How to start a business in Ghana (PART ONE)
HOW TO START A BUSINESS IN GHANA (PART ONE)
The Ghanaian economy keeps growing every day. It is thus the wish of the government that more businesses are set up to help speed up the growth of the economy.
We hope that many youths would rise up with business ideas to help support the economy, themselves, and foreign investors doing business in Ghana. This helps to reduce the rate of unemployment in our dear country Ghana.
If you’re thinking of starting a business in Ghana, you’re not alone. Starting a business, no matter the industry can be a hassle. Not to scare you though, but it requires a great amount of time, effort, and hard work.
These days, a lot of people want to be “Entrepreneurs”. But before you dive into the world of entrepreneurship, it’s important you have the right information. To guide you through the process from idea generation to launch of the product.
To help motivate the youth and foreigners to take a step in this direction, here is some useful information to guide you in starting your business in Ghana.
Step 1: Do a complete assessment of yourself
The first thing is to do a complete assessment of yourself. Why do you want to start the business? Is it out of passion? Do you need to make money? To impact your generation? Grow the economy or curb unemployment? Do you want to provide a service or product?
It’s important you know why. What skills do you have? Do you have the expertise and knowledge? What about the capital? Be honest with your answers. Your answers will help direct your path.
Step 2: Develop the business idea
The next step will be to come up with a business idea. What do you want your business to be about? Here’s a great article to help you get started. No matter the industry, it’s important you come up with a unique idea. It should be an idea that would either fix the problem with the existing business or change the whole experience with the existing business.
Keep in mind that whatever idea you come up with already exists. That should not deter you. When brainstorming ideas, don’t make it all about the money. Go for something you have knowledge of and would love to do. As the saying goes, you can only be successful when you have fallen in love with your work.
Step 3: Conduct market research to know your inner circle
“The more you know about your industry, the more advantage and protection you’ll have.” – Tim Berry.
After generating the idea, the next task is to do thorough market research to find out who your inner circle is.
The inner-circle here describes your competitors and targeted customers.
Who else is doing what you’re doing? Which sex and age group is your business aimed at? Which demographic area are they? What percentage do they constitute in the country’s population? To name a few.
Conduct thorough market research about your product to see what others are doing. Who are your competitors? Research on the existing companies in your chosen industry, focusing on what are they doing that you can do differently.
It’s important you have every possible idea about the business you are about to start. This helps you know what you are up for and against.
Step 4: Write a business plan
After you’ve done your research, the next step will be to come up with a business plan. See it as a roadmap for your business. It outlines your business goals and how you intend to achieve those goals.
A business plan is essential to the success of your business. It is a crafted document that outlines every detail of the business. It is with the business plan that you can generate funding and investment for the support of your business.
What’s the purpose of your business? Who is your audience? What do you hope to achieve in the long-run? How will you finance your business? You should address all these in your business plan.
Don’t dread this step. It’s easy to see a business plan as a long, boring outlined detail of your business. It shouldn’t be that way. Your business plan serves as a guide.
It gives you a fair idea of where your business is going and how it will cope when faced with threats.
Here is sample information that you should provide in your business plan:
- Executive summary
As the saying goes, ‘first impression counts’. The executive summary is one of your best chances to grab a potential investor’s interest if you are seeking financing.
Your executive summary should create a lasting impression on whoever reads it. It should be intriguing, compelling, and straight to the point.
It is the summary of your business plan as a whole. It contains brief information about the location of your business office, your future plan, and why your business idea will be successful.
This section should highlight the strengths of your plan. It should include your mission and vision statement, company information, and financial information. Also, products or services, growth analysis, and summary of future plans.
If you are a start-up business, you will not have that much information as an established business. It is thus better to stick to your strengths such as your background and experience. You can also show that you have done a thorough market analysis as indicated in step two above.
- Company description
This section is for the provision of a high-level review of the different elements of your business. In the company description, describe the nature of your business and list the demands that you are planning to meet.
Explain how your products or services meet these needs. List the targeted market that your business will serve and explain why you believe your business will be successful.
- Market analysis
As indicated in step two, it is important to research and study your industry, market, and competitors. After this, you can be able to make an in-depth analysis of your findings in this section.
In your analysis, you can include a description and outlook of your industry. Also, information about your target market, distinguishing characteristics, and how much market share you can gain. You can also include pricing and gross margin targets with your competitive analysis such as your market share, strengths, and weaknesses, etc.
- Organization and management
There are different legal structures for every business. Identify the best organization and management structure for your business and outline them in this section.
It includes detailed ownership information such as names, percentage ownership, and forms of ownership. And also the profiles of your management team and the qualifications of your board of directors.
You want to include who’s doing what and why they’re on board. It’s important to give a detailed description of each department and its function.
NB: This information is not necessary if you are a sole proprietorship business.
- Funding requests
If you are seeking to fund your business, use this section to outline your requirements. It includes your current need, any future funding need over the next five years, and how you intend to use the funds you receive.
Any other financial situational plans for the future such as a debt payment plan, selling your business, a buyout is necessary.
- Financial projections
Your business plan should include a financial plan. This is critical to the success of any business. How much money is coming in and how much are you spending.
It tells you whether you’re ready to hire new talent or upgrade your office equipment to leave things as they are.
The following is a list of the critical financial statements to include in this section.
Historical financial data: If you own an established business, you should supply historical data related to your company’s performance.
Prospective financial data: All businesses, whether a startup or established, should provide prospective financial data. With all these information penned down, your business idea is now becoming a reality.
Step five: Seek business training and assistance
The best way to prepare yourself and your business for long-term success is to get business training and reading books like The E-Myth Revisited. Gaining an in-depth knowledge of the type of business venture you are about to embark on is very crucial for your future.
They will help you get different skills and strategies for running a business.
Take advantage of free training and counseling services. Either from the internet, free conferences and workshops, or all. Take advantage of every training program that may cross your path.
Learn about everything that you can. Including entrepreneurship skills in public relations, customer service, negotiation skills, branding, advertising, and much more.
Step six: Finance your business
Have you figured out how you’ll cover the costs of your business? Do you have the means or you’ll have to seek funds elsewhere? Do you have an idea how much you’re going to need?
One of the common struggles start-ups face is finance related. Why? Because they run out of money before they even start making a profit.
We cannot dispute that all businesses are always funded one way or the other, no matter how small it is. As a start-up company, it is advisable that you seek for government-backed loans, venture capital or research grants to get you started.
Such financial supports come with reasonable interest rates and terms of payment.
There’re different ways to fund your business. You can find it yourself, talk to friends and family about it, or ask for a grant. You can also start a crowdfunding campaign, join a start-up accelerator and seek a loan from the bank
One way to get such funding in Ghana is through the Youth Enterprise Support (YES) initiative. The aim is to provide financial and expert advisory support for businesses.
Step Seven: Determine the legal structure of your business and register your company
You need to know what kind of entity your business fall under before you can proceed to register. There are some legal structures to choose from. They include the Sole proprietorship, limited liability Company, Partnership, and Corporation.
Determine which of them is best for your business and then register it. But first, you should understand all the legal structures and their pros and cons to be able to make the right choice for your business.
In our next publishing, we will have an in-depth look at how to register your business in Ghana. Stay connected.
To add more flesh to your ideas, read part two of this article, and download our toolkit for a vivid idea of how to start a business in Ghana.