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5 tips for business success in Africa

Updated on March 17, 2016

Tip #1: choose your location country according to your project

If you want your business venture to be successful, you'll need to take each country's specific conditions into account in relation to your project. Here are a few indicators you can use:

  • mobile telephone use: this is particularly developed in Nigeria, Kenya and South Africa;
  • internet penetration rate (Morocco, Egypt, South Africa);
  • transport budget, which reflects good purchasing power;
  • level of urbanization (Cairo, Lagos and Kinshasa);
  • household consumption, specific to each country;
  • significant purchasing power (Nigeria has the highest);
  • household expenses, showing the number of homes that could potentially purchase your products.

Tip #2: choose a sole proprietorship structure

You may be tempted to create a limited liability company for the added credibility it offers. Be careful however, this is a risky option because it requires a significant financial investment that you perhaps can't afford. To take Ivory Coast as an example, you'll need to pay almost €3,000 for your company to a have a legal existence. Whilst if you choose to create a sole proprietorship company in this country, you won't have much more than €100 at the most to pay.

Tip #3: consider African country-specific constraints

If you were formerly living as an expatriate and you return to Africa to start your business, think about the hurdles specific to different African countries which could slow your progress. Accordingly, bring good quality, second-hand IT equipment with you, because local prices in Africa are very high, the product range restricted, and equipment can be defective. Furthermore, in some countries like Ivory Coast, taxes on IT equipment are very high, something which could impact on the price of your products or services.

Tip #4: sublet an office in a company

You might not have thought about this point, but the cost of renting office space can put a severe strain on your budget if you don't take necessary action. Take advantage of the number of businesses which don't fully use their space, and sublet offices from one of these. Otherwise, you'll need to advance a five month deposit to rent directly. You're better off avoiding such expenditure and benefiting from being hosted in a sublet situation.

Tip #5: never enter into verbal agreements

As a budding entrepreneur, you might be tempted to enter into a business relationship or close a deal with a verbal agreement. Be careful, this can be a fatal error! Always keep a written record of the agreements you have made. Not only this will require your partners and collaborators to take their commitments seriously, but it will also encourage them to increase their productivity. Always refer to the Labor Law of the country in which you are located, and don't hesitate in appealing to the justice system when contractual commitments are not respected

Africa is a continent experiencing rapid economic development. Make sure the your business startup is successful by following these five reliable tips!


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