Even though Africa tops the list of the continent with the most natural resources, Africa also tops the list of the continent with the highest number of failed businesses. It’s quite unfortunate to say – about 80 per cent of new businesses in Africa crash completely at the beginning phase.
The collapse of these businesses every year can be traced to some factors which range from lack of funds to difficulties in getting raw materials to lack of government protection and incentives.
However, many businesses have overcome all these challenges, and there will still be more. Hence, if you’re planning to start a thriving business in Africa too, there’s a chance of success. You only need to equip yourself with the right information and be ready to implement. Here are some tips to get started.
Starting a thriving business in Africa
Here are steps to starting a thriving business in Africa:
1. Recognition of opportunity
To have a thriving business in Africa, you must have the ability to spot the problem of people as most opportunities are embedded in problems.
The process of identifying opportunities is essential as it helps in the survival of the business, helps the business to thrive, and remains competitive in the market.
The multi-million dollar business Dangote Plc is an example, the products of this company are all problem-solving, which means the businessman sees an opportunity in people’s problems.
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After recognising the opportunity, the next thing is to have a well-written business plan. Your business plan is the foundation of your business upon which all other factors are built. It is the road map to the building, running, and growing of a thriving business in Africa.
Furthermore, no serious investor will want to work with a business that doesn’t have a realistic business plan. In other words, you need a business plan to attract investors to your business.
Also, because a business plan gives direction to all business activities, it will therefore bring about the sameness of vision and purpose amongst your team, which is necessary for the success of any business.
To get started, ensure you consult a qualified business analyst to help you create a professionally written business plan.
3. Think of how to fund your business
Now that you already have your business plan in place, the next thing is to get funding for your business idea.
Before this, you must have done an estimate of the total amount required to fund your idea and how long it will take for you to become profitable during the business planning phase.
Since you have all of this information, you’ll know exactly how much you need and where to turn to, to get funding.
You can source the money from various means if you don’t have the required capital. This includes borrowing it from indigenous African financial institutions.
In the case where you can’t get all the funds that you need from one financial institution, you can get the rest from another institution.
Also, there are some Government schemes in most African countries lending entrepreneurs money to fund their business too based on agreements.
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4. Choose your business location
Business location is another factor not to overlook. A good business location will favour the continuity of a business and attract the right prospect.
Also, you can decide to do it remotely if it is an online store or as a physical location, all are determined by the nature of the business.
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5. Register your business
Registering your business is important to protect your business and make your brand legal. When you follow the necessary guidelines, registering a business in most African countries is not difficult.
Every new business in Africa is required to register with the Companies and Intellectual Property Commission (CIPC), regardless of whether the founders are citizens of Nigeria, Kenya, Zambia, South Africa, Egypt, Mauritius, or Cameroon. It is crucial to adhere to all legal regulations.
You must follow all legal requirements and official procedures, according to the commission. To prevent legal troubles with African government authorities, the laws and employment norms must be adhered to. This is the key factor to staying long in the business.
6. Build a good management team
Management is an important factor in having a thriving business as it’s the role of management to form policies for the business. And policies are the steering wheel of business, they can direct the business to success or otherwise.
Endeavour to have an effective management team that can create good policies for your business thereby creating opportunities and an avenue of innovation for it.
Make sure you avoid sentiments when choosing your management team. Don’t just choose people because they are your close pals without considering their skills. A lot of African startups have gone down the drain because of an inexperienced management team.
7. Integration of technology
We’re now in the digital age and lots of activities can be done on the internet including business. Integrating technology into your business will enable you to add new value to your business models, and improve customer internal capabilities and experience.
Lots of companies are now selling online and so you too should integrate technology into your business to survive the competition and also thrive.
One of the aspects of your business that needs technology the most is marketing. To ensure continuity, you need a good marketing strategy. Lack of adequate publicity and poor marketing campaigns made some businesses fail in Africa.
To avoid this, channel your energy into a massive advertising campaign. Leverage social media to help your product, business, or service reach more people regardless of your financial situation.
Social media networks like Twitter, Instagram, Facebook, and TikTok allow you to reach millions of Africans with your message within a limited time. With this, you will stay long in business putting both societal, and environmental factors in place.
8. Quality product and specialisation
Quality product isn’t only about producing products that surpass standards, but it’s also about the reputation you build for yourself by always satisfying your customers with the quality of your products.
As it will help to build your business reputation and customer satisfaction, it will also help in decreasing risk and damaged goods cost.
By getting accreditation from a reputable quality standard, your business can build a reputation as the producer of only quality products.
In addition to being a quality product producer, you should also have a niche. By focusing on the production of a particular niche of products, you’ll be associated with a specific group and this will help promote your business development rather than being a jack of all trades.
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9. Connect with other business people
Connection is a powerful tool you can use in building a thriving business. Connecting with others in your field particularly the successful ones may help in the growth of your business
By connecting with others, you’ll also develop ideas, create solutions, and accomplish your company’s goal.
Building a thriving business in Africa might be challenging, but it’s your ability to build it that will determine your success in the business world. By following this blog post, you can rest assured to build a business which will play a vital role in the economic development and growth of the nation.