GET WALKING or START LISTENING
My father's first big business was candles. He started a company called Candlex in the early '80s and it became a roaring success. When he started that business his goal was simple, to be able to buy a basic car for himself and to feed his family; he did a lot better than that. Do you know how he settled on the candle? He walked from shop to shop, analysed the products within and thought about whether he could make that product better.
You can do this exercise with ease. Walk into the many Chinese stores in town and figure out what you can produce BETTER. Word of mouth is a very viable marketing tool in Malawi and when people get wind that you're doing good work they will come.
Alternatively, listen to your friends' complaints. Behind every complaint is a potential business.
The Government can also help to reduce Malawi's dependence on imports with duties, taxes or limited-time bans.
I am personally against excessive Government controls but if you have a genuinely good business idea you can lobby the Government to limit imports of specific goods using quotas or import duties.
It is critical that any such regime is for a limited time only because a) it makes local producers complacent and b) consumers lose out if they are having to tolerate lower quality produce.
LOW CAPITAL IDEAS
So you're a youngster with lots of time but very little in the way of money? Turn to the internet. Internet usage is very low in Malawi so what you should be looking to do with any internet business is to either execute projects for companies or do things for Malawians in the diaspora.
For example, there are many Malawians abroad who would like to send friends and family members within Malawi gifts or presents on special occasions (birthdays, Christmas etc.). You can set up a website with images of the products that local companies sell so that people abroad can order via your website.
E.g. go to local flower sellers, take pictures of their flower designs, ask what the price is and showcase these designs with your profit added on top on your website. People pay you for the flowers either via a local relative or if you have connections abroad you can go into a joint venture with them so that payments can be received via a PayPal account that they manage. When the person abroad buys the flowers, they provide a phone number so that the intended local recipient can be called to collect or an address to which the gift needs to be delivered. You can offer to deliver to certain areas or within a given radius.
The same business model can be rolled out for baby clothes and children's toys. This is a business idea anyone with basic IT skills can start; it can also be a good forex earner.
If you decide to do this try wordpress.com or weebly.com for website creation; you can create professional looking sites within a few hours and with very little knowledge of "code".
"You are surrounded by simple, obvious solutions that can dramatically increase your income, power, influence and success. The problem is, you just don’t see them" ~ Jay Abraham
In Malawi there are many opportunities: we are highly import dependent and for those goods that are locally produced the quality tends to be low.
Even for simple things like bricks and cement people prefer the versions produced in Zambia or Tanzania, our very own neighbours, because the local version is thought to be complete rubbish.
As I have stated in a previous column, if you go into business purely to make money your product will state that purpose loud and clear. Your prime concern in any business should be customer satisfaction. If you create a product with a view to making the customer happy, you'll produce quality. The problem is that this quality needs to be produced at a good price.
Here are a few simple ideas:
I'm very much stating the obvious here but every single person in Malawi needs to eat. The production of a food-related item is very scalable provided people like it.
Animal rearing - whether it's pork, beef or goat can you rear these animals and sell them to the big retailers? Selling to big shops is a great way of selling a lot all in one go; however, if the big buyer chooses not to renew a contract you'll also lose a huge number of sales all in one go. Ensure that all the while you're selling to big stores retail buyers know your business and will look for you even if you disappear from shop aisles. This is where branding and radio advertising comes in.
Condiments - new and innovative herbs or spice mixes are something that urbanites frequently buy. You don't even have to imitate something that is already being made, e.g. Nali or the Royco mixes, do something completely new. I hate it when people simply copy things that are out there: don't imitate, innovate.
Basic school bags are something that every child in Malawi needs. Can you produce something of a high quality at a low price?
You don't even have to produce this yourself. You can travel to China and source quality products. Many people moan about the poor quality goods from China but China produces a whole range: those fabulous clothes in UK and US stores also come from China. You get what you pay for and if you can buy large volumes you can get heavy discounts on quality products from the very China that currently sends us its cast offs!
