You have been taking note of a growing private business sector in Ethiopia. For some time now, you have been considering an entrepreneurial pursuit of your own. But with little information available out there, you keep wondering, what are the profitable and promising sectors, in the Ethiopian economy?
In the next few EthiopiaInvestor Business Briefing programs, we will suggest a few methods for uncovering business opportunities in Ethiopia.
A business opportunity is essentially a product or a service; people in any given market are looking to purchase, but is not available in adequate supply or at reasonable price and quality. An entrepreneur looking to find an attractive opportunity should first determine the list of products and services the market demands. The next step is simply to determine which one of these products or services can be produced competitively within the resources at the entrepreneur’s reach. A third step would then be to rank these opportunities according to which ones tend to be the most profitable and of specific interest to the entrepreneur.
So you may ask: how does one determine the size of the market for any given product? There’s many different intuitive ways. Given Ethiopia’s large annual import bills one place to start is to look at import substitution. Given a growing economy and disposable income, Ethiopians are increasingly spending on food stuffs and consumable products. Ethiopia imported 8.6 billion dollars worth of goods and services in 2008. These are products and services proven to be in demand by the market and are in fact well documented. Visit the Ethiopian Customs Authority or the Addis Ababa Chamber of Commerce and Sectoral Associations Business library to receive the annual list of officially imported items into Ethiopia. Closely study each product and import trends over five to ten year period to get a good feel for the demand in the market. Some of the products imported into Ethiopia may even surprise and shock you. For example, for a country with well suited climate to producing fruits and vegetables, the amount of fruit juices or bottles of ketchup imported from the countries of the Middle East may be surprising.
Having identified and shortlisted a number of products and services in this way, your next step is to do research to see which one of these can be produced in a time and cost effective way and within your budget. To determine this, use internet research, interview those already in the industry, or contract the services of an experienced management consultant. The business idea you pursue in the end must be practical, have adequate market demand, low competition, and long term promise. It must also have reliable sources of inputs required for production. Finally, it must be something you are sincerely interested in.
Now get to work! Secure yours, your family’s, and your country’s financial security.