June 3, 2015
Millions of Africans are living in the Diaspora, but only a very tiny fraction is developing profitable Africa business ideas. This is tragic. Africa is now widely perceived as the world’s second fastest growing economy and the last global market frontier holding a huge pool of opportunities, but too many Africans are missing out on this.
International companies are now moving in fast – are we as Africans?
We often hear that Africa will greatly profit from a ‘brain gain’ driven by those who have been educated in the Diaspora, who have gathered valuable skills and work experience abroad, who can help bridge the link between North and South.
Although the return of Africa’s Diaspora will certainly significantly benefit the continent’s development, I truly believe that the Diaspora needs Africa as much – if not more. And here is why: While some have carved out a successful career and life for themselves in foreign lands, the hurtful truth is that the grand majority of Africans living abroad is struggling to create a life of meaning for themselves. And with that I mean the millions who do jobs far below their competencies, who struggle to find status and social acceptance in foreign lands, and who carry the burden of supporting those they left behind in Africa.
The reasons for that are certainly very complex, but this scenario really calls upon Diaspora Africans to look at their lives and realize that they should not settle for this. Don’t get stuck in conformity, submission, and a hopeless outlook – especially when you feel the impact and often harsh burden of a minority or refugee status weighing heavily on your shoulders.
Life is not an easy journey, and I think Africa has internalized that universal truth collectively like no other region on this planet. But times are changing in Africa for the better. Where frequently timid policy makers have improved governance over the last few years, businesses – in particular those lead by the new generation of Africa’s young business leaders – are visibly improving the status quo. They have largely connected and united across the continent, they are solving arrears of problems on the ground, and are carving out a grand vision for Africa – one that lets us finally be hopeful and proud. They work towards an Africa that will become a global market leader while consciously integrating social responsibility, transparency, rights, and environmental sustainability. Wonderful! Like Mbeki of South Africa said: ’Today it feels good to be an African.”
A renaissance is taking place in Africa, and we in the Diaspora need to actively participate for the sake of Africa, and for our own sake. I truly believe it’s a call. One that is far bigger than our immediate family circles, our worries about paying the monthly bills, our fears and misconceptions, or our anger about feeling victimized in any way.
We must rise above what ever it is that is holding us back.
Don’t postpone that plan to ‘one day’, because you may be aware of it or not: The time is right now. If you wait for a few more years the market competition in Africa will have become tougher making the entry from abroad significantly harder. But above all, the time is right now, because Africa needs you at this moment more than ever before and because you – after all you may have gone through – deserve better in life.
So, in one sentence: It’s about realizing this opportunity at hand and deciding to be in charge of your path from here onwards. That’s it.
If you are convinced that you cannot relocate to Africa at the moment because of family matters, or lack of finance, or visible risk to your personal safety or business plans back home, I want you not to worry. Today, I will introduce some Africa business ideas which you can start immediately – wherever you are in the world. This approach will nevertheless allow you to get your foot into the African market and connect with consumers, sellers, and stakeholders on the continent during what may be your first phase. But above all, starting your Africa business allows you to work towards a self-determined and meaningful path building greater prosperity for yourself while positively impacting on the lives of others. We need to be aware of Africa business ideas for the Diaspora!
One more important note for you: Target the market of your African home country only if its is a dynamic economy with many opportunities. If your country is seriously struggling in this regard, I absolutely suggest you focus on another African market for your business. Once you made it, you can then consider taking the burden upon you to face the situation in your home country, if this is your wish. Don’t exhaust yourself during these important start-up years.
So, ready? Let’s get started!
5 Profitable Africa Diaspora Business Ideas:
1. Build a company manufacturing raw products from Africa
This has been happening for decades and centuries, but Africans abroad did not participate! Raw material and agricultural produce have been shipped to the West and the East at a cheap price. Abroad, value is added in manufacturing companies, and the final product is then either sold in foreign markets, or is being shipped back to Africa and sold there at relatively high cost. And while many African governments now work hard towards local value addition, so products are not sold in raw format and more money stays in Africa, this is a huge ambition for the long-term and there is a lot of space for you to come in while building ethical business connections back home. Here are examples – and frankly, the agricultural sector at large is your best bet:
Import fruits or fruit pulp from Africa and produce tropical fruit juice, smoothies, or fruit juice concentrate. This is a very straight forward production method. But now your African connections comes in handy. Don’t go for the obvious such as orange or pineapple juice, as you will face great competition in that regard. Produce rare and exotic African juice mixes such as mango-coconut, guava-papaya, cactus-strawberry etc (well, I am making the combinations up, but I hope you get the point)….find a niche! This only makes sense if you have some money to invest. But it is a profitable business once stores, cafes, or fitness center chains love and buy your brand. I met a British guy, a juice maker, in a London food hall earlier this year selling such exotic smoothies in tiny branded bottles on a small stand. It was a promotion, as his juice had just hit the shelves. One of the smoothies was pure coconut milk, which was tasteful beyond belief. And you guessed, it: rare to get as a drink. He had started sourcing his fruits in Ghana (his production plant was interestingly based in the Netherlands), but he said Ghanians were not advanced in coconut production so he changed it later to Indonesia. It can be done!
