When I started to envision how I could start my first business in South Sudan, I made a lot of mistakes because i just barged into it (everyone does). While mistakes are unavoidable, you can use the lessons learned by others to prevent them from taking you down before you could even start yours. Now with over four years in business in South Sudan, I see entrepreneurs rushing to start their businesses before looking up on factors they need to consider, particularly in South Sudan. At the end, they end up making the same rookie mistakes repeatedly, and I recognize them because I made them too. Here are the top ten factors to consider when you want to start your own business and avoid mistakes that entrepreneurs make and how to avoid them in the context of South Sudan. Note that these factors are exclusively in the context of South Sudan and may not be applicable to other regions.
Note: The order in which these points appears doesn’t mean that one is more important than another.
- Registrations of the business entity.
Speaking from experience, and while this is the easiest thing to do in other countries, well, in South Sudan it’s not. Depending on the business you want to register, this takes longer than you think. It takes 2 weeks to get it done unlike in other countries e.g Rwanda where you can get it done in less than 24 hrs. electronically. The good thing is that it doesn’t cost as much as in other countries- It goes between 800$ to 1000$ to get all the documents done (Certificate of incorporation, Membership certificate, Tax identification certificate, tax clearance certificate, import and export permit, operation license etc).
- Suppliers
Identifying potential suppliers needed to produce the service or goods you will sell in South Sudan is difficult as there are no industries in the country. Before you start your business, you will need to prepare on importation policies for your business. Most of the businesses in South Sudan import goods and services from the neighboring countries, this mean that the country has created high dependency ratio on the neighbors. Therefore, before you start, you will need to consider their price, location, reliability and product quality.
- Location
In many business events I’ve attended like “Business connect in South Sudan”, I always hear this advice “location is everything”. “Location, location, location”. It’s true that location is everything particularly in South Sudan, there are places where you will need to be located depending on the type of business you want to start. The wholesalers of consumables are mainly concentrated at Konyokonyo market, which is also mixed with farm produces from Uganda, clothing as well as general electronics shops in the area. The population traffic in this market is quite high and there are plenty of chance for your business to be notice if position there. Other markets like Malakia is mainly on vehicles consumables, bookshops and electronics shops. This is the second visible market you want to consider positioning yourself in.
Make sure you identify or look for the best location for your business. Your business must be seen by your target customer or at least near them.
- Operating Expenses
It’s important to first identify and list down all the expenses or spending you need to operate the business such as salary, rent, office supplies, utilities, etc because in South Sudan, all these expenses are paid in US dollar due to the high inflation rate in the country. The government has introduced floating exchange rate in the country; therefore, this is something you might need to consider in your business. Consider the monthly costs in your business plan. This step is also important in your capital requirement because normally you must keep at least six (6) months to one (1) year of monthly spending as capital. Juba being the most expensive in world, expect huge operating expenses.
- Hiring vs Outsourcing
In my experience, people management is one of the toughest jobs of business owners or even as an employee at managerial level. I have experienced this in my professional career, it doesn’t matter how rich you are with team management or leading a team. This may be the reason why outsourcing is in demand in other countries, but this is not appropriate in South Sudan because the behavior trend in South Sudan indicate that people have high degree of spending; spendthrift in nature. If you decide to outsource your business in South Sudan be sure that you may loss it all mainly because of instability in the country. If you plan to start a business, include in your consideration if you will hire people instead of just outsourcing it. On the other hand, you will need to consider the salary and other government regulations you need to comply with such as minimum wages of 600 SSP; (200$ converted at government rate)
- Target Customer/clients
In South Sudan, having a service or product to sell is not going to make you profitable if you do not have customers who will buy it. The market is full of counterfeit products being sold with cheaper prices within the market. You will need to create great deal of product or services differentiation to gain competitive advantage in South Sudan. Before you start your business, please know what to sell, before you begin, study if there is a market for it. Identify who your customers are. Remember the saying, a product or service for everybody is a product or service for nobody. The market in South Sudan is currently focused on NGOs, INGOs and UN entities because the services provision is left to them by the government. The constraint you will encounter in this, is the bias practiced in this sector. Create footprint so that it can move you to other entities within the NGOs and UN markets.
- Loans facilities
Unlike in other countries, the conventional banks in South Sudan do not offer loans regardless of any circumstances. Facilities such as overdraft services, deferred payment plans, lines of credit, revolving credit, term loans, letters of credit, and swing-line loans are not available. Instead, the banks benefit from your business through account maintain fees, withdrawing fees, check book fees etc, so it’s better you prepare before starting your business on this.
David Liep 