We have all heard the good news coming out of Africa. The good news is that developing countries in Africa are the next frontiers for profits and success in global trade. These opportunities are endless, as the former sleeping Dark Continent has emerged permanently into the world stage of profitable global business. It is no secret that Africa has the most precious natural resources in this world and for centuries these resources have been cultivated, harnessed, utilized locally and exported abroad for the use of developed countries such as the US, England and other European countries. Natural resources such as gold, crude oil, natural gas, diamonds, cocoa and a host of other natural resources have been exported out of Africa with little or no benefit to the common man and the masses in Africa. Today, things have changed.
As we live in the modern 21st century, the trend we are seeing now in the countries of Africa is that the average working classes of people are demanding more modern services from their governments and private sectors in order to live their lives driven by this new modern age of the global internet community, the global social networking community and cell phone community. This global exposure to the western developed cultures is achieved daily through the internet for the local people in Africa and through traveling abroad for the affluent peoples in Africa. This global exposure is constantly driving a great deal of modernization of so many countries in Africa. Emerging markets in Africa are led by countries like South Africa, Nigeria, Kenya, Libya and Ghana that have modern civilian national governments that are progressive in nature and always adapting to constant change and modernization needs of the new generations of exposed peoples in the former colonial countries of Africa.
As a result, the western revolutions of computer/internet technology, global TV news media such CNN, phone technology, finance-capital technology, sustainability-green technology, large scale retail shopping technology (on web and on-land), modern city building and environment engineering infrastructural technology, manufacturing technologies, transportation technology, social networking technology, advertisement/marketing technology, sports and entertainment technology and so many other westernized revolutions have already developed their roots in the daily lives of people and in the cultural fabric of so many African countries.
The limitless daily evolution and change in the perception of 21st century modern exposed peoples of Africa has created such a great demand for modernization by the people of Africa which in result has produced the strong demand/need for American style products, services, lifestyles, environments, architecture/infrastructure, manufacturing, technologies, intellectual properties, human capital, capital finances and so many other services. Now the question is how does an American citizen or American business start doing business in Africa? In this article we will outline some very basic ideas as to how do start doing business in Africa.
Following are some tips for starting to do business in Africa.
- Write a business plan for your global business venture. Define your vision, mission/purpose, goals and budget for doing business in one country of choice in Africa. Examine the what, why, and the how of your vision to do business in Africa. Make sure your decision is not emotionally driven but your decision to choose a product to export or service to perform in the select African country is based on the basic business principles of supply and demand.
- Research what countries in Africa will benefit from your mission and purpose to supply your services and products. Contact the US Department of Commerce website (http://www.commerce.gov/) to find out more information and strategies of how to do business in countries in Africa. Visit links such as http://www.buyusa.gov/westafrica/en/79.html, http://travel.state.gov/travel/cis_pa_tw/cis/cis_987.html, http://www.buyusa.gov/westafrica/en/79.html, and other ones you need to Google using key words such as “us department commerce-doing business in Africa” or “us department commerce- doing business in (type country you are interested in doing business in)” will help give you advice and direction as well as more tips.
- Find out products and services you can export out of the USA and also find out what products are allowed in the African country of choice.
- Understand import and exporting laws of the USA as well as the import and exporting laws of your African country of choice.
- Go to the embassy of the country you are interested in doing business with and find out from them the various trade organizations or businesses based in the USA that have contacts with people in Africa that you can meet in the country you plan to do business with. Also, interview credible African born people you know (or that someone you know can refer to you) that are citizens of the country you have an interest in. Be very open to their advice which may be very positive or negative depending on the sources.
- Determine which country you want to do business in Africa with and qualify with research on this chosen country your reasons for deciding on this country. Make sure your decision is not emotionally driven but your decision to choose a certain African country is based on the basic business principles of supply and demand.
- Research and learn the history, culture, social makeup, languages (find out if national language is English because English speaking countries are an advantage for American businessmen to communicate with the natives), government type and style, know the capital and the commercial centers of the country, and so many other things you can learn to make you comfortable about visiting this country and staying for an extended period of time.
