The Do’s and the Don’ts of Business Initiatives in East Africa

Eran Feinstein is the founder of 3G Direct Pay Limited , a global e-commerce and online payments solutions for the travel and related industries. With over 14 years of leading technology, sales, marketing and operation teams Eran is an authority in the East African e-commerce and payments arena. He’s also an avid marathon runner.

East Africa is thriving and blue ocean business opportunities abound in the region.

Succeeding in East Africa requires strategizing, planning, and creating a team that is familiar with the region.

This market is very different from the western world. The difference creates opportunities, but you must adapt to its realities.

East Africa is a thriving region of business opportunities and many startups, growing businesses, and enterprises are setting their sights on infiltrating this blue ocean market. But doing business in East Africa requires a different approach: it is not the 51st state and to succeed here, you must acclimate to the region, its people, its culture, and its governments.

As with any business initiative, the most prominent “Do” and “Don’t” of doing business in East Africa (or any new region, for that matter) is this:

DO invest resources in doing due diligence. Research the market as it pertains to your industry, understand everything you can about the region, acknowledge the differences and strategize to capitalize on them.

DON’T go at it alone. Succeeding in this part of the world takes a proverbial village. Get the right people on your team to help you accomplish your goals.

When I think back to the strategic stages, I wish I had known then everything I know now. Some elements, I planned well; with others, luck played an important role; still others, setbacks and failures taught me a lesson or two. Since then, the years of running a business in East Africa have been my teacher.

Business Strategy for East Africa

Planning and strategizing your business initiatives ensures that you have the forethought and tactics to succeed in Zambia, Kenya, Rwanda, Tanzania and Uganda.

DO keep it simple. This may be a universal truth, but especially in East Africa, the simple solutions are the most effective. The region has many problems and western thinking may be able to solve many of them effectively in ways that are uncomplicated and profitable. East African sectors ( that are in need of your simple solutions include: Agriculture, Food Processing, Construction and Real Estate, Small Industry, Tourism and Hospitality, Information and Communication Technologies, Trade, Transport, Energy, and others. The opportunities are endless and if you have an idea on how to simply solve problems in any of these sectors, you are on the right track!

DO think ahead. Write your business plan for the future. Understand the opportunities that exist today and plan to continue improving your vertical well into the future. Maintain your focus on WHY you are doing what you are doing. I think that a 5-year business plan is a good place to start. Planning for the short-term is just not enough.

DON’T be afraid to deviate. While you plan ahead, sometimes unique and timely opportunities present themselves due to the revolutionary business climate in East Africa.

DO make friends, create business relationships, and build a team that is committed to your business. Having local friends will help you get a real feel for the region and its people. But friends are not enough. Get yourself a local lawyer who can guide you through the legal process of your new local activity. The EAC saw its 5 governments implement a total of 9 regulatory reforms last year to improve the business environment for local businesses and encourage entrepreneurship in the region. ( Navigating these ever-changing regulations and reforms will require ongoing legal consult. Your African friends and advisors will be able to shed a lot of light on the realities of the region. Always listen to their input and advice without letting your experience in your country impair your understanding.

Business Process in East Africa

Once the first stage of your planning and strategizing is complete (the full process is never really complete), you can move on to the actual processes of running and managing your business. A few tips:

DO be patient. In this part of the world, things take time. Penetrating a new market with your solution can be a long process. Move slowly and steadily ahead. Continue taking steps on your journey and maintain your long-term targets in your sights.

DO embrace technology. Using technical advancements in your ongoing operations will free up your time to advance your business. Cloud computing services can help in many realms and are easy (and affordable) to start small and scale up as your business grows. Mobile systems are very advanced in Africa. In fact, many Africans use their mobile in lieu of a bank. This is the reason my business has been successful and I strongly advise you that whatever your business model, in East Africa, you must accept mobile payments for your solution.

DON’T underestimate laws, governments, and regulations. Though they have been reduced and simplified, starting a business in the EAC now requires an average of 8 procedures and costs an average of 33.6% of income per capita — compared to 12 procedures and a cost of 140% of income per capita 7 years ago, in 2005. ( Use your local team to make sure you adhere to governing regulations.

East African Business Opportunities

Whether you are considering starting a new business in East Africa, establishing a branch office of your existing company, or investing in an East African business, the opportunities exist. In many ways, they are easier and less competitive than the geographic regions you may be used to. In other ways, they may seem more (or, differently) bureaucratic. When you are well prepared, have a good idea, and recruit a reliable team, African business opportunities can bring you a lot of success.

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