5 things to do before starting an online business in Africa

There are a few things you need to consider before setting up an online business in Africa.

Running an online business is a sure way of making substantial revenue on the side or even a main hustle. For some years now, we’ve seen numerous people cash out heavily from online businesses ranging from fashion, cosmetics, food, home essentials and more.

In this post, we will look at five key things to do before starting an online business in Africa. Although the information in this post can work regardless of the continent or country you find yourself in, I have specifically narrowed some parts of it down to Africa with a key focus on Ghana and Nigeria.

5 things to do before starting an online business in Africa

Below is a list of 5 things you need to do before starting an online business in Africa

1. Know your competitors

Before you launch your online business, you need to find out more about the competition, what they are doing to stay on top and their customer reviews. This is essential to help you prepare well before launch. If you plan to focus on Instagram for generating sales, you will have to use the platform efficiently to find other businesses offering similarly what you intend to offer to learn about them.

However, if Google search is your way of generating sales, you will have to use SEO tools such as Ahrefs or Semrush to learn more about your competition, how they rank higher and the keywords that keep them high on the search results page.

You can also check up on Google Business Listings to see reviews from their customers, this is a simpler way to know how to serve your customers better and outplay your competition.

2. Identify your customers

Determining your customer will make it simple for you to market your service and not waste a lot of resources experimenting. Most marketers depend largely on putting a product in front of many people and luring them to buy based on price or other factors. However, if you identify who your customer is based on what they really need and how your product or service can help them achieve that, you will only be left with reaching them to make sales.

For example, running an ad on TV with the hope of reaching parents to buy your home alarm system is not a great marketing strategy, if you study your customer carefully, you would know for home alarm systems, husbands mostly recommend for the home, they watch various videos on YouTube to get ideas and probably read blogs too or perform a simple Google search on “the best home alarm systems”. By simply knowing your customer and how they live, you can serve them better and also place ads exactly where they are without burning money.

3. Register your business

It is normal for most people to setup social media pages for non-existing businesses, run for years and make revenue. That is not a great way to build a business, if you have goals of expanding and dealing with high level customers, you will be required to register your business and get a tax ID. You can simply register your business as a sole proprietor in the early stages, as you expand and hopefully get investments, you can upgrade to a limited liability company or partnership.

4. Get a bank account

As a running business, you will have to also open a business bank account to transact officially through it. Do not take payments through personal accounts or in spend outright cash from payment. Make sure all your payments pass through your official business bank account, this will help you build a great credit score for your business and the bank will begin to trust you which means when you are low on cash, they will be willing to loan you some funds to grow your business. Also, you can setup a monthly payment to yourself as some sort of salary so you do not go to your account day by day to withdraw money for your personal needs, remember, you are building a business.

5. Set up an accounting system

One thing that is crucial to every business is accounting. Knowing the amount of money coming in, where they are coming from, amount of money leaving and where they are going to will make growing your business much easier. Avoid writing in notebooks and sheet of papers because it’s likely you will lose them, water can damage all of them and you will be left with nothing. There are virtual accounting tools that can easily make running your business books much easier, I personally use Zoho Books.

Which accounting softwares are good for running my online business in Africa?

The accounting softwares good for running your online business in Africa are;

1. Quick Books
2. Freshbooks
3. Oze
4. Wave
5. Xero

You can also begin on Google Spreadsheet and later migrate to any accounting software of your choice.

Other benefits for using an accounting software for your small business include;

1. You can tell how much you are making
2. You can setup tax automatically
3. You can easily identify unpaid debt
4. You can generate a balanced sheet automatically
5. It will make auditing much simpler

Final thoughts

If you are starting a small business online in Africa, do not overlook these key points. Many Instagram and SnapChat businesses run on luck and influencer marketing which is mostly not structured, if you take time out to do these key things, you will build a solid business that is structured to operate beyond social media.