Business top tips

We know building a business in Africa isn’t easy. It takes years of practice, not to mention a certain amount of trial and error. The expertise our investment team has acquired over many years is invaluable and something our partner entrepreneurs benefit from on a daily basis. We believe in sharing the skills and experience of our team to help support as many entrepreneurs as possible. So whether you are just starting out, or are at the critical expansion stage with your SME, we have canvassed our senior team members for their top tips to help you build your business, and to help get you ready for investment.

Setting out

Business plan ownership

Barnaby Terry, Investment Director, West Africa

Write the business plan yourself; don’t get advisers to do it – and make sure the senior team contributes and takes ownership of the document.  The business plan is not just a document that private equity groups like to read, it’s the vision, the business case and action plan for your company.  It’s an important exercise in determining the future direction of the business and ensuring the whole team is behind it.

Size matters

Barnaby Terry, Investment Director, West Africa

Is the market you are addressing large enough? And are you targeting a niche within that market? Become a market leader in your niche and progress from there. Remember that as a private equity investor, we eventually need to exit our investment in your company so size of market is important to ensure you are of interest to an investor in the future. As a general rule, we would expect the company’s revenue to be at least five times the size of our investment in four years – so think big!

Know your audience

Anthony Gichini, Partner, East Africa

The first thing you need to understand when starting a business is your customer market. What is their problem and what is your solution to that problem? It is a proven fact that people will pay a premium for a unique offering which makes their life simpler.

Revenue counts most

Stephen Dawson, Chairman and Investment Director, East Africa

In business plans the revenue number is the hardest to get right but by far the most important; spend 90% of your effort on the aspects that lead to the revenue number: market size and growth, competitor offerings and your competitive advantage,  pricing, marketing, converting prospects into customers, routes to market etc.

Start-ups: simplicity is key

Christian Opoku Biney, Partner

When planning your new business, you need to focus on a simple product or service that has a clear value proposition and business model.

Validation

Barnaby Terry, Investment Director, West Africa

To be successful, you must validate your offering with real customers before launch.  This is an iterative process that takes time, and cash preservation is key during this phase.

Don’t try and do everything yourself

Paul Fitzsimons, Investment Director, West Africa

Surround yourself with people with experience of the industry you are focussed on – you don’t have to agree with them but they can often have helpful insights or contacts which could grow your business more rapidly than you can. You can also learn from their past mistakes, as opposed to finding out for yourself.

In business, starting to grow

Ready to expand, looking for capital