Starting a business in Africa is much like starting a business in any other country. It takes a vision, a plan, funding, paperwork, materials and resources, marketing, and follow-through. This may sound overwhelming but keep in mind that everything doesn’t have to happen all at once. You just have to start your African business.
Growing a Business Where It’s Needed
A famous industrialist used the slogan, “Find a need and fill it.” It became part of his company’s brand. There is truth in that slogan, and it is a great way to begin your journey in developing an African business.
How to Start Your African Business
Through this blog I’m frequently asked by readers to recommend businesses to start that are lucrative. Most often, my answer is – find a solution to an African problem, this will considerably increase your chances of having a successful African business.
First, look at what you know about a given community, country, or region and its existing businesses and entrepreneurial climate. Then consider who you know. Developing your network of local business connections, government leaders and potential customers can help you:
- Become knowledgeable about business opportunities in a focus area.
- Build business relationships, look for opportunities to mentor and be mentored.
- Identify the licenses, permits, registration(s), and other legal processes that must be completed before you open your doors for business.
Do you already know what some of the expanding industries and opportunities in Africa are? Like other emerging countries, medical/pharmaceuticals, IT, and tourism are growing industries. Africa also has opportunities in sustainable agriculture and renewable energy. Expatriates are increasing in number as is their need for personal service providers. Does your proposed enterprise fit into one of these emerging industries?
So, again, what do you know and/or do that can be transformed into a business opportunity in Africa?
Start Your Business Plan
Once you have identified your African business idea(s), it is time to write your business plan. This will be your road map to success and the vehicle you will use to influence prospective investors and lenders to help fund your African business venture. Your business plan should clearly state these things:
- Your vision of the business and what you expect it to accomplish.
- A statement of your prospective market and its potential. This statement also should offer a summary assessment of your competition so that you and your investors can more clearly understand the risks and potential.
- A statement of start-up costs and what will be required to keep your business operating for 1-2 years.
- Your benchmark points – how you will measure your successes like first quarter achievements, etc.
- A clearly defined goal.
- A description of the key members and their roles in your organisation.
- Market analysis.
- Marketing strategy.
- Financial projections.
- Funding request.
There are many ways to learn about developing a business plan including online publications and courses, seminars, or being mentored by an associate.
Funding Your African Business Venture
Funding is essential to your African business venture. As you plan to start a business in Africa. If yours is a shoestring budget venture, you may need to secure capital from more than one source. Funding is available at different levels and from diverse sources. Consider some of these funding opportunities:
- Private equity often launches a new business, especially small business enterprises. You, your friends, and your family network may all become the first contributors to your funding.
- Angel investors are increasing in number and venture funding activity. These individuals invest their personal funds in a business in exchange for part ownership equity in that business.
- Small business administration loans are available in some communities and through some government resources in Africa. Learn how to qualify and apply for these loans where you plan to be doing business.
- Financial institutions may also partner with SBAs to offer small business loans but evaluate and compare rates and terms between banks and lending institutions.
- Crowd funding is an increasingly popular source for business start-ups. Crowd funding knows no geographic or national boundaries. Use one of the crowd funding online platforms designed for African enterprises or start your own group.
- Friends and family are more flexible than other lenders. They may offer loans without security or agree to a longer repayment period. However, any misunderstandings about your arrangement could damage your relationship, so it’s important to formalise your arrangement with a written agreement.
Market Your African Business
There are numerous marketing plans and strategies in the business world. You can learn about them online and through courses and seminars. And keep in mind that the African demographic is young and increasingly savvy about mobile device usage. One of your most important marketing tools today is the effective and creative use of social media. Learn to use social media to expand and interact with your support network and build your business market.
Take Care of the Legal Paperwork
If you don’t take care of the legal obligations and paperwork of establishing your business, you may not have it for very long. Every local and national government has requirements for doing business within its boundaries.
Registering your business, no matter how small it may be, should be a top priority. If your business doesn’t legally exist, how can you protect it, prove that you own it, benefit from and grow that business?
Start Simple, Start Small, but Start!
Starting a business on a small scale is every bit as important to the economy of Africa as are major enterprises. Africa needs enterprises of all sizes and interests, and the climate for growing a business in Africa is increasingly favourable. Look for ways your product or service can benefit others – find that need, and fill it – in Africa.
Don’t delay, start your African business today.
If you have any questions about any of the information in this blog post, let me know! Leave me a comment below, and I’ll try to answer your questions.