Monday, 2 September 2013

5 High Risk Start-Up Businesses in Zed

 One of the advantages that having so many unemployed people in a country like Zambia is that many are forced to become entrepreneurial minded. It is now important more than ever to think of ways in which you can earn an income. Even for people who are employed, they are not ruling out entrepreneurship as a source of extra income. The trouble that many novices to the business world are faced with is what business to get involved in. I have rather become bored with the common question, “I want to start a business, what should I do?” Therefore, I have taken the liberty to mention five businesses that if you are thinking about them; you should reconsider.
1. Cross border Trading

I know that some may view this as a low-risk business simply because there are many people who are involved in it. However, there are a number of factors that certain people overlook when they choose to engage in cross boarder trading. These include the place where to source cheap merchandise, their goods will be sold hire purchase and chances of default are high; almost everyone is going after the same market (working class), and selling similar items. The other aspect that most people do seem to consider is that some cross border traders evade taxes. This is done by smuggling the goods across the boarders or finding ways not to declare their purchases. It does not matter whichever way you choose to look at it if you do not pay taxes it is evasion. Business needs to be done honestly.
2. Publishing a Magazine

Every time I visit a book shop, I notice a new publication on the shelves. I wonder why many people have not yet realised that publishing a magazine is very risky because the chances of success are very low. There are only a handful of magazines that are able to still stay afloat such as Bulletin and Records (in my opinion, the best publication in Zed), AfroBride, Lowdown and Zambian Traveler. The challenge with starting a magazine is that the readership is very low. Magazines thrive on customer loyalty, and that is hard to obtain in Zambia. The pricing is also critical, the only way a magazine can be cheap is if you have enough companies advertising. Printing costs in Zambia are still high and therefore, the only way to print cheaply is to do it in huge numbers, which can be costly.
3. Internet Café
A few years ago, the Internet café business was booming. There was an Internet café on almost every corner in Lusaka. However, with the peaking of the telecommunication industries in Zambia with it came the inevitable death to the Internet café business. The reduction on the price of the smart phones and portable Internet modems has become more convenient alternatives to the Internet cafes. I personally cannot remember the last time I went to an Internet café. Internet cafés have to rely on low per minute costs and rely on volume of customers to make their money. However, if there is a low inflow of customers it becomes really difficult to break even. Besides this, you have chaps who download movies and eat at your bandwidth hence reducing the speed. Nothing is more frustrating than a slow internet connection. I foresee a situation where internet cafés will be the reserve for tourists.
4. T-Shirt Printing

This is one of those businesses that is seasonal and does not always guarantee a flow of income. T-shirt printing is usually centred around events where companies need to wear T-shirts such as on Labour Day or Teachers Day. Other than these events, the next business will come from schools. The trouble is that this is already a saturated market and people have stopped asking for customised T-shirts that can see you through the periods when there is no business flowing in.
5. Owning a Mini-Bus

I deliberately left this for last. This one is rather controversial and people will definitely have divergent views. Regardless, I still classify running a mini-bus as risky business. The prevailing conditions are what make mini-buses risky business. There are way too many buses around and there are always battles for passengers. There is also the risk that the drivers may not take care of the mini-buses well; therefore, instead of the bus bringing money it spends a huge amount of time in the garage or pounded at some police station. The transport industry is perhaps one of the most heavily regulated not only from the Road Transport and Safety Agency but also from the police. The only way that I see a minibus being less risk is if the owner of bus is the driver. Aside from the operational costs, it is also one of the most stressful businesses.

The fact that something is a high risk does not necessarily mean that it cannot be profitable, or it will not succeed. The challenge is how to reduce the risk and finding a way in which it can succeed, after all this is the point of entrepreneurship. Before starting any new business it is important to do your research well, just because you see someone else succeeding at a business does not imply you will too. I am open to be challenged on my list.

5 comments:

  1. Most of what you have listed are indicators of the last few years, business ideas that would have been lucrative (ten years ago) but the financial and social land scape has changed.
    So then the question is what business ideas can be a response to the future, what ideas will take advantage of the current shift in society?
    Basically where do you reckon we're heading as a country and how can one profit from that (hopefully while making the world a better place)

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    1. Hi Jayde, you are right these were once lucrative business some time ago. Yet still some people still think that they are. I think that in Zambia we take time to transition with the rest of the other countries in Africa. We are so risk averse to new things.

      In my opinion, businesses need to be outward looking and not just target the local Zambian market. We need to increase our online presence and transactions. Businesses need to be able to save people time and yet provide quality. With the growing middleclass in this country, businesses targeted towards this group are likely to succeed in this time.

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  2. the business ideas listed here are far from enterprising. Mayb 15 years ago they would have been. There is no innovation in such ideas. Its the same as selling tomatoes just because your neighbour is selling some.

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  3. I guess the most feasible idea among the five is the T-shirt printing. When you plan to put up a business, you should consult the hierarchy of needs to give you an idea. From there, you can have an idea which of them calls greater demand from your target market. And T-shirts falls under the basic needs.

    Clint @FranchiseMatch.com

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  4. When will you be doing another article on this subject? 

    Amela
    t shirt printing derby

    ReplyDelete