4 winning tips for startups in sub-Saharan Africa

Photo by: Tony Elumelu Foundation

LAGOS, Nigeria — Launching a small businesses in Africa requires both a winning idea and great perseverance. Startups face myriad challenges, from accessing finance, to navigating red tape, to developing a marketing strategy.

This month, the largest entrepreneurship meetup in Africa gathered roughly 2,000 entrepreneurs with business mentors, bank officials, and aid agency representatives in Lagos to discuss the landscape. The third edition of the Tony Elumelu Foundation Forum serves as the annual culmination of a 12-week training program on how to set up and manage a business and draft a robust business plan. The program provides up to $10,000 seed capital for 1,000 TEF entrepreneurs each year.

Since its inception in 2015, the TEF Entrepreneurship Programme reports that it has assisted almost 3,000 entrepreneurs and created hundreds of new jobs. The foundation has made a $100 million commitment to train, mentor, and fund 10,000 African entrepreneurs with startup capital to launch and expand their businesses by 2025. Business ideas are judged on a selection criteria that evaluates the feasibility of the business idea, scalability, market opportunity, financial understanding, and leadership potential.

Agriculture businesses topped the 2017 TEF entrepreneurship cohort, followed by startups in fashion, manufacturing, and information and communications technology. Almost 40 percent of this year’s entrepreneurs were women, and the applicant pool included 93,000 ideas from 54 African countries.

TEF has used this philanthropic initiative to advance a philosophy that the founder and chairman of United Bank of Africa, Tony Elumelu, calls “Africapitalism” — the idea that Africa’s private sector and entrepreneurs must serve as the primary catalyst that fuels social and economic development on the continent.

“We know and realize that there are factors affecting their ability to achieve success: one being capital; two, training [and] mentoring; three, creating the right environment for businesses to do well,” Elumelu told journalists at a press conference during the forum earlier this month. “We need to begin a conversation on the continent that brings our political leaders, policymakers, and private sector together, that can help our policymakers understand private sector role in the country’s success and ability to create jobs.”

Devex spoke with entrepreneurs at the event about their tips for long-term sustainability.

1. Follow the required protocols

Registering a new business may require mounds of paperwork and repeated trips back and forth to various offices. But completing the process and thoroughly following up is vital to growing a business, forum attendees told Devex.

Founder of Happy Coffee Adeyinka Adeyemi serves her iced coffee with chocolate syrup, whipped cream, and a smile during the 2017 TEF Forum. Photo by: Christin Roby / Devex

Entrepreneurs must remain diligent and follow up to ensure proper registration, said Adeyinka Adeyemi, founder of Nigeria-based Happy Coffee and alumni of the inaugural 2015 class of TEF entrepreneurs. She said the process can be lengthy and stretched across disconnected regulatory agencies.

Governments are slowly adapting policies that could help. “When you begin to respect small business in terms of the policies that you make, then I think we will see some of these issues changing. But I don’t think we’re there yet,” she said.

Once established as a nationally recognized business, Happy Coffee established mobile stations around the greater Lagos area serving coffee and tea. Soonafter, referrals led Happy Coffee to manage tastings at weddings and corporate events. This year she was also selected as the official beverage for the “tea breaks” during the TEF Forum. Adeyemi serves her hot and iced coffees at a local cafe, and in 2018 plans to introduce coffee carts run by women at local markets.

“Quite a long way I’ve come since 2015,” she told Devex. “The idea is that a business can thrive in an economy this tough.”

2. Document everything

From the initial business plans to daily operations, entrepreneurs told Devex that keeping track of all paperwork and expenses is vital to the growth of a startup. A well-documented business also facilitates access to finance, providing proof of a company’s development over time.

As one of this year's TEF entrepreneurs, Donkor Akua of Ghana offers free samples of chocolate to TEF Forum attendees as part of her marketing strategy. Photo by: Christin Roby / Devex

“I know my numbers and I keep my books,” said Donkor Akua, 2017 TEF recipient and founder of Greetings from Ghana Chocolate. She tracks money carefully “so that I can go to an investor and seek funds,” she told Devex.

Akua first began producing her Ghanaian bean-to-bar chocolate in 2013 with a $1,000 investment from her dad. By year’s end, she is expected to reach $50,000 in sales. She currently employs five full-time employees and staffs up to 20 for special events.

Adeyemi also stressed that small businesses have a difficult time attracting capital “because we don’t have the data [so] someone cannot look at your business and say they want to invest.”

3. Develop a marketing and communications strategy

Entrepreneurs urge nontraditional communications strategies in order to avoid the high prices of spreading messages across mass media outlets.

“If I want to market my brand, I have to [pay] the same prices as a bigger player,” Faleye Olanrewaju, founder of Olanreforward Chili Pepper, told Devex. “I’m at a disadvantage because to let you know about my product, I have to communicate through the media and pay the same prices as big players.”

Faleye Olanrewaju, founder of Olanreforward Chili Pepper Powder, poses outside the forum. His awarded seed capital will help boost his communications strategy, improve packaging, and increase production. Photo by: Christin Roby / Devex

To avoid some of these costs as a startup, Olanrewaju has offered free samples at events and for restaurants. He promotes the health benefits of his chili pepper powder across social media.

Olanrewaju said governments should consider creating a platform that could subsidize and reduce regulatory and mass marketing fees for startups. “Because the world is borderless, my startup has to compete with other imported goods and bigger national brands, so for me to do that I have to be strategically placed to compete successfully,” he said.

4. Never give up

“We have to remind entrepreneurs that failure is an option, and that it will happen during the lifetime of their business,” one African small business owner currently based in Belgium said in a Q&A with panelists at the TEF Forum. “Instead of presenting a perfect picture, we should be discussing how to overcome the challenges that entrepreneurs will inevitably face.”

Brou Konan Henri, founder of Yefa.ci — an online platform that aggregates study opportunities for youth such as fellowships, grants, and higher-level degrees — said that a business’s trajectory should be flexible enough to adapt to change along the way. “Always have an idea of where you want to be next year, next month and make that your focus by doing the groundwork today,” the Ivorian TEF 2017 recipient explained. “We all have ideas, but if we have to master how to present it, sell it, communicate about it, [the idea] will all be for nothing.”

Akua emphasized the importance of asking for help when roadblocks arise. “Sometimes we are too prideful to ask for help,” she told Devex. “But no, you make mistakes so you can learn and go further.”

Adeyemi encouraged those with even the smallest ideas to think big and carefully. “Put your idea together, but have the courage to pursue it and do your research. Know who your competitors are and what you have different to offer.”

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About the author

  • Christin roby

    Christin Roby

    Christin Roby is the West Africa Correspondent for Devex. Based in Abidjan, Côte d'Ivoire, she covers global development trends, health, technology, and policy. Before relocating to West Africa, Christin spent several years working in local newsrooms and earned her Master of Science in videography and global affairs reporting from the Medill School of Journalism at Northwestern University. Her informed insight into the region stems from her diverse coverage of more than a dozen African nations.