Tips for launching a business in Africa
You would be amazed to know that 22% of African young adults are venturing into business, making Africa the world’s leading destination for entrepreneurship start-ups.
However, Starting your own business realistically on a continent like Africa is complicated than you think, where more than half of the people live below the poverty line.
If you are a beginner and want to solve the top 6 entrepreneurship problems, you need to read this article and have some knowledge about setting up a small business in Africa. All you need is the right strategy and some expert tips that will guide you through your way. Now the process of starting your own business is no more difficult with this guide.
Proven Successful Tips To Launch Your Start-up Confidently In Africa
1. Identify The Barriers First
To start with your business idea, you first need to know about the things that might stop you from moving forward. Some of the main barriers in Africa that can inhibit your start-up growth are lack of technological infrastructure, limited funding, market size, and strict regulatory framework.
Because of these factors, many talented individuals with a true entrepreneurial spirit leave the continent. But you don’t have to stress about it because a little understanding of the market dynamics and the right strategic approach can help you lay down the foundation of a successful business.
2. Know The Needs Of People
Establishing your business in Africa is different than starting your business in a developed country. Some of the sub-Saharan African countries are the world’s biggest diamond and copper producers. Still, more than 300 million people live in a deprived state because of scarcity, inequality in health and education, corruption, and low-income.
Since Africa has its own strengths, you have to be careful about the type of business you want to start. It would be better to pick an industry that is expanding at a faster rate but selling something that improves the well-being of people is a plus point and provides a natural feeling of contentment. For example, Sierra Leone’s easy solar wins global entrepreneurship award because the business improved the lives of people. You can sell solar panels as a lack of electricity is a serious problem in rural areas, which can be resolved with alternative energy sources.
3. Know Your Target Market
While some sub-Saharan countries are performing quite well, some countries are still caught up in the poverty trap. You have to tap the top markets with strong potential for growth and profits in the upcoming years. Morocco is a leading player in the renewable energy market and aims to secure 40% of the global market share by the end of 2020.
Next is Ghana, a country that has shown remarkable progress and economic growth because of its easy port access. Finally, Kenya is another top destination in the African continent with a diversified economy. The recent developments in technology and transportation infrastructure have opened new roads for the country’s growth and prosperity.
4. Comply With The Legal Requirements
This is indeed a very important point not to be missed. No matter if you are a citizen of Africa or a foreigner, you must know the legal aspects of starting a small business in South Africa. Firstly, to register your new Africa-based start-up with the Companies and Intellectual Property Commission (CIPC), you have to address all the legalities and official protocols.
Among the several tips for beginning start-up, one is developing an understanding of the employment regulations and complying with the business laws. By following these rules and regulations, you can not only prevent yourself from legal troubles, but you can also get support from government agencies and develop the right brand image among locals.
5. Do Some Math For Fundraising
You need to think hard about securing capital for a start-up because this is all you need to transform your dream into reality. Identify options from where you can obtain funds on zero or low-interest rates. Instead of taking loans, it is always a better idea to ask friends and family for funding.
However, there are some other options as well that you can consider, like the TEF Entrepreneurship Program, a platform that offers grants and networking opportunities to entrepreneurs. Over the past few years, approximately 3000 fresh entrepreneurs have been received financial assistance and coaching for their Africa-based venture.
To become eligible for this grant, you have to prepare a robust business plan as ventures are approved based on selection criteria, which evaluate the uniqueness of the business idea and your leadership strength.
6. Take Advantage Of Social Media
The single most issue faced by every small business owner is not having enough marketing budget to promote the product or service to the target market. On the other hand, you cannot skip this step because advertising and promotion is a crucial element for establishing brand identity.
And more importantly, how would everyone know about your new company if they don’t see your ad or heard about you? So if you are tight on pocked like other entrepreneurs, there are some easy ways to create a buzz about your brand. Use the full potential of free social media platforms like Facebook, Instagram, and Snapchat and share your marketing messages directly with your targeted audience.
7. Focus On Public Relations
Developing strategic alliances and creating goodwill is an old-age strategy that is still valid in the modern era of digitization. Good public relations can also help new ventures in many ways. In rapidly growing countries of Africa, there are so many grey areas that beginners aren’t familiar with.
But effective relationships can save you from troubles. The alliances that you made can provide you free counseling and tell you the dos and don’ts of doing business in your selected geographical location. Good public relations can also help you promote your products and generate interest in actual and potential customers in your brand.
8. Leverage Innovative Technologies
Leveraging digital technologies is highly essential for increasing the chances of success for your business. Because of the advantages that technologies can offer to emerging economies, the acceptance for e-commerce retailing and online businesses has remarkably grown in Africa.
Technologies can help you, and your customers save massive amounts of money. For example, if you are planning to establish an online boutique, then you are not required to ensure your physical existence, which will save your warehousing cost. Similarly, customers will not be required to travel to your store, no matter if you sell report writing service or kitchen appliances. Online is convenient and accessible.
9. Document Everything
From the very first business plan draft to workflow design, you need to keep track of all the expenses and paperwork. But you might be wondering why it is essential? Record keeping is a crucial business practice taught to students in business. It helps managers to manage company accounts, working costs, taxes, interests, and other expenses.
Not only this, but it also gives businesses a real advantage over its rivals. For example, a well-documented start-up allows you to secure finance quickly from investors by providing proof of your firm’s performance and how it evolved over time.
10. Brick-And-Mortar Stores Are Still Trending
If you think that your business idea may not work well because it is expensive, then you can go for brick-and-mortar stores, which are still quite prevalent in Africa. According to surveys, entrepreneurs find online retailing less rewarding and more costly to maintain.
Online retailing is still in its infancy stage, but there is a huge potential for digital retailing in Africa in the new future. Some of the apparent reasons include an increase in smartphone users, access to the internet, and growing disposable income. Moreover, most under developing countries are highly inspired by the Western brands that sell their stuff through online stores.
11. Don’t Look Back
We all have grown up hearing that passion and patience is the key to success. Well, it may sound typical, but this is true, and the reason is simple: good things take time. Starting a venture is not a thing for desperate people; it requires full dedication and consistent efforts.
With all of this, a little support and advice from leaders can help you go through the darkest of moments. Sometimes, humans pride themselves on their accomplishments, and this prevents them from going further. Never do this. Ask your mentors and industry experts for their advice as roadblock arises. You might learn something from their experiences that will help you avoid similar mistakes.
Final Verdict
Now you’ve finally known that you have to adopt a practical approach to become a successful entrepreneur in Africa. Last but not least, you should have the desire to achieve your dream. With our tips, as mentioned earlier from experts, we hope that you will expand in the land of opportunities with full confidence.
