Advantages and disadvantages of Nano business

Nano business is the new frontier to economic growth for many developing countries. It provides a means of livelihood to those who engage in them. In this article, we explain the advantages and disadvantages of nano businesses in Nigeria.

1. What's Nano business

A nano business is an entity other than a micro business. From the word nano, meaning tiny, individuals who own a nano business are solopreneurs. We can say that this is a form of business organization that is formed and operated by one person with a turnover of 3 million Naira and, at most, three employees.

Individuals can form it as a side hustle. For example, a banker sells corporate wear through his/her WhatsApp status. An individual freelancing on Upwork while working as an accountant in a retail company. Nano enterprise can also be operated full-time.

This is true of various homemade fashion designers, independent dispatch riders, vendors on the street and market, POS centres, local graphic designers, hairdressers, painters, dry cleaners, and market women on the street and in rural/urban markets, among others.

2. Advantages of Nano businesses

2.1 Source of income

Nano businesses are a means of livelihood for people either full-time or part-time. Individuals with skills such as hairdressers can have daily earnings, thereby improving their standard of living. Also, as a side hustle, corporate workers can earn extra income carrying out solopreneurship.

2.2 Promote economic growth

This business gives more people the opportunity to work. And if their activities are properly recorded, they can be included in the GDP of a country. As A result, it contributes to economic growth. 

2.3 Means of Employment

Owners of these enterprises can employ people to work for them either full-time or part-time. In Nigeria, such a business is made up of three employees. 

2.4 Require very little capital

A minimum of 50,000 to 100,009 Naira can be used to start a Nano enterprise in Nigeria. In some cases, just a few tools are required to begin trading or rendering services.

3. Disadvantages of Nano businesses

3.1 Regulations

Regulatory authorities may affect nano business activities. For example, currently, all POS operators in Nigeria are required to register their business with the Corporate Affairs Commission. 

These operators include individuals who are solopreneurs. Although regulation is not an evil task, it implies that they must bear additional incorporation costs if they must remain in business or risk losing their means of livelihood. 

3.2 Informal business

All Nano enterprises fall under the informal sector. As a result, they lack formal procedures and policies. More so, financial records may not be kept by these entities. This may result in a loss of revenue, cash, and fraud from their employees.

3.3 Environmental hazard 

Many solopreneurs have little or no knowledge about the environmental hazards that affect their jobs. For example, the vulcanizer on the street may not see it is important to wear a face mask and gloves while performing his duties. 

3.4 Isolation by government

The government may not provide the necessary infrastructure that can help Nano businesses to thrive. Good roads and electricity may not be available at some locations where citizens who are solopreneurs carry out their jobs. 

Also, rural markets might face infrastructure deficits. Therefore market traders on those markets may not have the necessary social amenities they need to perform their business activities.