How to start a business for the African market

There are over 197 million people and 300 tribes in Nigeria. Each has its own distinct culture, sense of identity, and codes governing behaviour. This fact highlights the enormous diversity not just of Africa, a continent of 54 countries, but within each of those 54 countries.

So when you’re thinking about starting a business for the African market, context is king. Blanket approaches won’t do. If you try to map what works in one setting onto another, you will struggle. This is essential to know for all aspiring entrepreneurs selling to an African audience. The choices you make must be looked at through the lens of the unique community you serve.

business in African marketHave a local presence

The African diaspora is vast. In France, there are roughly 3.3 to 3.5 million Africans; in Brazil and the US, not including mixed-race people, there are 14.5 and close to 42 million Africans, respectively. There are nearly 2 million in the UK. So there are many people in the West with a strong understanding of and close cultural and familial ties with countries in Africa. But entrepreneurs starting a business in the African market still need to make sure that they have a consistent local presence if they are not on the ground now. Once you have registered the business locally, try to find local partners and work with them. Have someone immersed in that culture so they can guide your decisions. Cultures, however distinct from one another, are always evolving.

Market authentically

Most Africans want to see themselves reflected in the brands they buy from, so market authentically. Take your knowledge of the community you market to and strive to capture that identity in your design and your messaging. Be simple and memorable, but be authentic, too. Look and sound like the people you serve. If you do this, you will begin to build trust with those people and, as any entrepreneur knows, trust is the most valuable currency in business.

Start small

Part of placing your business within a distinct context and selling to that community is not to overreach, or to try to be all things to all people. Focus on identifying your customer base and marketing effectively directly to them. It might be tempting to try to cast your net wider, over a large segment of a population, especially if you know they have needs that your product or service can meet. But this can dilute the strength of your brand in the early stages and alienate your core audience. It is far better to start small, build loyalty among a specific group, and take your time to develop that audience.

Price fairly

In some cultures outside Africa, people will choose the more expensive item over a cheaper, but functionally similar, alternative. It could be a branded t-shirt, sunglasses, or the latest electronic gadget. But this is not the case in Africa. Most Africans like to shop around for a good deal.

So setting the right price for your service or product is the most important thing to do after developing a brand identity that reflects the community it serves. It’s essential. If you are not perceived as offering good value for money, you will struggle to get your business off the ground in the African market.

Treat fundraising like sales

When it’s time to raise funds, take your time. Many entrepreneurs jump into fundraising and make mistakes. Signing up for startup investment readiness programmes is a good way to avoid common traps and pitfalls, put together a compelling pitch narrative, and take the right overall approach to attracting investment.

Research is always worth the time. Fundraising is like a sales process, and you need to understand your potential investors in the same way you understand your customers. Create an investor pipeline and share the list with others in your network. Be strategic, and break down your raise into tranches to build FOMO. If you are raising £200,000, start with £50,000 at a lower valuation, then move on to £50,000 at a slightly higher valuation, and so on. This will pay off—literally—in the long run.

Think mobile

Most of Africa is mobile-only. Products and services, as well as user experience, should be designed with the mobile user in mind. And not just any mobile user—83% of mobile operating systems in Africa are Android; in the West, Apple is the predominant OS.

Data has a say here, too. Despite the popularity of mobile, data access remains expensive for most of the African market. A worldwide survey by Cable UK showed that as of late 2020, African providers charged $3.30 per gigabyte. Be conservative with your video and imagery, and bear in mind the cost of your digital assets to a user with limited bandwidth.

It goes out without saying that the fundamental rules of starting a business also apply in Africa. And because of the importance of context to doing business in Africa, this guidance is necessarily general. But keeping to these principles is an effective means of making sure that you do not make the kinds of mistakes that prevent a great idea from translating into reality and depriving people of something that will add real value to their lives.

by Kay Akinwunmi, author and founder of Zazuu