Opportunities, risks and success for Africa

You need to adapt to two worlds to succeed in Africa. "You have to think First World but accept that you are largely living in a Third World environment," says Durban's Mark Mead of Tireworld Exports.

Mead, who worked for British Steel for some years, settled in SA in 1984 and soon decided to do his own thing because he never liked working for a boss. "I wanted excitement, to make money and to build up a business which was more American than the Americans."

This approach, which meant being brave enough to make trading with the rest of Africa part of the business, worked for him. Tireworld Exports exports to several African countries, including Ghana, Kenya, Somalia, Malawi, Zambia and Angola. The product range includes steel, tyres, flour and car batteries.

"It is important to utilise the African market with its capacity for high volumes There are many trading opportunities, but there is little money. One of the most important considerations when you enter this continent is to make sure your potential customer has the money to pay you. So find out if he has a sound financial record," says Mead.

Even then, things can still go wrong. At first, Mead had problems collecting arrears payments. He recounts how, during the disturbances in Somalia, he entered the country under dangerous circumstances to sign a profitable contract [or the supply of steel, building materials and perishables.

"Africa is the marketplace for true entrepreneurs ‑ people who are not afraid to take risks, have courage, are creative and can think quickly. To determine the risks in Africa, you must understand the hard facts, consider them thoroughly and then rely on your gut feel.

In Africa, there is just no place for the slow processes which are a feature of many traditional SA companies," he says.

Advice for others

Mark Mead has received several awards for his spirit of innovation and subsequent business accomplishments. He is building a network with other enterprising SA businesspeople through Durban's export club. He has this advice for emerging entrepreneurs:

• If someone does you in, forgiving and forgetting is cheaper than drawn-out legal action.
• Don't be too greedy for profit. In the long run, this could cost you your turnover and even lead to your ruin.
• Keep on learning. Never assume you know it ail.
• Persist doggedly; don't give up. "I keep returning to companies or people until doors open up."
• Remember that most entrepreneurs experience more lows than highs. Don't despair.
• It's important to promote yourself. People need to know what your company can do. 
  

"And in my opinion, SA banks are the bastion of conservatism. So entrepreneurs must never think they will be able to build their dreams by relying on the banks. We made sure from the start that we built up good relationships with clients so that they would pay us cash. In addition, we negotiated favourable conditions with suppliers to ensure that we had a healthy cash flow.

 His good relations with clients and suppliers not only form the basis of his business but are part of the gap he noticed in the SA market. “So many people complain about SA companies not being service?orientated that it left the door wide open for me to start my own business." But it wasn't, and still isn't easy. His kind of business means he has to travel to Africa for about four months of the year. And Mead bases the success of the business on everyone at the company being available 24 hours a day, seven days a week.

The reward was that the business turned profitable in its fourth year of operation. Mead admits mistakes were made along the way, but prefers to regard them as "growing pains". "It has taught us to make sure that any mistakes we may make, because of the risks involved, are affordable. it is also important not to be too stubborn."