Diaspora Matters

How did Mereki rise to be an open air entertainment space of choice in Harare? Well back in the last 80s, the late former chairman of Dynamos, Mr Nhekairo used to host after match parties for Dembare supporters at the Warren Park D joint. Scores of fans warmed up the place helping to popularize it in the process. With time no after matches were held but the ground work had been completed as fans continued to trek to the place thereby boosting the brand. Later on the place became open to non soccer fans and as they say, the rest is history!

Many open air venues have been opened around the capital city but Mereki remains the first and last word when it comes to open air entertainment. The same model is captured in our 2020 and 2022 books when we featured how Mr Low launched a pub in Rimuka (2020 Business Opportunities for Zimbabweans Book) and How Tinashe did set up a thriving pub in Mufakose (2022 Business Opportunities for Zimbabweans Book).

Build a community around your brand by constantly engaging and supporting them. There is need for community ownership. Silently set up a business and mind your own business, then clients likely to take longer to switch to you especially when you offer what already exists from current players.

Dear reader,

Welcome to the same Nhekairo Concept being used in the digital space. You should not walk alone in business, rather; be an active participant in the digital community. And one of our leading members is Luwy Kay Kusemwa of LC Shipping and her company set up in 2018 has risen to become the best Runner in Zimbabwe which specializes in China Imports to Zimbabwe services.

Luwy is well networked, and has a big forum made up of clients. She is part and parcel of them and this also includes ZBIN. References become easier to get when you have thousands of clients speaking positively about your brand. Every time inquiries on Buying and Shipping from China crop up, be sure that her crew will bid for her.

Of course to reach her level takes quite a lot of effort and time, but the results are coming. So this is advanced digital marketing where simply operating as a lone ranger wont cut it. Digital Marketing now needs inclusion of digital communities.

The period July to October 2023 has literally been a dry period for the business sector as it was characterised by low disposable incomes as a result of a tight monetary policy regime. A lot of electioneering funding valves opened, but funds were not freely flowing to every economic sector. We have recently experienced an upsurge in criminality especially on our social media platforms and would therefore like to sensitize our members on possible risks from now till December 2023.

Bogus ZIMRA Audits: We have received reports of small business owners being phoned by bogus auditors and being asked to pay US$80 for audits. We urge you to contact ZIMRA directly for audits being carried out especially when asked to pay bribes. Most of the auditors are bogus—do not lose money.

Partnerships: Do not enter into new partnerships especially with strangers you would have met on social media. One famous scam on the forum is of a lady called Mai Tawana who misrepresented that she could buy fish from Kariba and sell to hotels such as Holiday Inn. She would produce fake financial reports and hoodwinking investors and one pastor lost more than US$45,000 to her. This is not the time to enter into partnerships with strangers.

Phishing Links: Do not lose valuable personal information through clicking malware links. Some of the links will come as sponsorships, scholarships or prizes. You will lose your accounts to social media including banking details.

Fake Proof Of Payments: Seemingly legit POPs will appear on your phone with scammers getting goods only for you to be shocked when the Money Transfer Agent says the POP is fake. Be wary of the timing as this scam is orchestrated before closing time when one has no time to confirm.

Counterfeit Farming Inputs: Avoid buying farming inputs such as fertilizer and seeds from the streets. Harare now has a massive and thriving industry of fake products manufacturing with a lot of warehouses dotted across Mbare.

Of course the list is obviously long and we will share more information in future.  Avoid the usual suspect—contracts in Victoria Falls—an old scam where victims are asked to send funds for bus fare and after doing so—the contractors witching off phones.

Farmers especially Poultry Farmers—avoid selling from your home as you could attract robbers. And try your level best to avoid congested areas in down town. The dollarization surge to also bring fake currency risks.

Hope you find this useful.

 The external environment impacts your business directly and even on a personal level. Strategic Management Practioners often use the PESTEL (Political, Economic, Social, Technological, Environmental and Legal) Model for external environment reviews. They consider changes in an environment and assess risks and opportunities.

We are fortunate to get a list of laws that will dominate the Parliament for the next 5 years and we encourage our members not to be mere passengers but to actively participate in public debates and also following the processes in the promulgation of laws that affect them.

What are the emerging opportunities you see? And what are the risks coming from these laws?

1- The Mines and Minerals Amendment Bill;

2- Public Finance Management Amendment Bill;

3- Medical Services Amendment Bill; Insurance Bill

4- Private Voluntary Organisation Bill,

5- Fredrick Clayton Trust Act (to be repealed)

6- Service of Documents Act(to be repealed)

7- Settled Estates Leasing Act(to be repealed)

8- War Marriages Validation Act(to be repealed)

9- Persons with Disabilities Bill

10- Administration of Estates Amendment Bill.