Ceramics and china dishes are not scalable in Malawi. However, if you can source or create quality plastic or metal utensils different to what is currently available, you can do well.
The types of plastic and metal plates currently available haven't changed in years; it's the same thing year in and year out. If you can design your own range and get that produced you could do well.
4. BASIC PERSONAL CARE: SOAPS, LOTIONS, BODY SCRUBBERS etc.
Another scalable space. Makeup is less scalable because most budgets cannot stretch that far.
My own father used to operate in this space and by producing a basic quality product he was competing with Unilever (Lever Brothers) an international company. Don't be intimidated by the presence of multinationals; in fact, in the current economic environment many international companies are deciding to leave. This presents opportunities for Malawians to produce goods for their own people. Look at who's leaving and see how you can fill the gap.
"A man may die, nations may rise and fall, but an idea lives on." ~ John F. Kennedy.
So you've decided that you want to start a business but you're not really sure what you can do. Personally, I like the idea of scale. Try to do something that can be BIG. If you produce a basic product that many people need then you have a large customer base to satisfy and a potentially very large source of revenue.
Secondly, keep in mind that many big businesses started off small. Create "a small batch" of your first product and then roll it out. I use the term "batch" very loosely. For instance, when my dad started his bus company, Axa, he only ordered three buses; when it was established that there was adequate demand for the service he ordered 12 more buses taking it to 18 or so; then the next order took the bus count to 40.
The principles of small batches are espoused in "The Lean Start-up" by Eric Ries. In this book, Mr Ries, a successful young entrepreneur talks about a variety of businesses that have established a "minimum viable product" (MVP), and marketed that before going big into a business.
The MVP is the version of your product that has the fewest number of features and doesn't cost too much or take too long to produce so as to test the market.
Once the business is started, operational costs can also be minimised by not producing too much stock so that your money isn't tied up in stock. This gives you flexibility. In fact, Toyota's business model is based on this principle. Apparently, when a Toyota dealer sells a spare part (for instance), his stock system sends a message to a central supplier who dispatches him a replacement for the sold part. When that central dealer sends that off his system automatically sends a message to their factory for a new part to be made. It's all automated and that way the operation works without a hitch and with costs kept as low as possible.
What about businesses that depend on your personal labour? So you're a lawyer or a doctor or even a masseuse and your business idea is to start your own practice, can this be made scalable? Yes.
The beauty of this type of business is that start up costs can be very low indeed. All you need is an office; to begin with you can work out of your own home or rent a small space in town. The problem here is that when you don't work you don't make money unlike with manufacturing and selling where you can hire unskilled people and quickly train them to do some of the work for you.
With your own practice your plan from the outset should be to hire other well-qualified people that work under you and who earn a commission for business they bring in with you getting a cut of that revenue because it's your business. Ultimately, when your practice is big enough you should be able to step away from the day-to-day operations because enough money is coming in from the work that your staff produce.
One problem. Are the people you are employing of your calibre or higher? Your goal SHOULD be to hire smarter folk because the higher the quality of your work force, the more (and bigger) the business you will attract. In the long run these guys may leave to start their own practice but for the time that you have them they can be a real asset to your business: train them up and incentivise them to stay.
In summary, think of businesses that are a) scalable, b) produce small batches, c) employ high quality workers or train people up to a high standard.
Want more specific business ideas? Coming next week. This week, I just wanted to give you a framework for thinking.
"I’d rather have one percent of the efforts of 100 people than 100 percent of my own efforts.” ~ J. Paul Getty
For 2 years until early 2014 I wrote a weekly personal finance and business column for Malawi's leading media house, The Times Group. The target is middle-class, working African women.
This is a reproduction of the articles that appeared in the weekend edition of Malawi News.
|Heather Katsonga-Woodward: On Business, Life & Everything In-Between||
On Managing Money