Know the lie of the land

DOING DEALS OUT OF A CAR BOOT Cash is a scarce commodity in some parts of Africa because of the lack of banking and other infrastructure. That means you’d better know the ground rules before starting to play.

If there is one thing South African entrepreneurs take for granted, it is the infrastructure that is at our disposal. We have functioning interconnected roads, world-class telecommunication, efficient banking systems and good enough power supply which enables us to conduct business efficiently. But why is infrastructure so important? Well contrary to popular belief, it is infrastructure and not government that is the backbone of a stable and thriving economy. Business efficiency can only be produced when there are supporting structures. If you don’t believe me, go into the rest of Africa and see what difference good infrastructure makes in running a business.

Africa is full of potential but what slows its process to financial freedom is poor infrastructure. Certain basic functions take too long or are done in an inefficient way which makes the whole process incompetent. And this is something you as an entrepreneur are going to have to come to terms with in expanding into Africa.

For example, in South Africa we are accustomed to hassle-free banking; EFT client payments into your account which you can either leave in your account without worry of depreciation or withdraw at your behest. But in countries like Zimbabwe, where there is a cash shortage, withdrawing is a nightmare. In that event, you have to find creative solutions to deal with general business expenses.

What about the internet which we have easy access to and have incorporated into our daily business operations? The bulk of correspondents between clients, banks and suppliers we do over e-mail.

Well in some parts of Africa, the internet is so bad that businesses don’t communicate via e-mail. And it doesn’t stop there. Information about South African businesses and its economy is readily available online which helps businesses make informed decisions. But in Africa, it’s very difficult to find economic data because information-gathering is an onerous task without the right infrastructure. Finally, ancillary services. In South Africa there is an abundance of service providers that make it easier for you to run your business. Such services as clearing and forwarding agents, branding experts, business coaches and even psychologists for you and your employees to help you perform better at work.

Necessary or not, it speaks to a support infrastructure that enables you to operate more efficiently and this is something you might not find in most African countries. Therefore, you must be flexible to adapt to the lack of infrastructure in certain regions because if you cannot deal with a none-to-poor internet connection, then Africa and business is not for you.