There are still two persistent myths out there among those aspiring to start their own business in Africa. One is that you need considerable capital to get started, the other is that is it complex and risky. It does not have to be.
Starting a business exporting African goods that are high in demand in the West, Asia, or even within intra-African trade markets may be your perfect business model.
Important is this: Know that you can start off as an importing agent, so you do not need to pay for products yourself. Instead, start with what you have right now and be dedicated enough to see it through. Then you re-invest some of the money you make back into your business and grow it from there.
A success story
Honore C, one of my clients in Canada, had a dream: He wanted to leave the 9 to 5 rat race for an employer in Calgary behind once and for all. He wanted to engage in something more fulfilling and profitable. Something he could build himself. He wanted to start his own business, become financially free, enjoy more time with his family, and contribute towards the development of Africa in general, and his native country of Rwanda in particular.
But Honore quickly saw the hurdles: He had no start-up capital, he had little time available being tied up in full-time employment, and no business knowledge to help him navigate. It meant he needed a business model that he could simply start operating from home for a few extra hours each day. That home, of course, was thousands of miles away from Africa. It all seemed like an impossible plan.
For nine months, Honore did nothing. In his own words, he was paralysed by fear and indecision.
As an African business trainer, I guided Honore through a number of African business models he could start despite his circumstances.
Honore decided to dive in – he would import food products from Rwanda into Canada. His first order was a 200kg shipment of gluten-free cassava flour; a few boxes which he piled up and stored in his house. Just over a year later, Honore, was able to leave his job, as he was already earning more than enough from his African imports business to replace his monthly wage. He could hardly believe that it happened all so soon. He had opened a warehouse, he had received official distributor status, had met with government representatives in Canada showcasing his unique African products that were high in demand locally. But above all, he was a free man and experienced a level of fulfilment like never before. All in a matter of months.
And he was helping the development of Africa in concrete terms, because when you help sell African goods you contribute to the national budget of the original market, you empower the livelihoods of the producers, and you help create more jobs. Indeed, your business is meaningful all while being highly lucrative.
For Africans in the diaspora, here are five reasons why you should start a business in African trade
#1 You are meeting a huge demand
There are hundreds of African manufacturers with limited distribution looking for an overseas market. Importing their goods is the place to start your business.
Africa has high-quality products to offer that are in huge demand all over the world. Consumer behavior is changing everywhere. People want to consume products that are healthier, natural, organic, ethically sourced, fairly traded, fresh and original, gluten-free, sourced from single destinations; products that tell a story or that help consumers make a positive impact in someone else’s life. Africa has all of that to offer and more – this is where you can find a very attractive competitive advantage.
The manufacturers in Africa have everything to gain when partnering with you: an increase in sales, broader market access, less time spent finding new markets, and more profits at the end of the year.
#2 It does not matter where in the world you are based
If you are looking into setting up your own business importing African goods, it really does not matter where in the world you are based. You could be sitting in Europe, North America, Asia, or anywhere else in the world. Fact is that food products and African goods such a coffee, tea, fruits, spices, superfoods, natural skin care, or gluten-free grains are needed across the globe.
Even intra-African trade is growing at a fast rate and has huge future potential: In March 2018, African countries signed a landmark trade agreement, the African Continental Free Area Agreement (AfCTFA), which commits countries to remove tariffs on 90% of goods, progressively liberating trade. If successfully implemented, Africa will become the largest free trade area in the world with a projected cumulative gross domestic product (GDP) of $3.4 trillion and a combined population of 1.2 billion inhabitants. This is powerful and you can position yourself right now.
#3 You can start your business on a shoestring budget
You can start your importing business of African goods in your own home with little money. Important is that you understand that there are various importing business models that require different levels of capital and input. Start out as an agent. This means you can get started with just your mobile or a laptop. You connect manufacturers and exporters in a certain market in Africa with buyers in a different country. You do not even need to worry about the shipping of containers or the transaction of money. All of it would be handled directly between the supplier and the buyer, and you earn a commission.
If you wish, you can re-invest that money into your business and become a distributor with your own warehouse or even start your own food brand by putting your private label on the package: Wambui’s Dark Roast Coffee …. It’s up to you, in which direction you want to grow.
#4 Create passive income streams
Here is what makes African product imports so lucrative and attractive: Once you have won over a buyer as an agent, such as a supermarket, a coffee shop, a petrol station, a hotel, or individuals ordering from you via Amazon, they will come back again and again to fill their shelves. This means that the initial customer acquisition is where the work is, but think about a shop owner who simply places another order with you again and again – you don’t have to do anything anymore, but you earn an agent commission each time, totally passive. This is how you can build a great portfolio of buyers and grow your passive income streams.
#5 Make money and enjoy your new won freedom while making an impact in Africa
The biggest advantage is the money you’ll make and the immense freedom you will gain once you have a few loyal clients in your buyer portfolio. The commission for setting up sales is very profitable especially when other companies such as supermarkets or hotels buy from you.
Because you are now working for yourself and you own passive income streams, you have a pretty location independent business, which means you can now enjoy a new level of freedom most people will never experience in their lifetime. You can use that freedom to travel, to spend more time with your family, or simply do the things that are important to you. Also make sure you invest your extra money into other areas to create true wealth.
But above all: You will find the work highly fulfilling because you are supporting hundreds and soon thousands of African small-holder farmers and their families. Yes, you are contributing towards Africa’s development in real terms.
As Mandela once said: “Sometimes it falls upon a generation to be great, you can be that generation. Let your greatness blossom.”