Are you visiting Africa this year for the summer holiday and you want to use the time to look into African business opportunities? Great, then this article is for you! I want to help you avoid making a very common mistake…
So let's say you are ready to travel to Africa for your holiday. In fact, I hope many more Diaspora Africans and others will use their holiday to do just that: Doing the research on the ground for a profitable business that has the potential to turn your life around!
Here is my advice how to go about it, let’s use Kenya as an example.
1. Choose a African business focus before you travel
That’s right. Choose a business or industry focus before you start your research on the ground!
Many people who reach out to me say something along these lines: 'I am travelling home to Kenya, and I want to use my time there to look for opportunities and see what they've got. Do you have any advice for me, Doc?'
Oh yes, indeed, I do!
Don't go anywhere in Africa to see 'what they've got'! Because they've got A LOT!
If one thing is for sure it is the fact that each country has thousands and thousands of opportunities, across hundreds of industries… Once you start looking, opportunities will be coming your way right, left, and center and chances are you are coming back as confused as you departed. You have now a whole lot of information running through your head, but it is so all over the place that you can easily feel overwhelmed about what to do next.
And everyone on the ground you speak to – will have an opinion, too! You go to Nairobi and speak to family members, friends, people in the community about what kind of business they think would do well in the country.
Someone advises you to bring in second hand computers, another believes that the pharmaceutical industry is one with future, and another one believes you should go with agriculture or tourism.
And before you know it you chase too many tails.
Oh, and then, just two days before your departure you meet the friend of a friend who makes you a partnership proposition for import-export and you think that’s a great opportunity, too. You’ll be in touch by e-mail.
You come home with a head full of colorful information, but little direction and insights.
Don't do that. You want to be able to return to the US or Europe with tangible results and with a sense of clarity.
Use your time and the rare opportunity during your holiday wisely.
Here is how:
When you do your research on the ground you will be in a much better position if you know petty well what you are looking for instead of merely wandering around not knowing what you are looking for.
Step 1. Be aware of the leading sectors & industries in the country you want to visit before your travel. For some guidance abou the top sectors, you can visit the website of the local Investment Promotion Center (google: Investment Promotion Center + the name of the country you are visiting) and on their website click 'Investment Opportunities'. This is one way to quickly understand the top industries and opportunities in that given country.
Step 2. Narrow the list down, by listing the sector or industries that would be of interest to YOU. Where do you have an interest, a skill, a passion? Maybe choose two or three at this point and write them down.
Be aware that each sector will still have a wide range of sub-industries and business areas that feed into that specific sector. But for now, just select the main sectors of interest to you. For example: Real estate, Agriculture, Manufacturing, ICT, Tourism, Finance, Exports…
Step 3. Now do some ONLINE research about the two or three sectors you have chosen. Read as much as you can about them. Find out about the gaps, the challenges, and the opportunities in those sectors. Do this online before you travel. Use a few days to do this.
Step 4. In the end, eliminate the least appealing sector to you. Select just one or two sectors. This will be your business focus during your travel.
When you finally step onto the ground to do your research, you will no longer act as an enthusiastic open canvas jumping onto all sorts of ideas and opportunties randomly coming your way, but you have a compass now: You have clarity about which sector you want to research.
Step 5. Scribble down various business concepts, products, or services that you could offer. Take into account your personal circumstances, such as how much financial capital you have (you can still start something on a shoestring budget), and if you are able and willing to relocate to Africa (or if you would rather want to start building your African business from abroad etc.).
Being aware of these circumstances will inform you about the business models that are feasible for you and the ones that are not.
And widen your horizon!
For example: You do not need to know much about farming techniques to tap into the agricultural sector – you could think about micro-insurance for farmers, about exporting goods, food processing, or branding for example.
And you do not have to invest hundreds o thousands and buy houses to make it in Kenya's fast growing real estate sector, but you could open an interior design studio, an online platform for real estate services such a plumbing, painting & gardening, or start real estate conference production.
I think you can see what I am trying to convey: List various business models that come to your mind that you could possibly get started in your industry of choice.
Now, when you leave for Nairobi you go with that list in hand. This is your framework to research your business opportunities during your holiday. You will go with a clear idea what you are looking for and to what kind of people or offices you need to speak to!
2. Do your research locally at multiple levels
Once you are arriving in Kenya, you can now start doing your research at multiple levels. So for example if you chose agriculture as your business focus:
Speak to representatives of the Ministry of Agriculture, the Kenya Investment Promotion Center (KenInvest), the Association for Agriculture, food processing companies, exporters, the Export Promotion Council, farmers….and….seek the local office that deals with business licences, so you can inquire about the latest business regulations, which vary depending on your nationality or residence base.
Interested in ICT? Visit the Ministry of Information, go to the offices of the Kenyan ICT Authority, the local tech hubs (such as iHub), speak to business owners about their ICT challenges, visit a local ICT conference….
You get the idea.
There will be a list of local industry stakeholders for each industry – find out who they are, visit them, meet them, ask them…There will be no better research than speaking to professionals and active players WITHIN YOUR INDUSTRY of choice. And because they will be speaking of the same industry dynamics, you will receive a clear and in-depth idea of the local demand, the challenges, opportunities, and policy framwork.
But above all: YOU ARE IN CHARGE now. You are not just a visitor collecting random ideas thrown at you from all ends. You are the driver – with a direction. And that is powerful and effective.
Again – Here are some questions you need to ask yourself and act upon locally (complementary to what you've researched online already):
- Who are the key players in your sector/industry in Kenya? Visit their offices, meet them (it's possible even without prior appointments. People and public servants are incredibly welcoming to any guest if you approach them professionall)
- Who exactly are your customers or clients if you were to offer a certain product of service? If they, too, are inside Kenya, try to find out as much as possible about their needs, wants, and haves.
- What are the local challenges to your business/sector? Look for infrastructure gaps, regulatory challenges, lack of local understanding towards an issue, Internet speed etc…
- What are the enabling factors and the opportunity? Maybe a new policy to boost that industry, high awareness, high demand, little competition etc.
- Who is your (potential) competition? Check out their products and services locally and get a feel for what they do and how well they do it.
- What are the local costs? Research the prices for products, transport, services, etc. that you may need for your business.
I hope it is much clearer now why the very first preparatory stage before you travel is so crucial. You won’t be able to focus on ANY of these important factors if you simply leave for Kenya to see what kind of business you could open there. It would be a great opportunity missed to get all the insights bundled for a particular industry.
But now, you can leave with clairty, and work on a start up because you have done some excellent assessment on the ground.
3. Choose a niche, a business model, and get started
When you come back from your visit your questions will have been answered. You are now in a position to make amendments to any previous plans or business models you had in mind. You can chose your niche, decide on a business model you want to pursue, and move straight into tangible action.
And as an important reminder: don’t aim to open a small business. Aim to use your small resources to start a business with great impact! You can do it!
Wishing all those of you who are heading home this year much success with your research and please let us know some of your findings, so we can share it here with the Africa Business JumpStart online community.
And if you need something interesting to read during that holiday, get our book '101 Ways To Make Money In Africa'
Do you have any questions or suggestions regarding your local market research? Feel free to use the comment section below.
Be part of Africa’s renaissance.
Build a grand lifestyle for yourself.
And make a positive impact on the lives of others. Today.