Four Good Business Traits for African Entrepreneurs: Lessons for Growth

Africa’s business landscape is vibrant, diverse, and brimming with potential. From bustling markets in Lagos to tech hubs in Nairobi, entrepreneurs across the continent are driving innovation and economic growth. But what separates a good business from a great one? I’ve been thinking about this a lot (probably because I’ve seen too many startups come and go), and I keep circling back to four traits that make businesses not just survive but thrive: a unique offer, recurring income, low fulfillment costs, and customers who bring in new customers. Let’s unpack how these traits relate to African businesses, what entrepreneurs can learn, and how they can grow—backed by some solid data.

1. A Unique Offer: Stand Out in a Crowded Market

In Africa, where competition is fierce—think of the thousands of vendors in Accra’s Makola Market or the flood of e-commerce platforms in South Africa—a unique offer is your golden ticket. It’s not just about selling something; it’s about solving a problem in a way no one else does. Take M-Pesa, Kenya’s mobile money pioneer. Launched in 2007, it didn’t just offer payments; it gave millions of unbanked people access to financial services. By 2023, Safaricom reported that M-Pesa had over 51 million active users across seven African countries, processing transactions worth $315 billion annually.

What African businesses can learn: Your product or service needs a clear edge. Maybe it’s tailoring to local needs—like Nigeria’s Farmcrowdy, which connects smallholder farmers with investors to boost agricultural output. Or it could be leveraging cultural nuances, like South Africa’s Yoco, which offers affordable card machines for small businesses in a cash-heavy economy. The key is to ask: What’s the one thing we do better than anyone else?

Growth tip: Research your market deeply. A 2022 McKinsey report found that African consumers are increasingly prioritizing value-driven products—60% of surveyed shoppers in Nigeria and Kenya said they’d switch brands for better quality or affordability. Find that niche and own it.

2. Recurring Income: Stability in Uncertain Times

Africa’s economies can be unpredictable—currency fluctuations, inflation, you name it. A business with recurring income, like subscriptions or memberships, is a lifeline. Look at Nigeria’s Paystack, a payment platform that charges businesses a small fee per transaction. By 2020, when Stripe acquired it for $200 million, Paystack was processing over 50% of Nigeria’s online payments. Recurring revenue from thousands of merchants gave it stability to scale.

Data point: According to the African Development Bank, only 20% of African businesses have predictable cash flow, compared to 45% in Southeast Asia. Recurring income models could close that gap.

What African businesses can learn: Build systems where customers pay regularly. Think of Uganda’s Tugende, which offers motorcycle financing with weekly repayments—steady income for them, life-changing assets for drivers. Or consider subscription-based services like South Africa’s Showmax, which keeps viewers hooked with affordable streaming plans. Even small businesses can adopt this—say, a Nairobi coffee shop offering a monthly subscription for daily brews.

Growth tip: Start small with loyalty programs or tiered pricing to test recurring models. And don’t sleep on mobile payments—Statista notes that 70% of Africans now use mobile money, making it easier to collect regular payments.

3. Low Fulfillment Costs: Keep More of What You Earn

High costs can eat your profits alive, especially in Africa where logistics can be a nightmare (ever tried shipping goods across borders?). Businesses with low fulfillment costs—think digital products or services with minimal overhead—have a massive advantage. Take Jumia, Africa’s e-commerce giant. While it faces logistics challenges, its move toward digital services like JumiaPay (a payment platform) cuts delivery costs. In 2022, Jumia reported a 30% increase in JumiaPay transactions, boosting margins.

What African businesses can learn: Focus on businesses where delivery is cheap or nonexistent. Edtech platforms like Nigeria’s uLesson, which delivers lessons via apps, avoid physical shipping entirely. Or consider Ghana’s mPharma, which streamlines drug distribution to pharmacies, reducing costs by negotiating bulk deals with suppliers. A 2023 Deloitte study found that African businesses with digital-first models had 25% higher profit margins than traditional ones.

Growth tip: Automate where possible. Use tech to cut manual processes—chatbots for customer service, cloud-based inventory systems, you get the idea. And if you’re in a physical business, partner with local logistics players to share costs.

4. Customers Get You New Customers: The Power of Word-of-Mouth

Africans trust recommendations. Whether it’s a neighbor raving about a new tailor or a WhatsApp group buzzing about a food delivery app, word-of-mouth is king. Businesses that turn customers into advocates grow faster. Take Kenya’s Twiga Foods, which connects farmers to vendors. By ensuring vendors get fresh produce reliably, Twiga built a network where vendors refer others. By 2021, Twiga was serving over 100,000 customers monthly, largely through referrals.

Data point: A 2021 Nielsen survey found that 85% of African consumers trust peer recommendations over traditional advertising, compared to a global average of 65%.

What African businesses can learn: Make your customers your marketers. Offer incentives—like discounts for referrals, as Nigeria’s PiggyVest does for its savings platform. Or create shareable experiences, like Ghana’s Afrochella festival, which thrives on social media buzz. Even small businesses can do this—a hair salon in Abidjan could offer a free service for every five referrals.

Growth tip: Build community. Engage customers on platforms like WhatsApp or Instagram, where Africans are hyper-active. Statista reports that 90% of internet users in Nigeria and Kenya use social media daily—perfect for sparking organic growth.

Final Thoughts: Building the Future

These four traits—a unique offer, recurring income, low fulfillment costs, and customer-driven growth—aren’t just buzzwords. They’re practical tools African entrepreneurs can use to navigate challenges and seize opportunities. The continent’s economic potential is massive: the African Continental Free Trade Area (AfCFTA) is projected to boost intra-African trade by $450 billion by 2035, per the World Bank. Businesses that embed these traits will be ready to ride that wave.

So, whether you’re running a tech startup in Kigali or a retail shop in Dakar, take a step back. Ask yourself: Does my business stand out? Can I make income more predictable? How can I cut costs? And are my customers spreading the word? Get these right, and you’re not just building a business—you’re shaping Africa’s future.