Becoming an entrepreneur in Africa is the obvious option for most young people. Africa is known to be blessed for various natural resources but I dare say they aren’t the biggest resources the continent possesses. This thinking has resulted in paying attention to mining and exporting our natural resources which aren’t limitless. That’s, diminish over time. Our key resources are our problems. Problems mean more economic development. Some of Africa’s biggest problems is youth unemployment.
Africa Will Be The Most Populated Continent By 2050.
According to the World Bank, Youth account for 60% the unemployed in Africa. This is a huge problem. But with other problems, this could be a good opportunity to raise economic giants in Africa. That’s, our primary problem is untapped human resources. If we master this, we will be able to deal with the other problems which the second largest continent in size and population. Africa is set to be the most populated continent in 2050 accounting or more than half of the world’s population.
How Can We Make Good Use Of Our Population?
These are quite interesting statistics but what have they got to do with our problems and how to solve them? More importantly what is the link to entrepreneurship?
That’s a great question. My short answer is a lot. But of course, I shall explain.
Unemployment is one of Africa’s biggest problems. And so is population. We have various problems in environment, banking and finance, some societies lack basic needs, how can we create a shared success that makes sure everyone enjoys a healthy and worthwhile life? Now that’s where entrepreneurship comes in.
The basic requirements for entrepreneurship are opportunities and problems. And Africa has lots of that. There is no point denying that.
Entrepreneurship is the way
Entrepreneurship means our vastly untapped human resources can brainstorm solutions to our numerous problems, in so doing create employment for other youth. Everyone benefits. Everyone gets to do something productive.
Tony O. Elumelu, CON, Founder of The Tony Elumelu Foundation says “It is a timely topic because the reality is that no advanced nation has achieved that status without prioritising and driving entrepreneurship and small business growth.”
Having made this point, how can we all become entrepreneurs knowing the problems that inhibit the development of entrepreneurship in Africa.
One of the best theories on how to become an entrepreneur based on a study conducted by Saras D. Saravathy is the Effectuation theory. In this article, I will delve into the five main principles behind effectuation and how you can use them to build a sustainable business which survives the storms of Africa.
Effectuation: How to Be an Entrepreneur as An African
- The Bird in Hand Principle
The bird in hand principle basically means aspiring entrepreneurs must look at what they currently have in terms of knowledge, resources such as money, people you know, and everything that will be useful in making a successful venture. This principle helps avoid looking for funding and outside support such as loans which may become debts if the venture fails.
Using the bird in hand principle helps you to think in terms of what you have and how best you can utilise them to build your business. It forces you to be resourceful. The basic principle of being resourceful is not what you have but what you are able to do with what you have even if it is little.
- The Affordable Loss Principle
You have identified your resources. The affordable loss principle asks you to consider which of your resources you are willing to sacrifice, to lose, to build your venture even if you aren’t assured of success.
In other words, you should only invest what you are willing to part with into your business.
What are the benefits of working with what you have instead of going to look for funding? A lot. One of them is a psychological. Using the affordable loss principle helps the entrepreneur reduce the tension on them to produce results as would be if the entrepreneur gets a bank loan. Businesses often take time to make ends meet. This cuts the perspective of the entrepreneur to making decisions for short term instead of long-term gains.
A good example (but probably unfair) is Snapchat which made no revenues prior to going public but had a valuation of $24 million putting a whooping $4 Million in their cash coffers alone.
Working with the principle of affordable loss helps you to minimize risk and potential loss. Taking off stress related to fears of losing what you don’t.
When you believe there’s not much to lose, you release your creative juices as you have the freedom to explore all that there is to. And that’s what has made some companies really successful. They played around with different industries, products and services before finding their ground.
- Crazy Quilt Principle
Let’s face, you can’t do everything. When you are starting out, you have few resources to work with. In most cases, you can partner with other players who aren’t competitors but can complement your business in certain areas.
An example is suppliers if you source raw materials. You can negotiate to have materials delivered and payment made over a period or when goods have been produced and sold.
If you operate a shipping and transport business, you can negotiate a deal to pay for your fuel after certain periods and in bulk.
The crazy quilt principles force the entrepreneur to think about how to forge alliances which can help the business grow by handling key aspects of the business at a negotiated, favourable payment plans or low-cost models.
In identifying those key players, the entrepreneur must be willing to learn from the partnerships and be willing to change direction of their company based on what works and not their “business plan”. This is partly because when you are starting out, much of what you do is based on guestimates and best practices. You have little “for sure” knowledge. In such stages of the business, your business model is still being developed. Hence, the need for open mindedness and development as the business grows.
- The Lemonade Principle
The key word here is iteration! The entrepreneurial journey is one ridden with mistakes, unproductive partnerships, and many avenues for learning. The lemonade principle says that detours and mistake are a part of the journey and the entrepreneur has to see them as learning opportunities for growth and development.
- The Pilot in the Plane Principle
Pilots have a lot of responsibility. Imagine manning an aircraft carrying over 100 people. They all depend on you for their safe arrival.
So must the entrepreneur see themselves. It is true that life can be unpredictable but the entrepreneur must act in their capacity as pilot in the plane of their business. They must take responsibility for creating the desired results without making excuses.
Uncertainty must be accepted and even embraced. Such an attitude clears the way for more proactive measures in areas such as planning, forecasting, making strategic decisions, adapting to change and running effectively.
In sum, the pilot in the plane principle says the future cannot be predicted as life is inherently inconsistent. But the future can be created through a conscious evaluation of options and making choices.
Effectuation works with the basic principle that we can all build a business through an iterative process of logic. Also, you cannot predict the future but you can control certain things to create the future you desire.
As Africa is in need of innovative solutions to our unemployment problems, I charge you to use these principles to take that step. You do not need the best idea in the world to become successful but you do have to get started to be successful.
This article was written by Enoch Kabange
Enoch W. Kabange is a passionate fellow who sees the best in every situation. He is the Founder of Wordinspired Media, a personal development brand and Alien Media. Alien Media helps businesses and brands create digital assets which can deliver them higher visibility and enable them to grow like never before.
Enoch is a Digital Marketer, Brand Strategist/Consultant, and a Content Writer.
His mission is to inspire millions of people to become entrepreneurs and to pursue their passions by motivating them to the greatness that resides within them.
Website: EnochKabange.com / bit.ly/EnochKabange