How To Start A Small Scale Manufacturing Business In Africa
Are you planning to start a small scale manufacturing business? Here’s some good news to fire up your entrepreneurial flame. Manufacturing has been a huge contributor to the economic growth and wealth of nations. This sector focuses on the production of goods used by the general populace. As such, it is profitable and sustainable, presenting you with several amazing opportunities.
Decades ago, starting a small scale manufacturing business in Africa was a daunting task. This is because of poor access to information, lack of funding, and the absence of innovation. Thankfully, we have information at our fingertips today, several ways to raise funds, and advanced technology. In this post, we will show you a few tips to help you start your small scale manufacturing business in Africa.
Starting A Small Scale Manufacturing Business In Africa – Helpful Tips
No entrepreneur should depend on just passion and a great idea to start a business. That is a faulty foundation, and soon the business will crumble. Here are some things that you must add to your passion and idea when starting a small scale manufacturing business:
Select your niche
Your niche is the area that your business will focus on or specialise in. It is a section of the general market that your products will serve. The market is too large for you to desire to service every need. You need to narrow down your business to certain needs that your products can solve.
Choosing your niche helps to improve your focus. This way, you can channel the available resources more efficiently. It helps you to figure out your target market as well as the competition. This action also gives you a picture of your revenue and the profitability of the business.
Prioritise research
Now that you know your business niche, you must gather as much information as possible in this area. You shouldn’t start your small scale manufacturing business on baseless assumptions. The fact that it is a great idea in your mind doesn’t mean that it will perform well in real life.
You should study the current market condition of the niche you have chosen. Find out about the production process, the best and most efficient production methods, and the required production standards. Also, find out what the competition is doing and how you can steal the market. There’s no cap to how much you should research. Research is one aspect of business that will never end if you are going to succeed.
Write a detailed business plan
A business plan is a map for your business. It shows how the business will work from conception to maturity and the route to success. Your business plan should contain the following:
– Vision statement.
– Mission statement.
– Pricing.
– Product description.
– Organization structure.
– SWOT analysis.
– Market analysis.
– Competition analysis.
– Financial projections.
Without a considerable amount of research, you cannot write a solid business plan. The plan also helps you to raise funds from investors, banks, and even the government.
Choose your location
Manufacturing businesses don’t have it as easy as other businesses when it comes to choosing their locations. This is because of several reasons, such as:
– Government policies guiding where the manufacturing of certain products can be carried out.
– A separation between the manufacturing location and the sales location.
Because of these reasons and many others, you must choose your location wisely. Since you are starting as an SME in Africa, you may begin production from your home. However, you must have a plan to move to a bigger space once your business starts to boom.
Most manufactured products need different sales location. You can choose yours based on your research of marketing channels in your industry and geographical location. Ensure that you choose a location that allows you to scale the business with ease. One such location is taking your business online.
Business registration
This is one of the most important aspects that an SME in Africa must consider when starting a small scale manufacturing business. When we mention business registration, it goes beyond registering your business name. That’s just one aspect, a very important one.
You also need to register with different regulatory bodies, depending on your industry. For example, a food manufacturing business in Nigeria must register with NAFDAC. This body oversees the production, export, import, sales, and adverts of food and drug-related products in Nigeria.
Why should you be serious with your business registration? Here are some reasons:
– Boosts the confidence of the target market in your products.
– Allows you to run your business unhampered by embarrassments from regulatory bodies.
– Improves your chances of raising funds from grants and loans.
– Gives your business a much-needed structure.
Don’t forget to register with the tax regulatory bodies and get all the licenses you need.
Acquire training
As a small scale manufacturer, you don’t have the luxury of paying so many workers when starting up. This means that you must gather as many skills as possible. Doing this allows you to save cost on paying labourers and factory workers in your formative years.
Acquiring training also gives you a more hands-on approach to your business. For example, a baker needs to learn the ropes of cake making and decoration. Most of these training take about six months or less, depending on how quickly you can grasp the knowledge. It will cost you some money, but it is worth it.
Small Scale Manufacturing Business Ideas In Africa
To conclude this post, here are some small scale manufacturing business ideas that you can start in Africa:
– Paint production.
– Hair oil production.
– Beverage and drinks production.
– Cooking oil production.
– Belt and shoemaking.
– Basket weaving.
– Flour production.
– Furniture making.
– Soap and detergent production.
– Baking.
Conclusion
If you are seeking to start a small scale manufacturing business in Africa, the list of ideas is endless. We have shown you a few tips to help your startup. Do you think we left anything out? Share them with us in the comments section.
