Africa has been touted as the next frontier, with many opportunities and a demographic dividend that no other continent can match.
Some skeptics have poked holes in the “Africa rising” narrative, pointing out the political and economic weaknesses that have dragged a lot of businesses, cutting foreign direct investments (FDI) that millions hope would create jobs to pull millions out of poverty.
Some companies have stood out amid the challenges, especially banks and telecommunication firms such as Nigeria’s UBA, GT, Access Banks, Kenya’s Equity and KCB, and telco Safaricom, which recently entered the Ethiopian market.
French retailer Carrefour is doing well in the Kenyan market and has embarked on a rapid expansion across the country in the last two years.
It’s natural for investors and firms to be concerned about the risk factors in a particular market, but some things make some businesses successful regardless of the operating environment.
As a business owner, you must build some value drivers to succeed in any market. Experts posit that only 10 percent of startups survive, and in most cases, they need more of the value drivers that can help them succeed.
Businesses with the following qualities can survive in any market and receive strong purchase prospects when selling.
Strong financial performance
Businesses with solid financial performance in Africa can overcome the challenges associated with investing in a new market and attract partners’ attention for potential Joint Ventures (JV).
Financials showing rising profits could indicate that the business is doing well and growing.
It also indicates that the business has some decent margins after paying off costs such as salaries, utilities, and supplies.
Superior or unique goods and services
Africa is largely considered a virgin land with millions of opportunities. Businesses that provide highly sought-after and unique goods or services get an edge over the competition.
Entrepreneurs on the continent have mastered the art of aping and copying ideas of goods or services that do not have intricate or exclusive processes.
A case in point is mobile money agent services. For example, in rural Kenya, you will likely get telco Safaricom’s M-Pesa agent shop after shop. The same is the case in other African countries since some ideas do not require huge capital, or processes are not very intricate.
Strong market position
Ground-breaking ideas ensure that you establish operations in a market long before potential competitors. Operating in a market with a near-dominant position or with few competitors gives you an edge over others.
If you include strategic decisions and a strong brand presence, the business will likely find it easy to enter other markets and build a strong base of loyal customers.
A valuable list of customers
In any business, customers are everything. Customer loyalty, stability, and diversity give a company excellent growth potential.
A solid client base is an indication of likely success in other markets. In this internet age, good feedback and customer reviews cross borders, allowing a company to succeed in any market.
South African telco MTN has managed to set up operations in Ghana, Nigeria, and Uganda, among other countries, with some success. It is the same as Nigerian and Kenyan banks, which have crossed borders.
Having long-term contracts with customers can guarantee stability, helping the company grow.
Strategic and prime locations
For businesses that require physical outlets, locations can be decisive in ultimate success. Buyers like convenience, and a good location can translate to more sales.
Good locations also improve brand exposure and visibility. Besides, convenient locations can help businesses cut overhead expenses, such as transportation costs and access to the right talent.
