblock. Banks often require unrealistic collateral, and interest rates are prohibitively high for small businesses.

The Solution:

• Explore non-traditional funding options like fintech microloans, angel investors, and cooperative societies.

• Participate in accelerator and grant programs (e.g., Tony Elumelu Foundation, Lagos Innovates).

• Keep accurate financial records to build trust with lenders and investors.

  
  
  
  

3. Regulatory and Policy Inconsistencies

Entrepreneurs often face overlapping regulations from state and local authorities, sudden policy shifts, and unclear licensing requirements.

The Solution:

• Hire a legal or compliance advisor familiar with the Lagos business environment.

• Join business associations that lobby for favorable policies and keep members informed.

• Use digital platforms for tax filings and regulatory documentation to reduce exposure to human error or corruption.

4. Logistics and Traffic Congestion

Heavy traffic in Lagos disrupts supply chains, increases delivery times, and inflates logistics costs.

The Solution:

• Partner with last-mile delivery startups like Kwik, Gokada, or Sendbox.

• Utilize e-commerce platforms and offer digital products or services where possible.

• Create pickup hubs in densely populated areas to minimize delivery strain.

5. Hiring and Retaining Talent

Talent is expensive and mobile. Many skilled workers are either freelancing, job-hopping, or leaving the country altogether.

The Solution:

• Build a strong internal culture that fosters loyalty through mentorship, recognition, and growth opportunities.

• Provide flexible work options to attract remote-friendly professionals.

• Work with internship programs and training institutes to groom and retain junior talent.

Conclusion

Lagos may be tough, but it’s also rewarding. The city’s fast-paced energy is matched only by the resilience of its entrepreneurs. By being strategic, leveraging technology, and building networks, business owners can not only survive but also thrive in Africa’s most vibrant business hub.