Import African leather and fabrics and produce shoes, belts, bags, and other accessories with a special touch of African and Western fusion. Start this in a little workshop or your garage and grow it from there. The African Diaspora will make up much of your customer base!
Import special African herbs and start your own African herbal essence beauty range or health products. That’s exactly what Magette Wade from Senegal has done in the US, and she has built a very successful luxury brand with it, called Tiossan! Be inspired and have a look at the Tiossan beauty brand.
Import coffee, roast it, and start your own coffee brand. Alternatively, buy green Africa grown coffee in your country of residence from other importers, it will make your start-up plan easier. You can later source it from African farmers yourself. Now, be smart in the way you market it. One avenue you could use is to tie the manufacturing process and brand closely to the city you live in (works well when you live in a smaller city or town), as you can rally your entire city administration and town hall behind it. This is what an Ethiopian couple did in the US. You could also offer it to the embassy of that country for their guests and functions, approach major hotel chains who are also based in Africa, popular cafes and food stores. Most coffee we drink in the West comes from South America, although the world’s best coffee is grown in Ethiopia followed by Kenya – the leading experts on coffee just agreed on this again this year, you can read more about this here. Well, that’s a strong selling point for your coffee brand, isn’t it?
Extra Success TIP: Instead of buying from big traders in Africa’s cities at a high price, travel onto the continent and work on your own farmers cooperative or production network. Not only will this keep the cost down, but you also positively impact on the lives of poorer Africans in the rural areas.
Selling and marketing your products online will save your business a lot of expenses. But it may also be your best option to penetrate the market with your new product and grow it relatively fast.
Exhibit or sell at local markets and trade shows to get your products noticed by major buyers.
Think about bold and unique growth strategies for your business, this is so important. You don’t want to be selling your coffee brand and bags to neighbors and in shopping mall markets 3 years later. Serious business development should be your goal. So don’t get carried away with your product. Once it’s good, focus on business development and professional marketing strategies that actually work.
2. Become an Africa Import-export trader
Many Africans have become very rich doing just that: import – export. Think of what products you can uniquely offer to Africa from where you live now.
Examples for export
Export pharmaceuticals – think of alternative medicine as a niche
Export used cars, vans, or bikes – this is still big business if done in a smart way – not just simply shipping, but adding a good customer experience and customer service etc to it. Create a brand for your company.
Export oats – you guessed it, they are not being produced in Africa. Yet African consumers in the cities are getting used to having Western-style snacks and breakfast. Just look for oats in any African supermarket (with exception of some places like South Africa and Nigeria for example where you can now buy them cheap), and you will find that oats are offered at an expensive price – the 500 g that you can get in the UK or Germany from low-cost brands at 50 cent can cost $4 in some African countries. Buy oats cheaply from Germany or Poland for example and you can surely beat the expensive competition.
Export baby food – ready-made baby food (except for simple porridge) is hardly available.
Some of the best countries for exports are in my view the DRC and Nigeria: they have both a huge demand within a single market, have local port access, which makes exporting cheaper for you, and they have big populations segments with enough spending power. All these attributes can make your life easier as an exporter. The downside for both countries however, is that the clearing of goods at their ports can take easily 2-3 weeks and more, so keep that in mind and use a trusted local clearing agent.
Make no hasty decisions: what you export should ideally determine the best countries to do so.
But: make sure you study the import regulations of the country you chose as your destination to avoid loosing a lot of money when you realize too late that your shipment is not allowed into the country.
If you however decide to become an importer – bringing goods into your country of residence from Africa – it makes sense to look at the commodities that are needed where you live. Items that can be easily imported from Africa and that have a good market value are coffee, leather, fruits, and flowers.
Local spices make good business with some Diaspora communities. Ethiopian spice mixes are among the most successful.
Extra Success TIP: There is also a space for powerful niches: Leafs of the Moringa Tree for example are used in the alternative health industries in the West due to its enormous health benefits. A few farms in Africa have started to plant the tree for export.
Hibiscus is another niche. And there are many more.
You see, you can either look for farmers who are already producing what you want to import, or you organise farmers to start planting what you need buying directly from them. Farmers are often convinced when you pay more than they make with their traditional crops. But be sure that you can really sell your products (test the market for that) – you don’t want your business to fail and then have a farmer cooperative that goes down with you.
Import-export has far better success chances with trusted long-term partners in Africa. They will also tell you what else is needed locally for import, and you can extend your list of goods.
