For Africans with entrepreneurial mindset living in Africa or in the diaspora here is a detailed piece on how profitable business ideas in Africa, it will also guide you in developing 2019 goals.
This intellectual piece was put together by smallstarterafrica, read, get enligthened and share.
Read excerpt below:
Africa is the next big thing and the land of endless opportunities. It’s no surprise that investors, multinational corporations and entrepreneurs from across the world are swarming to the continent, looking for a piece of the action.
While there are guaranteed ways to find great business opportunities in Africa, only the most successful entrepreneurs have mastered the art of finding the very best gold nuggets.
This article walks you through the paths that will lead to the discovery of excellent business ideas that could change your life forever!
Let’s meet them…
(1) Fix a problem: Whenever a problem is fixed, someone makes money!
Most businesses on earth exist to fix problems.
Interestingly, the natural human reaction to problems and challenges is to complain, blame, curse and criticise. That’s what many people do.
While these actions enforce your rights of free expression, they hardly provide any solutions to problems.
But entrepreneurs see problems differently. That’s why we’re unique people. We see business opportunities in every problem. We think of solutions instead of whine about our difficulties.
And because most people are frustrated by problems and challenges, they would gladly pay anyone with a solution to get it solved.
Have you ever had car trouble before? If you’re like most people, you definitely hate a car that won’t start or an ugly noise in the engine that could be the sign of something catastrophic. I definitely hate car trouble!
But you see, for a mechanic, car trouble means an opportunity to make money. Because an auto technician has the solution to your car trouble, you would gladly pay him to get it solved for good.
One person’s problem is often another person’s opportunity.
African Case Study
Iroko TV is a shining example of how a successful business can be built from solving a problem. Iroko TV is an online video streaming service that provides a catalogue of more than 5,000 African movies on the internet.
Before this business started in mid 2011, African movies were largely distributed by physical Compact Discs (CDs). This kind of distribution limited the spread of these popular movies, and entrenched piracy which caused movie producers in Nigeria to consistently lose money to the pirates. Worse still, the CD distribution system made it nearly impossible and expensive for people in other parts of the world to get their hands on their favourite Nollywood movies.
Jason Njoku understood this problem and built an online platform that makes these movies easily accessible from anywhere in the world. Just a little over two years since Iroko TV started, it has attracted more than US$10 million in investment funding and shows no sign of letting off!
You can read more about this interesting success story here.
As you already know, our dear Africa is awash with problems. Most of our roads are broken, electricity supply is poor, young people can’t find jobs, our schools don’t teach well and food is insufficient.
Compared to the rest of the world, Africa’s problems are very many.
But while many people think this is a bad thing, I think it’s really good for us. Because, within all these problems are golden business opportunities to make money!
It all depends on your perspective.
You need to stop seeing problems in your life and and environment as ‘problems.’ Instead of whining, ask yourself: ‘How can I create a business from this problem?’
This is exactly how smart entrepreneurs think in Africa.
If you really want to make money in Africa, you need to start writing a list of all the problems you’ve noticed and start to think of possible solutions for them.
By the time you’re done, you’ll be flooded with great business ideas. That’s for sure!
(2) Convert your natural abilities and knowledge into a business – You don’t need to be the best!
Every human being is born with a unique and special contribution to the world. The sad reality is, less than one percent of humanity is confident enough to find and exploit their natural potential.
In my experience, I have found that everyone has some skill or knowledge that can be turned into a business. The interesting thing about this principle is that you don’t need to be the best at anything to succeed in it.
A lot of people make the mistake of thinking they have to be the best at something before they can make money out of it. Not true.
Here’s a reality check:
The most gifted people in almost every field are usually too SCARED, and can hardly muster the guts to start a business.
Have you ever wondered why most of the people who really start businesses in Africa don’t have MBAs and PhDs?
In my opinion, I believe the more a person knows about a subject, the greater the fear they have to take risks.
I call it the ‘curse of knowledge.’
The truth is, you don’t need to have the largest fountain of knowledge to use it to your advantage. What you actually need is confidence to apply the knowledge that you have (or can learn). Unfortunately, most people do the reverse; they spend all their life acquiring more knowledge that they’ll never use.
In my experience, knowledge is overrated. What we need is passion, creativity and courage to exploit the knowledge and skills we currently have.
African Case Studies:
Linda Ikeji isn’t the best writer in Nigeria, by any means. Yet, her blog is one of the most successful on the continent, earning her thousands of dollars in income every month. Linda is not a trained journalist, but millions of Nigerians depend on her blog for a daily dose of breaking news and society gossip. By applying some creativity, she has successfully transformed her keen interest and passion into a viable business.
Faustina Sakyi, the highly successful Ghanaian cassava farmer is not by any means the most skilled cassava producer in her country. She doesn’t even have a university degree. But by applying some basic knowledge and experience in farming, she has transformed her small cassava and gari products into a multinational export commodity. Just by applying ‘common sense’, this woman was able to earn enough money to rise out of poverty.
