I remember this inspirational write up by one of the leading business personalities in Africa. He said if you see a wagon, then it is already too late to invest-in short the field is flooded! When everyone is talking or joining a field or sector then it is no longer profitable.
We are notorious for copying business ideas from each other, if you see your neighbour investing in kombis then you may want to invest too, see your friend doing well in poultry and then ‘sweat the technique’ like what the famous American Rap Music duo of Eric B and Rakim used to sing in the early 90s-sweating the technique is street lingo for copying!
So how does one invest in an over crowed industry and still make profits? The answer is simple-in real estate when they run out of ground space, they go upwards. In business one can use the same technique of going up.
To help illustrate this point lets assume you would like to invest in the baking industry-baking cakes and samoosas for sale. This field is over flooded with almost every street having someone who is baking for business. We will break the baking business into categories that go up.
Category One
Category One is characterised by first time entrants to a field. Huge profits await those who join first and the rest quickly join and drive profits down. When people say ‘sector iyi haina mari’ they are in most cases referring to this category. Think of the kombis, poultry and vending.
Category Two
Still assessing the baking of cakes industry, this is a category higher than the first one and includes teaching others how to bake. You need special skill and have to create this category especially when everyone starts rushing in. They say opportunities in Zimbabwe last for 3 months before profits are driven down. So teaching others to make money helps you to stay for a while in the game.
Category Three
Category three is a notch higher than the previous one and one is now looking at the supply side. Supplying baking equipment to those in the baking industry. You will be dealing with both category one and category two. You have noticed that there are a lot of first timers to the industry and they all need equipment-in you come and supply it!
Category Four
Category four may involve you forming an association of Baking Professionals linking up with all those who are doing baking-doing advocacy and capacity building, forming chapters across the country and linking them with regional forums.
What do we learn from this?
Most people (99%) will tell you that baking is over flooded and discourage you. The reason they do this is because their level of thinking will be on category one! If you look at any sector and analyse category one then you are likely to see very little profit margins. Industry zveshuwawo inenge isina chiro….munhu wese achingoita!
However a closer analysis and study will show that if you go up, you may find unlimited opportunities. Someone may say the kombi business is over subscribed with more than 10,000 kombis in Harare alone but tell that to the Nigerian brother running a car parts shop along Kaguvi and he will differ with you. He will say ‘Oga, Kombi business is good…not only good but very good’
So when entering any field think of the categories to enter at, one the flooded one or second level which may be less flooded. Kana munhu achiti hazvina mari izvi mafungiro ake anogona kunge ari pa category one, open up their minds and use the example above.
I even laugh with friends when i say one day the diaspora will come back and grab all opportunities that exist in Zimbabwe. How will they do it? Simple they will start from category 3 and 4 of each sector and make huge profits.
