Ghana is becoming one of the most vibrant and developing startup havens on the continent. The country is finally catching up fast with countries such as Egypt, Kenya, Nigeria, and South Africa as some of the continent’s giants when it comes to startups.
Startups are often seen as businesses that are just starting out and have the potential to expand quickly. Due to variations in setup and vision, we can say that all startups are SMEs, but not all SMEs are startups.
These entrepreneurial endeavours are often founded by one to three entrepreneurs, who concentrate on creating a marketable product, service, or platform in response to a perceived market need.
Gleaning from continent-wide prospects, Africa is going digital as a result of a decade of economic expansion, rapid urbanization, internet penetration, and the bankability of its population.
Technological innovation is advancing quickly. Ghana is no exception, as internet penetration has increased over the past five years.
Ghana is leading the area in technical innovation, and the number and size of digital enterprises are increasing, heralding the arrival of the Fourth Industrial Revolution in the nation (particularly since the onset of the COVID-19 pandemic).
As a result, the number of startups has dramatically increased.
Given that the majority of Ghanaian businesses are informal SMEs that still don't use technology or digital solutions, the startup ecosystem's potential for innovation and growth in Ghana is still mostly untapped.
Talent & Government Plans
Talent is one of the key components of any start-up ecosystem, and Ghana is developing a sizable talent pool of future digital leaders.
Ghana's development is a result of a number of positive factors, including substantial consumer and business markets, highly developed entrepreneurial skills, and a robust corporate sector.
To succeed, most startups require the ideal combination of networks, financial markets, rules, and culture. Over the past ten years, Ghana has created an environment with a lovely interplay of these elements.
The Ghana Government in recent years has launched various initiatives aimed at developing a robust entrepreneurial and startup ecosystem. For example, to tackle the Ghana government introduced the "National Entrepreneurship and Innovation Plan" (NEIP) in June 2017 as a $10 million program to address the funding gap and lower youth unemployment.
The government's main method for aiding start-ups and small businesses is now NEIP.
NEIP has given over 7000 entrepreneurs across ten areas of the country specialized training in entrepreneurship and business development through tech hubs.
Again, it has provided 500 of those 7000 entrepreneurs with some initial money to support their most viable business concepts. Additionally, the government promises to give tax benefits to NEIP participants based on how many workers they employ.
Africa Startup Acts
We are starting to witness momentum in the legislation space across Africa as more countries begin to find the middle ground to launch Acts to regulate their startup ecosystem.
Startup Acts are extensive legislative and regulatory frameworks designed to promote entrepreneurship and make it possible for new businesses to develop with strong growth potential, typically by providing specific incentives (tax, subsidies, procurement, etc.).
Tunisia, in 2018, paved the way as the first country on the continent to pass the Startup Acts and this has been followed by Senegal in 2020. Other countries such as Rwanda, Mali, Nigeria, Ghana etc. have all activated conversation to be next in line.
Startups can function with the security provided by a defined framework for expansion thanks to legislation. With the help of this legislative mechanism, innovative businesses with high growth potential are formed more quickly.
We cannot certainly talk about the startup ecosystem without touching base on the availability of strategic organizations such as entrepreneurship hubs, which have become the key and major driver of growth.
Startups and incubator hubs have become inevitable when it comes to startup ideation, execution, and growth.
Entrepreneurs and startups need a lot of capacity-building and support systems in order to succeed, and that is the critical role played by these entrepreneurship hubs, which are growing across various regions of the country.
While most of these hubs are technologically driven, there are equally some of these hubs that are specific to certain niches, such as women's entrepreneurship, students’ entrepreneurship, as well as covering multiple sectors to sector agnostic hubs.
Annan Capital Partners is currently building a pipeline of critical support systems through their venture building platforms, including crowdfunding setups.
There are 1000 and 1 factors deemed critical to be considered before launching any business idea. These are mostly universally and globally acceptable factors and are not necessarily applicable to a single country.
It’s fair to say that in venturing into Ghana’s startup space, these would be some of the few key factors to be met.
A great idea
It is obvious that no company can grow if it doesn't have a brilliant idea. The growth of your company will be solely dependent on a brilliant and workable idea.
Additionally, you need to have a distinctive idea that stands out in the market because there are many competing businesses.
It can come off as naive. But if you're going to focus on making your business idea a reality for the next 12 months, enthusiasm is extremely essential.
If your business venture aligns with your passion, you'll succeed as an entrepreneur. Even if you start anything, if you don't believe in it, you might not be able to stick with it over the long term, regardless of how successful it may be.
It is one of the most crucial things that will enable you to overcome all obstacles and challenges.
You will encounter many dangers and difficulties during this process, and your optimistic outlook will be the only thing that will keep you alive. To build your own business, you will have to put in a lot of effort.
The funding of your business is the next crucial component that needs to be taken into account. You must accurately pinpoint the resources from which you will be able to obtain finance for your company.
Additionally, it is preferable to have a plan in place in order to properly manage a company's budget.
In our previous insights, we shared tips on Funding opportunities for startups in Ghana . That article will proof useful as well, as we will soon find out that we cannot discuss the startup ecosystem without bridging the funding gap.
It’s important to develop strategies around the scalability of your idea and adequately defend it.
Scalability can be viewed as a company's capacity to expand when faced with a rise in demand for its goods or services and the ease with which its organizational structure and available resources can do so.
Scalability, then, is the ease with which your firm can grow without being restricted by your organizational structure.
The business plan
Without a business strategy (plan), no company can grow to its full potential. You can get guidance and find out if your idea is workable by creating a business plan. You will be able to determine every necessary next step with the aid of a company strategy.
For instance, a crucial component of creating a business plan that many entrepreneurs skip over is competitive study, allowing you to be on guard against new entrants and how to overcome such competitors effectively.
The completion of legal paperwork is a crucial component that must be taken into account. The first stage will be to register your business, and the documentation of this is referred to as business formation documents.
It’s a mandatory requirement to get your business registered in Ghana, (Registrar Generals’ Department/Registrar of Companies).
This defines how simple it will be for you to set up, but it also indicates how fierce the competition will be. A low entry barrier industry is frequently overrun with shoddy start-ups. It can be quite challenging to distinguish out in a niche like this.
This will easily become known to you during the preparation of the business plan.
Opportunities for startup ideas in Ghana abound across all sectors. It’s almost certain that every sector of the Ghanaian economy has room for more business ideas and opportunities.
Technology is changing how entrepreneurs can create these opportunities in traditional and new sectors of the Ghanaian economy.
Annan Capital Partners is leading in building a venture support systems for Ghanaian startups, after initiating the yet to be launched Agoo Africa crowdfunding platform.
“ Agoo Africa is a crowdfunding platform for African early-stage start-ups’ and small traditional businesses.”
“When launched, it will allow owners of such businesses to make their project and their pitch accessible to a large number of investors, from young non-professional business angels to established international funds.”
Paul Frimpong, CGIA, ICCE
Paul Frimpong is a development economist, top voice on Sino-Africa relations, and an award-winning entrepreneur.
He’s currently the Global Head of Strategy & Membership at the Institute of Certified Chartered Economists (ICCE).
This article is originally curated for and published by: Annan Capital Partners .
Annan Capital Partners (ACP) is a boutique investment advisory and business development agency offering holistic wealth management and venture building services to a wide range of clients, from entrepreneurs to governments and from local SMEs to global corporations.