11- The Legal Practitioners (Amendment) Bill, 2023

12- Inheritance and Succession Laws (General Amendment) Bill, 2023,

13- Water Act (to be reviewed)

14- Zimbabwe National Water Authority Act (to be reviewed)

15- Plant Breeders Act(to be reviewed)

16- Climate Change Bill

17- The Parks and Wildlife Act (amendment)

18- Human Wildlife Conflict Relief Fund

19- Competition Amendment Bill;

20- Economic Empowerment Bill;

21- Standards Bill;

22- Sugar Production Amendment Bill 23-Technical Regulations Bill.

24-Electronic Transactions and Electronic Commerce Bill,

25- Postal and Telecommunications Amendment Bill

26- Zimbabwe Construction Contractors Council Bill

27- Housing Standards Control Act and the Housing and Buildings Act.

28- The Medical Aid Societies Regulatory Authority,

29- Health Professions Act;

30- Family Planning Council Act

31- Medicines and Allied Substances Control Act

32-National Health Insurance Bill

33- National Productivity Institute Bill; 34- Pensions Amendment Bill;

35- Occupational Safety and Health Amendment Bill

36- Human Resources Practitioners Bill

37- National Youth Bill,

38- The Small and Medium Enterprises Act (review)

39- Savings and Credit Cooperative Societies Bill

40- Broadcasting Services Amendment Bill

41- Zimbabwe Media Commission Act (Amendment)

42- Sport, Leisure and Recreation Bill

43- Sports Integrity Bill,

44- Lotteries and Gaming Act(alignment)

45-Veterans of the Liberation Struggle Act (amendment)

46- National Heroes Act (amendment)

47- Victims Compensation Act (amendment)

48- Radiation Protection Amendment Bill

49- The Biological Warfare Bill

50-Trafficking in Persons Act (amendment)

51- Immigration Act(amendment)

52-Citizenship of Zimbabwe Act(amendment)

53- National Archives of Zimbabwe Act(amendment);

54- Private Investigators and Security(amendment)

55- Guards (Control) Act(amendment)

56- Official Secrets Act(amendment)

58- Unlawful Organisations Act(amendment)

59- Censorship and Entertainments Control Act (amendment)

60- Births and Deaths Registration Act(amendment).

It was supposed to be a simple exchange of ideas between an Ok Zimbabwe representative  and the Permanent Secretary of the Ministry of Finance and Investment Promotion. Appeal for regulation of the informal sector in order to protect formal businesses. This has been the norm over the past years with the corporate sector using its muscle of taxes contributions to the economy and successfully lobbying for state apparatus to curb competition from the informal sector on their behalf.

However everyone was taken aback by the curt response ‘If I were part of the Ok Zimbabwe Board, I would fire you’ Mr  Guvamatanga thundered! He went on to highlight South African case studies of retail behemoths such as Checkers, Pick N Pay and others who have mastered the art of symbiotic partnerships with spazas or tuckshops and unlocking value.

In simple terms, Guvamatanga said ‘Innovate or Die—no state protection coming’

Welcome dear reader to the state of business in Zimbabwe where the informal sector is now dominating and causing serious headaches to long established businesses. With the economy estimated to be at 60% Informal, the figures are not static as the informal economy is relentless in its push for dominance.

A healthy co-existence between formal businesses and informal sector would be preferable like in South Africa as quoted by Guvamatanga. However in Zimbabwe it’s becoming a serious war with much of the formal businesses income being chipped away by unregistered businesses.

An economy in motion and catching many corporate boards by surprise and in sixes and sevens not knowing how to respond!

B2E to OK Zimbabwe Rescue

On these pages, we have extensively covered a business model called B2E or Business 2 Entrepreneur. It is not found anywhere else especially business books. Any search on the internet would produce results of Business 2 Employee and not Business 2 Entrepreneur.

The B2E takes into consideration the current challenges in the economy of record high unemployment and dwindling disposable incomes. This has made practically everyone a hustler—and hustling is the number 1 economic activity in the country ahead of everything else.

OK Zimbabwe has been mostly using the Business 2 Consumer Model (B2C) and this has produced excellent results in the past. However going forward they need to incorporate Business 2 Entrepreneur Business Models in order to survive.

