Developing your business in Senegal

Developing your business in Senegal is a long-term project. To ensure success, there are several fundamental choices to be made in the early stages, and then an essential skill to be acquired.

Choice number 1: a job by reason or passion?

A successful entrepreneur I know in Senegal did a thorough strategic analysis before deciding to invest in fast food at low prices. He didn't know anything about it, but he found ways to train quickly. A gamble that paid off, thanks to the current demographic and economic dynamics.

One of the most beautiful auditing companies in Senegal was founded less than 20 years ago by someone who had worked in the business for more than 15 years, prior to creating his own structure. He leaned on a beautiful franchise that was not yet present. It is now in its fifth subsidiary established in the subregion. Hats off.

One of my friends created a "search fund", that is, he raised some money to finance the search for a company to buy. He is planning to raise more money soon to develop it. This is probably a profitable approach, which saves the entrepreneur the pain of having to go through the initial start-up phase during which the risk is very high. To be continued.

At Beautiful Soul, we chose a profession out of passion. Risky bet: at the beginning of the activity, the size of the local market was marginal and the maturity of customers on the subject very low. At the same time, after a lot of back and forth, my partner and I did were set on doing this and nothing else.

Choice number 2: the method of financing. You have several options:

  1. Raising money in the form of capital: this can allow you to go faster if you are already on the right track. One of our clients – a pan-African fintech - has successfully chosen this path, raising a final round of $15 million. Be careful, however: the level of pressure put by investors rises rapidly when the figures delivered are not those initially promised.

  2. Raising money in the form of loans: if you have property to put as collateral, why not, but make sure that your business can really generate the cash needed to reimburse the loans (real estate, etc.) On the other hand, the Delegation for Rapid Entrepreneurship (DER) seems to offer loans on advantageous terms.

  3. Equity financing: it's slower, but it gives you time to test several approaches without having promised anything to anyone. You will enjoy greater freedom to change courses and, above all, you will sleep peacefully. This is the option we chose at Beautiful Soul

  4. Another alternative is the "FFF" (family, friends and fools) that is to say amateur investors... They will not necessarily put as much pressure on you as professional investors. Many taxis in Dakar are financed in this way, and proudly display "thank you mom". Beware though, family meals may be a little tense if the project does not work out.

Choice number 3: formal or informal?

A crazy question, one might think, but not so much if we know that 97% of companies in Senegal evolve in the informal sector.

One of my entrepreneur friends who experienced both situations told me that in the informal sector, you end up paying as much taxes (or similar), but in a less predictable and more "fluid" way.

It is probably first and foremost a question of personal values and level of education. When I see the administrative complexity of running a business in Senegal compared to the level of education of the population, it does not surprise me to see so much informality.

An essential skill

In addition to the skill of finding business – which applies in any country – the essential skill for success in Senegal is the management of men and women.

Finding talent in Senegal

All the entrepreneurs I know - without exception - tell me that finding human resources is a real headache.

Indeed, profiles with high potential easily find jobs in institutions known to all; United Nations (27 agencies in Dakar), donors (some embassies pay local executives very well), Sonatel (a package designed to build loyalty).

Most professionals in Senegal live with the pressure of financially providing for members of their personal circle. No wonder that in this context, they choose the security offered by these well-established organizations.

In summary, you will probably have a team of rather young and motivated people but not necessarily well trained. Your ability to support them will be THE essential lever of your development. And for that, at Beautiful Soul, we can help you ;-)

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