3. Start an Africa business online
You can’t relocate to Africa and you are short of capital, too? Starting an online business is the way around. Anyone can do it if you are prepared to learn; you can get all technical jobs done by freelancers via elance.com.
Think about how you could link your country of residence up with Africa, For example:
Build a trading platform for certain goods (you are just providing the platform, the goods belong to others), an online market place, a publication, an e-commerce shop, an entertainment platform, a marketing or design agency, a copy writing business, an e-learning center offering courses for which people pay. There are many ways to establish an online Africa business that generates income and when smartly done, these businesses can generate income relatively fast from wherever you are.
Consider these niches: I really believe that you could even carve out some rare niches for yourself with an online business providing what is not widely available or accessible for Africans on the continent: Think legal advice, family and relationship counseling, or school tutoring for example.
Extra Success TIP: Choose your industry and niche carefully and then provide something that meets a concrete and vivid demand out there. Be different – stand out! Create great value for your customers and over-deliver in regard to the information you give or the service you provide – this is how you create the trust in an online world. This is the first step before selling anything.
You will of course be paid for your services, this means you will be paid for the hours you work. To grow your business you can outsource some of the work to freelancers. But a crucial way to make money online is create online products you sell.
4. Provide Africa business services abroad
The number of people who want to do business in Africa is increasing fast and this is a trend that will continue for some years to come. Governments, companies, individual entrepreneurs, and NGOs all have needs regarding Africa. This is where you come in and provide a service in your country of residence and beyond!
There is a big demand for:
Information and advice (yes, people will pay for that!),
Assistance with entry into the African market,
Business matchmaking services,
Relocation advice, logistics, and support,
Shipping and clearance services
Investment & business travel and tours
Legal advice for specific countries
Extra Success TIP: You make potentially more money if you can establish yourself as the expert, but the important point here is that you do not need to necessarily be the expert for the services you provide before getting started, you can also create the network bringing various partners and professionals together under your business brand where you coordinate the services offered.
Or you outsource the services, which is a similar approach, but none of the companies you use is affiliated to your company. So as an example: You become an Africa market research company or a translation company using freelancers to do the researching and translation while you manage communication and work on the growth of your business.
5. Run Africa business conferences or trade shows
It’s one of my favorite ways to get into the African market, because the powerful benefit is that, as the organizer, you are at the very heart of an Africa business networking event creating value for a lot of stakeholders at once. Believe me, the opportunities that will flow in for you after a couple of years stretch far beyond another conference. If business stakeholders who visit your conferences or trade shows trust you, they will approach you with all sorts of inquiries for assistance. And suddenly you become the middle man for several deals and connections in your industry, and you can earn additional money in that position. There is also a great likelihood that you will come across other projects where you can partner with some of your event attendees. And above all, these connections can help you to make quick progress with your own ambitions and projects. All on top of the ticket sales, exhibition stand, and sponsorship sales you will make with your Africa business events already.
Now, think of all the existing Africa stakeholders in your place of residence including government, diplomats, entrepreneurs and other individuals and identify their needs. Or start with identifying a dynamic industry or niche inside Africa, which you would want to take on. The beauty of event organization as an Africa business is that you can do 90% of that from abroad (done it, that’s how I know). If you live in a village somewhere in the US or Europe, think of the dynamic cities like Chicago, Boston, New York, London, Amsterdam, New Delhi, Dubai, and African capital cities as a location for your event. If you arrive a week before the conference to finalize things on the ground, that will do.
Extra Success TIP: Get a well established partner abroad or in Africa, even a chamber, association, or other public entity. This creates instant trust and credibility for your event and they will promote your event, too. It’s good for their image and good for your tickets sales and sponsorship connections, so don’t be afraid of approaching them.
You can also do product trade shows – they are also very popular Africa events that tap into the current economic trend!
6. Bonus Idea:
Find Western companies with a great product for Africa and then get the buyers for them in Africa through your connections, follow up phone calls, and occasional visits on the continent. You have to sign a contract with the company in the West straight from the start that you will be their agent or consultant in a certain African country or region. Then you can earn a percentage for every sale the company makes in the market you opened up for them, 5-10 percent for example. This is another way of making potentially great profits while not producing anything yourself. And once a deal is struck, the money keeps on coming to your account. Now, you just need to find great products, small or large, and many companies will be open to the idea of selling in Africa – this is particularly true for US and Canadian companies where African trade links are now being widely promoted. But I am sure many more companies in Europe, South America, the UAE, India etc. will be equally convinced if you present them with a good strategy.
Now, get started!
Today, I leave you with a little joke I came across regarding remittance payments Africans in the Diaspora regularly make. It went something like this: An African saying about another:” He is struggling, yet he is sending his mama $2,000 from the US every year, so she can have a better life. You know what she does with the money? She buys food. He is crazy, man! He should invest that into doing business in Africa and he could create a good life for himself, his mama, and the entire village!”
Source: Africa Jump Start