Creating a start-up in Africa is a great opportunity to launch a profitable business with a possible exponential growth. There are several steps to follow to achieve success. How to create your startup?
See more: Africa Employer of Record
Here’s some guides to follow :
Step 1: Validation of the start-up idea
All start-up creators know it: everything starts with an idea. An idea for a product or service that meets its audience, its demand. It is not so much a question of looking for an idea that will revolutionize the world but of conceiving an offer that meets a demand. Of course, the more original the start-up’s offer is and the more innovative, technological and disruptive it is, the more the start-up will catch the eye of consumers.
Most entrepreneurs dream that their startup will be the next Google, Facebook or Apple, but what really counts is to make sure that the startup really solves a customer’s problem, that it meets their expectations, their needs.
Step 2: Market research
Concurrently with the idea validation phase, conducting a market study is essential. Because if the product or service idea seems good, profitable and attractive, the question is: is it able to make its place on its market?
What about the competition?
Are there similar or nearby offers?
Is the demand large enough to absorb the offer?
Is the market a mass market or a niche market? Is it growing?
Is it a local market? National? International?
Examining the market from different angles allows us to attest to the viability of the project and the future success of the offer. And to possibly adapt the idea, to shape the product or service offer according to what the market “says”.
Step 3: Developing the business model
Creating a start-up in Africa is like creating a company, and in the process a business model. After having validated the central idea of the start-up, it is now necessary to ensure that the company will be viable, profitable and will generate sufficient revenue. The business model is the framework that allows us to generate revenues.
How will the start-up be able to generate revenue? Which product or service sales levers will it use?
The business model reviews several essential aspects of an activity: financing, value proposition, target customer segment, operating costs. Once the business model is completed, the entrepreneur can move on to the next step.
Step 4: Financing the start-up
The financing of the start-up in Africa can be done in two ways: either by using the traditional banking circuit or via an alternative mode of financing.
The problem with bank financing is that in French-speaking Africa in particular the interest rates for loans are prohibitive, around 15%. For this reason, many African entrepreneurs opt for other financing methods:
zero interest loans, such as those granted by the Africa Innovation financing platform
seed funds such as Teranga Capital: these investment funds are aimed at start-ups with zero turnover
Business angels: the practice is still in its infancy but this business is developing, particularly in West Africa but also elsewhere. Cameroon Angels Network or Ivory Business Angels are two representatives
Step 5: The creation of the company
A start-up is above all a company. It is therefore necessary at this stage to create a legal structure around the project, around the idea, around the offer. Which legal status should be chosen to create the company? Several possibilities exist:
The EI: the individual company functions with a single member. The constraint is that the company’s assets and those of the entrepreneur are not distinct.
The SARL : Limited Liability Company
The SA: Public Limited Company
SAS : Simplified Joint Stock Company
SNC: Société en Nom Collectif (Partnership)
The SCS: Limited partnership
The choice of the legal structure is important, it conditions the functioning of the activity, with or without partners, with or without the possibility to increase the capital…
Step 6: The communication plan of the startup
The web and social networks are essential relays to make a startup emerge on its market. A website worthy of the name highlighting the company, the offer and the team is obviously essential. And social networks can create a buzz around the launch of the offer.
In the same vein, identifying influencers related to the start-up’s theme allows to increase the visibility and to establish its credibility. Influencers are the n°1 opinion leaders at the moment. They are a precious help to generate a strong visibility and a good notoriety.
With high funding, you should not hesitate to create a multimedia communication plan. The web is essential, but the specialized and general press as well as participation in trade shows are old methods that are still effective.
Step 7: The launch of the start-up!
Everything is ready, the idea is good and validated, the business model is OK, the structure is created and the financing is there! It is now time for the start-up to find its first customers, the first users of its offer.
If everything is not perfect, if everything is not yet completely tied up, it is still necessary to jump into the bath. This allows you to get the first feedback from the market, to glean information on the first steps of the adoption of the product/service by the users. To analyze the first commercial and financial benefits. And if necessary, to adjust the offer, to correct the marketing strategy.