Starting a New Business in Africa

It is of course, difficult to start up a new business anywhere in the world.   Which is why entrepreneurs with the know how and determination to do so are so highly valued.  However in Africa there are very specific problems to starting up and this article attempts to summarise them.


Defining your market and assessing competition is crucial, what will work in Europe is not necessarily going to be a success in Africa.  Start up companies possibly have more opportunities in Africa where markets are less mature and are not always completely dominated by established brands.  Most businesses without a high level of investment are best suited to niche markets where the competition is less intense.    Don’t pick a market which is already saturated, try and bring something new and different which will help define a target audience.

You do need to step back and look carefully at the area and market you choose.  Is there an effective demand for your product?  The word ‘effective’ is important here, it basically means that people both want and can afford your product.  Don’t set up a high end expensive restaurant in an area with high unemployment and low living standards, it simply won’t work.

The next important step is of course employees, in some countries you can usually be assured of finding people with the right skills in most industries.  However in Africa this is not always the case, it is important to source the right people within your budget.  If they don’t have the skills, the should be able to develop and attain them through mentoring and training.

One area that is seeing great progress in Africa is digital companies.  These are basically companies that exists and trade primarily online, which has a huge advantage.   Not only can you locate in areas diverse from your target market, also the costs can be significantly lower.  Take this web site for example which demonstrates a digital product called a proxy to allow people to watch the BBC iPlayer abroad.  It’s a product and market that is probably accessible in Africa and you don’t need retail outlets in Harare and Cape Town to sell them – just a web site.

Of course this does mean  that you can’t use ‘cookie cutter’ type web sites to sell products to African markets.  You’ll obviously need to adapt your approach depending on both the product and countries you are targeting.   Including native language support is also a good idea, selling in a native language is always a good idea and differentiates from  your competitors

James Hallaway