Bimbo Balogun was a novice at making African bead jewelry and was only ‘passing time’ with the art until she discovered by accident how lucrative a venture it was. Today, her bead jewelry is worn by celebrities and public figures in her country.
One thing is clear from the stories of these entrepreneurs: they are hardly masters or experts at what they do. Their successes prove that determination, passion and a will to take action with what you already have may just be all it takes to succeed as an entrepreneur.
Are your natural abilities in cooking, writing, organizing, farming or influencing people? Do you have a basic but specific knowledge of a trade, product or market?
Even if you don’t have the knowledge or skills, but have a strong interest and passion for it, you can learn it.
There are several free platforms on the internet where Africans can learn anything for free these days. Check out this article to learn more: Free Online Courses – Top 10 Places on the Internet Where Africans Can Learn Anything for FREE
You should take out a sheet of paper and write a list all the things you know and can do quite well. Remember, you don’t have to be the best at any of them.
In my experience, I have found that most of the things on your list are likely to be things you’ve known all your life, and can do almost effortlessly, but you’ve always taken for granted. People may have often praised these abilities but you never gave too much thought to it.
Think deep, they can’t be that far away.
(3) Copy an already successful product or service and improve on it – Life is too short to be reinventing wheels!
Yes, copying a business idea that’s already successful can be legal, if you do it intelligently.
As you already know, Africa’s market is huge and there is more than enough room for new and existing businesses to satisfy the expanding consumption.
Copying an already successful product or service is one of the most popular and easiest means of starting your own business.
This strategy is a huge part of how next-generation economies like China and India are building their fortunes. They intelligently copy great ideas and products from the developed world, and create their own cheaper versions.
The ways this strategy works is simple: Find a business idea (product or service) that’s already successful and think of a way to make it better, cheaper, more convenient or more beautiful. Of course, you must be mindful not to steal or infringe on somebody’s copyright or patent. You could get sued!
African Case Study:
In my former neighborhood, there used to be a popular and very successful laundry and dry cleaning business. Let’s call them ‘Wash Brothers’. It was the only laundry and dry cleaning service in the area and people didn’t really have any alternatives.
I would often hear customers complain that their prices were expensive and the customer service, horrible. But because the next laundry shop was just too far away, everyone had to put up with Wash Brothers, which was apparently making a lot of money in spite of its poor and expensive services.
It kind of crossed my mind a few times but I’m glad somebody else could see the opportunity in the market caused by Wash Brothers’ reckless monopoly.
Guess what happened?
Another laundry and dry cleaning shop opened a few blocks away from Wash Brothers! Their prices were far more reasonable, and the customer service was just too excellent! In fact, they totally beat Wash Brothers in their game, and it was evident they were stealing their customers.
This new business stole the Wash Brothers’ idea, improved on it, and then stole all of Wash’s customers. And guess what, it’s all perfectly legal!
The ‘copy’ principle works beyond your immediate neighbourhood. You can actually copy business concepts and ideas from foreign countries and introduce them to your locality.
Are there needs, problems or challenges you have noticed around you that already have solutions in other parts of the world? You’ll find clues when you travel, browse the internet or read the news.
Just be very observant and you’ll be amazed the opportunities you’ll find. And when you find them, copy intelligently and improve on them.
Good businesses ideas to copy aren’t too hard to find in Africa. Because many markets on the continent are still virgin and competition is light, the few businesses which dare to exist are shining lights in their markets.
But as Africa’s economies grow, more new businesses will enter our markets to compete.
You can learn a lot from the existing products and services around you. Can you make them bigger, better, safer, cheaper, faster, more convenient or more beautiful?
Life is too short to be reinventing wheels.
(4) Closely watch changes and trends in your environment – Change and opportunity are blood brothers!
Most people don’t like change. Fortunately, there’s nothing we can do about it.
Change is a constant player in human life. While we may hate, fight and try to avoid it, change will always happen. And only smart entrepreneurs who have learnt to be friends with change and are ready to exploit it, are always handsomely rewarded.
(photo credit: excerpt.nl)
Especially in rapidly growing economies like Africa, the tastes and needs of the market are constantly changing. Entrepreneurs must learn to watch out for trends and changes in their environments that could lead to new business ideas.
The nature of the trend, good or bad, is not very relevant. There’s always an opportunity to make money during both good and bad times.
When people are excited, they buy. When they’re afraid, they buy. When we panic, we buy.
African Case Studies
Ebola – During the recent outbreak of the Ebola pandemic in West Africa, a palpable panic gripped the region, from Senegal to Nigeria. As the authorities encouraged people to limit personal contact, improve hygiene and wash their hands frequently, the demand for sanitizing gels went through the roof, and most shops ran out of stock.
An acquaintance of mine, a Nigerian chemist by training, did well to exploit this gap in the market. With his knowledge of chemicals, he was able to make a local, but equally effective, brand of hand sanitisers. As expected, he couldn’t make them fast enough, as his supplies disappeared into the ultra-high market demand.
