Africa is currently a point of interest for many companies. This continent offers opportunities for rapid growth for both newly formed companies and already mature businesses that are looking to expand. However, starting operations in Africa comes with its share of risks. With an unproven economy, one needs to do research to make sure all facts are collected before breaking ground. Part of BBC's African Dream series is an interview with self-made African billionaire Mike Mlombwa. In the interview, Mlombwa provides tips for growing a successful business in Africa and dealing with red tape.
Red tape refers to complex rules, regulations, and bureaucratic procedures imposed on businesses. The tips to overcome these issues, that Mlombwa emphasized during the interview, consist of the following:
- Identify all regulations
- Consider positive questions
- Focus on those which will make a difference
- Identify business partners
- Empower your managers
- Culture change
- Develop a compliance dashboard and reporting tools
- Build an audit trail
To dive deeper into a few of these points, a company who wants to be successful in African countries needs to identify all regulations pertinent to the location it is targeting. Doing so will help avoid penalties and fees due to non-cooperation. Empowering managers is also very important in building a successful business. Companies need to give managers guidance as well as the tools necessary to comply with and manage regulations, in order for compliance to be a central focus. Companies must also build an audit trail to ensure proof of compliance with regulations.
It takes a lot of preparation before one can start up or expand a business in Africa. Dealing with red tape within African countries presents a large issue that needs to be at the forefront of companies' planning and strategy. Taking these tips from a fellow businessman in Africa can help businesses become successful in Africa.