The study was conducted to evaluate the relationship between the establishment of commercial venture and managerial effectiveness in federal universities in northwest Nigeria. It was guided by three (3) objectives questions, three (3) research questions and one (1) null hypotheses. A correlational research design was used for the study. The population of the study was 14811 which consisted of both lecturers 7118 and management staff 7693 of federal universities in the northwest, Nigeria. The sample of the study consisted of 702 respondents which were selected out of the population of the study using research advisors [2006] table. Structured questionnaires tilled Establishment 0f Commercial Venture Questionnaires (ECVQ) and Managerial Effectiveness Questionnaire (MEQ) were constructed by the researcher. The researcher designed the questionnaire based on five rating scale such as VHE, HE, ME, LE VLE. After validation, pilot test was conducted. 30 Copies of the questionnaires were administered to the respondents from Sokoto State University and Shehu Shagari University of Education who are not part of the sample respondents. The responses were collected and correlated using Cronbach Alpha statistical formula, using SPSS Version 30. The internal consistency of the instruments was determined using Cronbach alpha reliability.  The reliability coefficient for managerial effectiveness was 0.848. The researcher with the aid of five (5) research assistants administered the instrument to the respondents. Mean, percentage and frequency counts were used to answer the research questions while corresponding hypotheses were tested using Pearson Product Moment Correlation Coefficient (PPMC) using Statistical Package for Social Science (SPSS version 30). The study concluded that with little grant from the government, Universities can stand firm with the establishment of commercial venture. Hence every institution should invest in business as it is one of the sources of development. Vice Chancellor of Universities should be more vigilant and ensure effective monitoring and supervision of establishment of commercial venture so as to utilize the fund effectively. Funds which are generated internally by the universities need to be managed judiciously to achieve a holistic development of the universities.