- Perform a market analysis of the needs/demands in the marketplace of the specific country you have an interest in. You can get such statistics from the US Department of Commerce’s web site.
- Make an outline of the needs/demands analysis your “unique” products and services will meet as well as determine the value your “unique” products and services will provide for the people in the specific country in Africa you are doing business in. Your products and services have to be a “unique” answer to the desperate needs of modernization of that country. The level of your success is based on the selling the right products and services in demand by the people in the respective African country.
- Once you have developed a good relationship with the credible contacts (you have obtained either from people you know very well in the US that are citizens of that country or are referrals from the local embassy of the country you want to visit) in the African country you plan to do business in.
- Find out credible African born business men/women that have become citizens and residents of the USA that now perform global consulting services to assist American businessmen/women in successfully doing business in countries in Africa. This strategy is the best strategy because these African born business men/women were educated/trained in the American system while they still have the roots, cultural knowledge, ability to speak the local language, they still have families, and they still have credible and trusted business/social/political relationships in their home countries.(As a matter of fact, this profile of credible African born business men/women is the global consulting services that I provide to American business doing work in African countries such as Nigeria.)
- Develop a rough budget to begin this global business. Also, ensure that you have adequate cash flow and equity-debt capital to start, execute and realize your business plan for your unique goods and services. Set up a cash fund in your bank that is exclusively for this venture. Also, make sure your local bank in the USA has international banking capabilities.
- Do an exploratory trip to the country in Africa you are interested in doing business with. If you have a credible contact such as African born business men/women that works as a global consultant (that is a citizen of that country) or you may know someone that knows the business climate of the country as well as having strong contacts and business/social/political relationships, then you can have them visit with you on this trip.
- We recommend several exploratory trips that will build your confidence in your business plan to sell you product successfully. The right research, building of knowledge, right counsel and right foreign partners with right character and integrity will continue to build you confidence in doing business abroad.
- Develop strategy to visit the country and spend week and months there to get to know and understand the local culture, environ, social set-up, commerce principles, negotiations tactics, ways of thinking of local business people, business environment.
- While performing an exploratory trip to the country in Africa, study, research, validate your mission, purpose, vision to do business in this country. Validate the needs for your “unique” produces and services, keeping your eyes open and mind open to change to your original vision for your products. If you are going to import goods, make sure you understand import and exporting laws as well as find out the costs to ship and process your products at the local shipping port or airport of your African country of choice. Develop a relationship with a customs clearing agent in country of choice early so that they understand your business plans and can help you process your goods through the ports.
- While you are in the country on this first trip, make sure you meet a credible local corporate attorney (referred by a global business consultant or someone you know very well) in that country that you can hire to set up all your corporation needs, assist you in setting up bank accounts, assisting you in finding office locations, assisting you in putting your team together, handle all your business transactions as well as miscellaneous corporate setups. Facilitate communications between your attorneys in the US with the local attorney in the African country of choice. Right relationships with people of integrity are the key to success.
- Bring your key staff with you on this explanatory trip so they can understand the intricacies of running a global business in a foreign country in Africa.
- Once back in the US, review all the information you have gathered, all that you have seen, all that you have perceived and analyze all the recommendations and suggestions from all marketing and financial data as well as from your team. This is where you measure your risk and reward. Then after further analysis, create the final decision making strategy that gives you the ability to move forward into the profitable realization of your business plan. This is what I call the “go and no go” point.
Architect Boye Akinola, AIA, is President of Boye Architecture, Inc. an award-winning architectural, development-equity firm here in Atlanta, Georgia with offices in Lagos, Nigeria, Africa. Architect Boye has over 5 years of doing global business in Nigeria, Canada, Dubai and England. Fro more information on Architect Boye, visit his website at www.boyearchitecture.com and www.boyehomeplans.com. Mr. Boye has used these principles and has also provided advisory consultancy to other American firms and Nigerian firms interested in doing global business in emerging countries such as Nigeria.