Having recently visited Zanzibar, Tanzania for my honeymoon, I was struck at how different it must be to run a business on an island in an African state. Here is part 1 of my observations:

There is a huge copycat mindset in Africa when it comes to small business. If one person starts a business and is perceived to be doing well, others copy them to the letter and open their shop right next door. We observed this a lot in Zanzibar with up to 6 shoe repair shops all next to each other in the main road. Similarly in other areas are car repair shops, bed shops and second hand appliance shops all huddled together in the same street. If you need to be the same as others, then at least move your business to another part of town where you can find customers at their place of need rather than expect them to come to you and then compete with other similar businesses.

The concept of Niche is just not heard of. All businesses are the same, the signage, the layout and content of their shops. From small street vendors to larger store in Stone Town, they seem to be made in a franchise environment. By simply changing the way you do business to be different, you begin to attract a different type of customer and begin to carve out a niche for your business, this lessons the stress of fighting for the ‘share of wallet’ that copy-cat businesses do.

The idea of bartering in an age old trade mark of Africa: People just love to barter and haggle about price and quality. I have observed this to be a national past time in Holland, but it becomes a survival technique in Africa. The only problem is that they need to barter and haggle across many different language and currency barriers. Keeping the different conversion rates in your head as both business owner and customer is often just too taxing to conclude a sale and the customer walks away. The need for a fixed displayed price in both local currency and USD would make it an easier transaction. Shops that do this, rarely need sales people, the products speak for themselves and the price is what it is. As soon as you discount your price, you are actually displaying a lack of confidence in your product.