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Starting a small business in Zimbabwe? A few tips
04/12/2012 00:00:00
by Graham Nyakudjga
 
 
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HAVING been out of Zimbabwe since 2009, I went back recently and was very much impressed by how my fellow countrymen have adapted to the economical challenges. It's surprising that almost every Jack and Jill has developed some business sense.

Many Zimbabweans in the diaspora have always shown interest in starting a business back home, and this report might present facts that may help to bring that interest to fruition.

With unemployment hovering around 80 percent, depending on whose statistics you use, many people in Zimbabwe are surviving by running small businesses. As solo traders, the vast majority of people are always fighting for customers as they operate or supply similar services or products which in most cases are over supplied.

These are some examples of the most common businesses run by these small entrepreneurs: Transport (taxis, kombis, trucking); Flea markets; Communication (juice cards and selling products on behalf of big Telcos like Econet); Retail and fast foods; Manufacturing (welding and fabrication, carpentry etc); Vegetable markets; Agriculture and market gardening and Small-scale mining (makorokoza).

The above examples are typically the major sources of income for many home businesses but because these businesses are now overcrowded, the operators are not making much money.

Kombis usually operate fully during the rush hour. Due to increased competition, they charge mostly R5 per passenger per trip, which in normal cases costs US$1. This equates to very minimal returns by the end of the day considering again that the police are always on their backs, demanding bribes.

Taxis, small lorries and big trucks have been imported in very large numbers and finding someone to hire you is a struggle. Flea markets are everywhere, and they normally sell similar wares. The people do not have much disposable income hence reduced activity at the markets.

Every two metres, and I exaggerate slightly, there is someone selling mobile top-up or “juice cards” as they are known locally, and the competition for clients is fierce.

Market gardening is producing serious losses as tomatoes, for example, are rotting long before they are sold largely because production has swelled more than market needs.

At the end of November, a bucket of maize was selling for US$3 and green cobs were US$1 for six, rendering maize production useless considering the small farming areas used by peasant farmers who produce most of the food.



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A number of small farmers have abandoned maize production and are now into tobacco farming which is far much beneficial. On the negative side, tobacco farming, unlike maize, needs special skills which might take about three seasons to master.

Currency

During the early days of dollarisation in 2009, all the major international and regional currencies were in use, but now the United States dollar is firmly established as the currency of choice, especially in Harare. Although the South African rand is accepted here and there, the dollar is now ruling the roost.

Street money changers who were pushed out of their once thriving business by the introduction of multi currency are back in the streets. Ximex Mall in Harare is flooded by them as they loiter around holding their mobile phones.

Politics

The political situation is calm although there is a possibility of change for the worse as we approach elections due early next year. This should not be a big hindrance to would-be entrepreneurs  as one can utilise the chaotic situation to his advantage, as long you play your cards right.

If you want to import a vehicle from abroad, this is the time to do so as political decisions are unpredictable, hence importation of vehicles can be stopped any time. Big investors can take the opportunity to invest in mining since the government has allocated a big percentage of ownership towards the locals.

Internet and Technology

The availability of Internet in the country is encouraging. Most hotels have wi-fi and internet dongles are on sale. Social networks in the form of Facebook, Twitter and Whatsapp are being fully supported.

The only discouraging thing is mobile internet which can go for more than a week without working. Sometimes you cannot access 3G and your mobile devise will automatically connect to Edge, which is 2.5G and is painfully slow. The onus is with the Internet service providers to lift their game and provide reliable service.

There are heaps of people who need Internet to run their businesses and at the same time Internet opens many doors to young enterprising Zimbabweans. Due to limited access to computers, other people are collecting a few dollars by downloading music on USB sticks and selling it on the streets, otherwise known as piracy to the musicians’ union. It seems its big business at the former Gulf, near Market Square in Harare.

The Police

The police seem to be doing their job well although they can do better by reducing the number of roadblocks. It's not uncommon to encounter six roadblocks from Harare to Norton. These unnecessary roadblocks harm public confidence in the ZRP, hence the prevalent finger pointing about corruption towards the police.

As to how these roadblocks are impacting on business is anyone's guess. In business, as well as in life, time is money and delays caused by unnecessary interference is money going down the drain. Those in the transport business are affected the most.

The police are an invaluable part of any society, with their key role as overseers and enforcers of the law. I don't know how effective these roadblocks are, but it seems they not changing the behaviour of the drivers. It’s up to the senior police officers to devise new ways to control the kombi drivers than to increase roadblocks which do not show a good picture to tourists whom we are trying to lure into the country.

Roads

Transport is the backbone of economic activity and its viability cannot be over-emphasised. Roads are in a very bad state. A lot of money needs to be channelled towards this very important infrastructure. Besides causing accidents, bad roads slow transport movement and increase breakdown of machinery.

Water and Electricity

Water and electricity availability is another concern, but there is visible evidence of a lot of effort being put towards improving the situation long-term – both in Harare and Bulawayo.

Opinion

As oversupply of similar commodities and services is the biggest growth and viability inhibitor now, one can stand out and do well above others if they can follow basic business rules. One outstanding rule which is being ignored is customer care. Most of these smaller businesses only sweet-talk you to part with your cash and as soon as the cash is in their hands, they don't care about you anymore. They don't consider repeat business as important.

If one can train his workers on this invaluable basic principle that customer is king, they can take their business to greater heights. Another issue that I observed is that quality is being disregarded as unimportant. Bad work on some manufactured products leaves a lot to be desired. If they can insist on quality workmanship, the results would be greatly favourable and those who are paying attention to quality of their work are reaping positive results from referral business dealings.

One more very important thing is housekeeping. It's very crucial to work in a clean environment. It gives your clients the impression that you are proud of your work and know what you are doing. Isn't cleanliness next to godliness?

Should you start a business in Zimbabwe now?

To start a business in Zimbabwe at the moment is frightening, but it's the only way to make honest money. The roads are in very bad shape for the transport business besides oversupply and depressed incomes. The best way to start a small business venture is to spread the risk by diversifying. By so doing, you are assured of returns from different sources performing differently and eventually you grow your purse.

You can then drop those businesses which are not making money and invest more in those doing well along the way.

The property business has been a milking cow from time immemorial. If one is able to acquire several properties, the returns from rentals or sales will not disappoint. Building materials are both affordable and available now unlike three or four years ago when for example cement was like gold.

If you enjoy making decisions and being your own master; if you can differentiate yourself from the rest; if you can identify a need in society; if you have got an idea that can help people, what are you waiting for? Start a business venture and the results are both beneficial and exciting.

Graham  Nyakudjga is a Zimbabwean based in Australia. E-mail him: gnyakudjga184@live.com.au


 
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