B2E Case studies

Varun Beverages the local manufacturer of PEPSI drinks started operating in Zimbabwe in 2018 and has been giving Delta sleepless nights. How did Varun Beverages achieve a significant share of the market in such a short space of time? They focused on B2E through working with vendors—those who are looking at making money. B2E is about making others make money with the largest contingent, the informal sector.

Varun took vendors as key partners and quickly penetrated the market. Meanwhile Delta is now responding to the threats posed by the new entrant but they are unlikely to recover.

The established master of B2E is Innscor which has been working with small tuckshops for ages. Innscor through Bakers Inn delivers bread on credit to tuckshops and then collect their dues after a few hours. Tuckshop owners want to make money but have no access to capital. Therefore Innscor provides a few hours access to credit and then collect dues.

This has seen the company penetrating informal settlements such as Retreat,Eastview, Hopely, Goromonzi, Epworth, Seke and Domboshava. They have gone mobile in search of income.

Of course this is not to say the OK Zimbabwe is sleeping on the wheel as they have the OK Grand Challenge which is essentially a B2E Concept—making others make money. However this is a once off annual event and may not be enough. They also ventured into money transfers through partnerships with Mukuru, ZINARA, ZBC etc. However this is still not enough as they need to look at what Innscor and Varun Beverages are doing.

For Innscor, the proliferation of tuckshops is a good omen as it creates room for expansion!

And dear reader once more, we are not talking of theory here as in 2020 we established a crowdfunding called Nutricio which manufactured mealie meal. We were turned away by leading retail giants but turned to tuckshops using the Innscor B2E model. Results were instant as we provided goods on credit and collecting our monies later. How are procurement practices of leading retailers structured? Are they small business friendly? Or contributing to the demise of their own companies?

In conclusion, Zimbabwe’s Economic environment is in motion with B2E dominating. There is need for experts to take time and go onto the ground and thoroughly study street dynamics and adjust accordingly. And yes there is need for regulation and formalization of tuckshops. Smuggling especially through Binga needs to be curbed. Policy consistency important as this is the elephant in the room.

Most of the emerging opportunities in the world are related to tech. It is therefore critically important to analyse future tech change introductions and be in the right position at the right time! The last big opportunity to make huge impact in Zimbabwe was the short-lived Kwese TV. Massive uptake by Zimbabweans in 2017 and its unfortunate the pay per view television did not last the distance.

Its been 7 years before Zimbabweans got really tech excited and the good news is here good people. The former Minister of ICT, Jenfan Muswere recently confirmed that Starlink had lodged an application to operate in Zimbabwe and that it was under consideration!

There is measured hope that the Elon Musk owned satellite internet provider will get approval by end of year or during the first quarter of next year. After all, our neighbouring countries such as Zambia and Mozambique already have access and Zimbabweans had to be warned by Potraz against illegal access. So huge buzz going around.

In a country with internet access challenges, the news of Starlink could be the best tech news in recent years and locals are waiting to tap into associated opportunities.

What could be the opportunities?

We may need to refer back to the introduction of mobile telecommunication in the country at the turn of the century. Agents distribution opportunities in urban and rural areas. There is no way Starlink will be able to meet demand by working alone-they will need local support through partners. How do you become an agent? What are the requirements? The responsibility is upon you to figure out.

Market Access: Typical of new techs, the introduction phase will see premium priced products but over time the prices will stabilise as witnessed across Europe where the price of the decoders has dropped from US$450 to $100. Therefore the early birds to reap huge rewards but it will only be for the short to medium run. Starlink modems will become hot property and imported from neighbouring countries.

The first uptake likely to be on a B2B Model with big and small businesses jumping in-this also includes NGOs, rural district councils and schools. The next big market will be hire to buy credit facilities especially for civil servants and other big corporate employees. The third one will be individuals. Strategically position yourself considering the above. The bonus is factoring in the presence of diasporas as active buying decision makers!

On a flip side, we could witness counterfeit decoders, fake crowdfunding initiatives or even outright Ponzi schemes. Of course there is more you can add and the last tip is for you to visit Zambia and study how Starlink launched and then develop a comprehensive business plan.

Do not wait for the signal of approval of the licence-be proactive and ready to launch your marketing campaigns the next hour after approval.

Hoping you find this useful.

Few Zimbabweans are going for the professional business qualification of the Chartered Institute of Management of Accountants (CIMA). And this has led to less than 5 graduating each year leaving the Zimbabwe CIMA office to relocate to Zambia where enrolment is better.

