Understanding the challenges of doing business in Africa will be essential to your startup success, should you venture to the continent, home to 55 markets (you may further multiple this, according to tribes and regions). Many leaders express confidence in entering Africa. But one must keep in mind that such an investment will be for long term success. Other than knowing the best countries to do business in Africa, here are nine things you must know:
1. Africa isn’t a country
For a long time, Africans have struggled to teach the rest of the world that they are from a continent that’s the 2nd largest and the 2nd most populous on the planet. Africa’s 55 countries each have different tribes, cultures, languages and religions. You will have to undertake meticulous research to discover what’s unique about the country you plan to move to. Don’t think that just because one culture finds something acceptable, then others will.
2. Don’t assume labor is dirt cheap when doing business in Africa (in any country)
…at least not the kind of labor you need. The quality of staff you recruit will largely determine how successful your business will turn out. I would suggest hiring an established, reputable agency to handle any hiring concerns. Be clear about what you are looking for, and your salary projection wages (be realistic). If you are only concerned about how little you can get away with paying your employees, then you may get saddled with people who will cripple the business. You will miss out on the backbone of a supportive team, get ripped off or gain a reputation as an unfair employer and a reputation like that will not do your brand any good.
3. You won’t be able to bribe your way out of problems when doing business in Africa (in any country)
It’s amazing how many movies still portray Africa as a continent where anything goes. Slip an officer or a clerk a bit of money and doors will magically open for you. Perhaps this was true once, but things on the continent are changing rapidly. Besides how long do you think you can run your business with such scheming moves before you get into trouble with the law? How about learning the right way to do things and applying it to your business? Corruption exists in every society but what happens when someone gets caught? Are you willing to risk everything?
4. Be prepared to engage in hands-on methods get your brand noticed when doing business in Africa (in any country)
Be ready to pull out all the stops as there are still many who aren’t swayed by viral videos or the choice of a brand ambassador. Social media sponsorship of related events, media advertising, and shopping parties will attract some, but you can’t rely on only these methods to reel in clients and get ahead of the competition but don’t expect everyone to love your brand automatically. Understand that you are on foreign turf, discover what makes your market tick and position your product accordingly. So many entrepreneurs have failed to try to replicate business models from the west wholly. Understand that the people who make up your market have priorities, mindsets, and challenges.
5. Location matters when doing business in Africa (in any country)
Find out where your target market is situated and get your business as close as possible. It’s not very practical to have your business office in Malindi, Kenya if your target audience is in Nairobi as it may mean more operating costs and significant inconvenience. Your location can cost you clients and keep your business from getting as much PR as it should.
6. Learn the language when doing business in Africa (in any country)
By language we mean, the culture and typical priorities of your potential customer base. What does their culture dictate about your product? Is it even acceptable or does it go against the dominant religion of the nation? Is there a particular strategy that should be employed to market it to avoid being considered offensive?
Find out what your market needs and don’t try to force what you think they should need. Perhaps there’s a company already doing that business, and you will have to learn how to get the market to take a chance on you. Whatever you do, don’t compromise on finding legal counsel that’s familiar with the law of the land. You should consider consulting with a lawyer before making any major business decisions.
7. Each country’s political climate matters when doing business in Africa
Political stability is critical in business, and so many have lost everything for failing to understand this. Instability can grind an economy to a halt or create so much uncertainty that currency is devalued or people become too scared to spend because they are uncertain.
Issues like taxation, importation, etc. must be fully understood before starting the business and must not be taken for granted as rules may change following a change of government. Don’t take any laws for granted merely because they seem lax. Many African governments have been coming down hard on business owners breaking their rules.
8. Having a genuine network will prove invaluable when doing business in Africa
Do you have a contact/linkages in the country you plan on relocating to? Or has anyone in your network moved to the country you are considering or lived there in the past? Find out what challenges are peculiar to the country, the business scene, and the people. Linkedin is actually an excellent way to connect and access such information.
9. It will take time when doing business in Africa
Don’t expect that business idea to be foolproof just because it has worked in other places.
Or that it will become a household name in a flash. Be prepared to give it everything you have got and understand that it will take some time. The trick is to open your mind and not believe that your business model is perfect. Find a business consultant who can expose you to the grittier aspects of marketing that exist on the continent.
And don’t forget to brush up on your public speaking skills. You’ve got a whole lot of convincing to do!
Do you think there are other things to consider before moving to start a business in Africa? We love reading your comments.
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