Sundaymail Editor
Big Business Ideas
Stephene Chikozho
OVER the past few years, there has been a growing narrative on multiple streams of income, financial independence and wealth creation for both outright entrepreneurs and people in formal employment.
The objectives of the above have been plenty, but for most Africans, it is about advancing, progressing and escaping poverty, a shakeable ill that has affected generations for hundreds of years on our greatly resourced continent.
Shake it off
Starting a business can be a sure way of shaking off the bondage of poverty through the creation of multiple streams of income, financial growth and freedom.
If you can dream of turning your hobby into a profitable enterprise, of expressing your creativity, or of being richly rewarded for your hard work, you have the opportunity to escape poverty. Although the maxim “If you can dream it, you can do it” holds true for some, pursuing the business dream is risky. Those who attempt it must have the entrepreneurial spirit and will to fearlessly quit a well-paying job, and face a future filled with uncertainty.
Others might need a push; often being laid off or dismissed can be a springboard.
Do something to change your life
No one gets remembered for doing nothing. You are responsible for your future and possibly that of generations to come after you are gone. You can change your life by starting a business.
Starting a business requires the following:
◆ A good idea anchored in a great business plan
◆ An entrepreneurial spirit
◆ A willingness to take risks
◆ Business acumen to put the plan into action
◆ Determination to deal with setbacks
In Africa, there is a growing number of young entrepreneurs who are increasingly a part of the start-up vibe. They have the energy, innovative mindset and business skills. They also like the excitement and freedom of running their own ventures. It is perhaps exciting to be part of this exciting vibe.
Keeping the faith
While the reasons for having a start-up may vary, what all entrepreneurs have in common is the willingness to take risks.
Few entrepreneurs get it right first time; it takes resilience and tenacity to keep going in the face of failure, and it takes perseverance to remain positive when customers, banks, and investors repeatedly say “NO”.
Faith in the idea is essential. While some start-ups require very little capital, most need funding during their early growth phases.
In recent years, securing finance for start-ups has gradually improved. Many African governments offer loans or grants.
Entrepreneurs with big ideas can access large sums of money and managerial support from venture capitalists, whose sole purpose is to incubate start-ups.
For smaller start-ups, and for people with very little of their own capital, micro-loans and crowd funding finance are increasingly becoming popular. With the growing number of innovation hubs, large corporates and universities are also playing a significant role in anchoring business incubation and success of start-ups in many African countries.
Entrepreneurs should engage, connect and immensely benefit from these game-changing resources available.
The business plan
The key to securing financing is a business plan. A good plan will outline the idea itself, detail any supporting market research, describe operational and marketing activities, and give financial predictions.
The plan should also outline a strategy for long-term growth and identify contingencies or alternative ideas or markets if things do not go as planned. Most importantly, a good business plan will acknowledge that the biggest reason for business failure is a lack of cash. While loan capital can help for a while, eventually, a business must fund its operations from the revenue it realises. A good business plan will analyse future cash flows and identify any potential shortfalls.
For most African entrepreneurs, beating the odds at start-up is defined by the tenacity to take an idea to the market, the ability to secure sufficient finance, and the business acumen to turn a good plan into a long-term, profitable enterprise.
There is a gap in the market, but is there a market in the gap?
Finding a profitable niche is a very important part of business development. Some industries in Africa are more profitable than others. They offer more opportunities and businesses make healthy returns.
On the other hand, many African markets are crowded, with multiple sellers in, for example, fintech, shipping, logistics, agriculture, furniture, construction, clothing and technology retail, chasing the same customers. For these sellers, competition lowers profitability.
The market gap for a new product offers the enticing prospect of healthy profitability. But does the gap contain enough business to generate a profit in the long term?
Finding a space in the market that is unchallenged by competition is the most sought-after positioning strategy. Unfortunately, these spaces or market gaps, are often illusive, and the benefits of finding one are often illusory.
Although competition is a fact of life, it makes business difficult, contributing to an ever-downward pressure on prices and ever-rising costs. There is funding of new product development and marketing, as well as an incessant need to outmanoeuvre and outsmart rivals. In contrast, the benefits of finding a market gap, a small niche segment of a market that is unfettered by competition, are obvious: greater control over prices, lower costs and improved profits.
The identification of a market gap, combined with a dose of entrepreneurial spirit, is often all that is needed to launch a new business. Do something to change your life. No one gets remembered for doing nothing.
◆ Stephene Chikozho is managing partner and principal consultant for Urbane Create Agency. He is also the business development consultant for Beyond Borders Logistics and Tsoka International. You can follow him on social media (Instagram, Facebook, Twitter, LinkedIn) WhatsApp +263772409651 or email [email protected]
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