Recyclable paper bags – In 2008, the Ugandan government put a ban on the use of plastic bags in order to reduce its negative environmental impact. Andrew Mupuya, then 16 years old, knew that due to this change, businesses (especially in the retail sector) would need a new and recyclable type of packaging. That’s the idea that led him to found Uganda’s first paper bag production company.
Starting with only $11, Andrew’s business produces over 20,000 paper bags every week for its clients. His long list of clients includes restaurants, retail stores, supermarkets, medical centers, as well as multinational companies like Samsung.
Good and bad trends either lead to opportunities to be exploited or problems that must be solved. Whichever way it swings, the smart entrepreneur always wins!
The key is to be on the lookout for changes, and fight the human impulse to fear them. Instead, ask yourself: ‘Who will be affected by this new trend/change?’ and ‘What products or services will they need to adapt to the trend/change?’
As an entrepreneur, you need to react to changes differently. Changes and trends usually lead to a reaction in the market and an upsurge in demand for certain products and services.
Change is your friend. Embrace it!
(5) Focus on satisfying people’s needs and you will surely find the money!
If we could make and do all the things we need, there would be no need for any business on earth.
If you could make your own tooth paste, build your own house, manufacture your own car and refine your own petrol, there would be no need to get on the market to buy these things.
And because we cannot produce everything we need to function in our lives, we have to rely on businesses to cater to our most basic needs: food, shelter, clothing, communication, transportation, information, employment, entertainment etc.
Because life in our modern society is nearly impossible without some of these things, needs are compulsory!
From the time we wake up in the morning, these needs set in and we are more than grateful to pay someone a reasonable price to get these needs satisfied. That’s how many businesses make money; they satisfy a need and make money in the process.
African Case Study
Aliko Dangote – Africa’s richest man is arguably the role model to follow when it comes to spotting business ideas that are built on needs. Just one quick look at his business interests reveal his core focus – meeting people’s everyday needs.
Dangote’s biggest investments are in sugar, salt, flour, cement, beverages, and petroleum products. All of these are products that millions of people use and consume every single day.
It’s definitely no surprise that he’s Africa’s richest man!
Employment – In most parts of Africa, unemployment is a nightmare; millions of young and able people cannot find the jobs they need. In Nigeria, about 40 million people need jobs, and another one million fresh university graduates enter the unemployed labour force every year.
Interestingly, within this same market, companies find it hard to recruit suitably qualified people in vacant jobs. Companies and organisations need an effective and cost-efficient way to hire the people they need.
In 2009, three ambitious university students decided to take on Nigeria’s disorganized job market by providing an easy way to match unemployed people with their dream jobs. Today, Jobberman.com is providing millions of people with the opportunity to find employment.
To learn more about how they did it, read the full story here.
The interesting thing is, businesses that cater to people’s needs hardly ever go out of business.
Why? Because it’s almost impossible to live a ‘normal’ life if your most basic needs are not met. That’s why people will always spend money to have their needs met.
Make a list of needs for different consumer segments: children, housewives, bachelors, school kids, farmers, big companies, small businesses, governments and many more!
If you can fill a need, the market will reward you quite handsomely.
(6) Get inspired: Spark your imagination with the success stories of other entrepreneurs…
Success has the power to inspire success.
Most times, all we need is proof that something can be done. Success definitely has an inspiring effect on the human brain. When you see what other people like you have achieved, there’s bound to be an ‘I can do that too’ reverberation somewhere in your head.
Studying the success of other people feeds your imagination, ambition and competitiveness. It helps to open your mind to what’s really possible.
There are hundreds of African entrepreneurs who are building amazing businesses, and creating jobs out of simple ideas. The key is to admire their success and see how and what you can learn from them.
Get Inspired is a popular section of Smallstarter that contains profiles of several successful African entrepreneurs. We look at what they’ve done, how they did it and all the important things we can learn from them.
Many of these successful entrepreneurs started from nothing but were able to achieve amazing business success. Their inspiring stories expose opportunities in agriculture, blogging, entertainment, waste recycling and many other sectors.
Make no mistake, success is a formula that can, and should be, copied. This is exactly why many people love to read Forbes Magazine to see who’s in the list of the World’s top millionaires. We want to know what kind of businesses they run, how they made their money and what they’re all about.
Admiring these people is good, but learning from their success and applying it to your business life is more important!
(7) Use the Encyclopedia of Profitable Business ideas in Africa
After months of research and writing, I have put together the first and most detailed ‘encyclopedia’ ever written on business ideas and opportunities in Africa, including several success stories of entrepreneurs on the continent.
The business ideas and success stories you have read in this article are just a few of several contained in this book.
If you’re looking to inspire yourself with fresh business ideas and success stories, this book provides a rich source of facts, information, tips and resources that will help you find and refine your own unique ideas.
Whether you’re planning to start a business or already have one, this book will be invaluable to your plans and dreams.
101 Ways To Make Money in Africa is a 300+ page eBook that can be downloaded and read on any device, mobile phone or computer. It also comes with a bonus eBook and two other amazing eBooks that will help you find daily inspiration and potential organisations that can give you funding for your African business.
To find out more about this eBook and download your own copy, CLICK HERE