Three common mistakes to avoid when setting up a business in Zambia.
You have made a decision: you are ready to start a business in Africa. So far so good. But implementing this newly won goal confidently and effectively is another pair of shoes.If you’re giving it your all, but your business is still not in takeoff mode, or has been somewhat stagnant for far too long, you may be sabotaging yourself in spite of your best intentions.
Here are three common mistakes aspiring entrepreneurs and first-time investors (especially those from the diaspora) make when embarking on the journey to build a business in Zambia:
- Sitting on your idea for far too long
Taking your time to do in-depth market research is good, but carrying your idea around for too long without making much progress is not. One crucial success factor widely overlooked when doing business in Zambia is to have a sense of urgency. In fact, the importance of that is two-fold. There is a psychological and practical aspect to it.
When you do too much planning, there’s a tendency to think of one reason after another why what you’re contemplating won’t work. When you procrastinate, you tend to lose your enthusiasm. And you may find that all you have done a year later is still researching another business idea.
Equally important is to develop that sense of urgency when doing business in a new emerging market. Yes, Zambia is a pool of opportunities, but that pool is getting increasingly crowded by the day, and once competition intensifies getting started will become even more challenging for you.
Lesson for your success: Move forward with clear intent and focus – delay is a disservice to your ambition and can compromise your success potential.
- Aligning your business or investment concept with the wrong market
If you are flexible enough, I suggest you choose the right market after you have designed your business concept, then make further adjustments as you go along. One business idea may turn into a great venture in one market and completely fail in another. Your business and your market need to be highly compatible, otherwise you are setting yourself up for failure. Too many aspiring entrepreneurs/first time investors fail to adequately take that into account.
Lesson for your success: Who would be buying from you? Make a list of their characteristics. Then list what other enabling factors your business would need to flourish – port access, a thriving tourist industry, locally available mobile payments systems for example, favorable regulations..? Once you are clear about certain factors, choose a market in Zambia that ticks the most boxes for you. Remain as flexible as possible until you find the perfect fit.
3. Waiting for start-up capital
It is widely known there is a scarcity of financial capital in Zambia, in particular for starts-ups. Having said that, far more worrying in my opinion is a widely held myth: that you need a lot of financial capital to start a business. Sure, if your business model is to open a high street shop in Lusaka to sell TVs, you will need starting capital to make it happen. But here is a critical shift you can make in your approach: do not be held back by lack of capital, instead amend or change your business model.
Open an online business, offer services instead of products, build a platform for existing products, enable networking or business matchmaking, start working from home, or get started from scratch in a unique Zambian business niche with no competition.
Despite these options, too many have invested thousands into their start-up too soon and ran out of cash. There are many benefits in starting small and growing your business organically, and Zambia offers a lot of fertile ground in this regard.
Lesson for your success: You want a business that starts paying you soon, not one into which you have to pay great amounts of cash over a long period to keep operations afloat. Amend your model to minimize the financial risk in a market you are not yet familiar with. Do that and enjoy seeing your success grow organically.