One of the interesting concept from Management Accounting is the Learning Curve which is also called the Experience Curve concept. It is defined as ‘the rate of a person’s progress in gaining experience or new skills’ and expressed as a mathematical formula Y = a X b , (also seen as Y = aX^b).

Given that CIMA studies are based on practical scenarios, the learning curve questions can be challenging especially when variance analysis and other complex concepts are added.

What students could miss out though is the application of the concept on start-ups. How easy is it to start a business operation in Zimbabwe? At what stage do you start to turn red losses figures into profits?

Let’s draw lessons from top musician Baba Harare.

On his latest post, Baba Harare mentions the first days when he left fellow musician Jah Prayzer and flying solo. One of his first musical shows was in Centenary in Mashonaland Central and he hitched a hike from a long distance driver to the venue and what did he meet?

Shock as a total of 10 musical fans turned up and this was a mega flop for a musician who had become one of the fans favourite guitarist at Third Generation Band and used to performing in front of thousands of ecstatic fans.

However he persevered and went on to build one of the top musical brands in the country.

The learning curve essentially captures inevitable embarrassing moments in the first days. It captures the losses many are not comfortable to publicly share.

Given that 1 out of 5 start-ups remain on feet beyond 5 years, the learning curve costs could be argued to be 80%. High probability of losing plus or minus 80% of capital invested in the first days or years. A key lesson for risk managers and financial analysts.

However through thorough researches and mentorships—you could reduce the costs. If you ask around for business ideas—you are unlikely to be given learning curve costs. Everyone comfortable with sharing the successes but how they reached the stage? The missing link!

In other words Profits=Experience.

Of course the purpose of this article is not to scare you—but just a reality check. The ending of this article of course an inspiration from Baba Harare. From the big flop of 10 fans to thousands of fans attending shows years later.

Keep on grinding.

The success rate of entrepreneurs is 20% over a period of 5 years! Yes only 1 out of 5 succeeds with the majority falling by the wayside. A staggering failure rate and we rarely highlight this fact so as not to scare potential entrants.

And the code is not too difficult to decode—it’s the Learning/Experience Curve Effect. You need experience of investing own funds and gaining hard knock life lessons before you become a Pro.

Unlike in exams where you can calculate Learning Curve Formulas without feeling the actual pain—In business it’s your own hard earned cash that is used for experimental purposes. The investor hopes for the best of returns but results often at complete varience with planned profits.

Here are 2 case studies of ex drivers for an International NGO who each got $40,000 as pensions in 2013. They researched on tobacco opportunities including investing in field day tours. They used funds to procure inputs and followed due processes like other tobacco farmers but met the learning curve formula when a hail storm passed through Macheke. For the little that survived, they were served with Paper 2 with market prices not in their favour.

In one season pensions wiped out!

These were drivers used to long country trips on food assessment visits earning them thousands of dollars every month. The first mistake they made was to INVEST BIG and quickly amounts equivalent to what they used to earn from employment. The rush to quickly skip the learning curve and earn monies often the disaster trap.

Why many fall into the trap—Just like they say in Economics that prices are sticky downwards—Downgrading life styles is a sticky process. This is a very difficult and painful process few are well prepared for. A very costly experience which guides investment decisions.

From earning $4000 a month to join the streets and starting from the bottom and invest in a $1000 business and be patient to let it grow is akin to a jail sentence. But on the streets you have to go through baby steps till you are able to walk and run.

The 30 day monthly salary comfort is removed when you join the informal sector. And you need not carry your formal employment titles such as Professor, Actuarial Scientist, Project Manager, Senior Banker, Accountant, CEO etc

Our advice is take your time in analysing informal sector trends. Get enough case studies in addition to a lot of researches. Take the plunge and be realistic on your targets. It is so easy to lose it all in a blink of an eye. Engage professionals for advice and preferably those who have been on the ground for years.

Zimbabwe has one of the biggest informal sectors on earth and the sector keeps expanding with college graduates, those retrenched and even those formally employed joining the sector mainly for survival purposes.

And for long the sector used to be shunned by big companies as its regarded as filthy, uncouth and a tax evading business sector. For long Economists and policy makers regarded the sector as a sore thump that needed to be destroyed and replaced by formalized businesses.

However faced with economic headwinds over the past months, corporate strategists are taking an interest in the sector and competing with some of the players in the sector especially in the area of groceries. With dwindling disposable incomes in the country, many retail shops are tweaking their business models in a sink or swim reality.

The informal sector has been a preserve for foreigners such as The Congolese and Nigerians especially in downtown but local manufacturers such as Simbisa brands are deep penetrating into the informal sector in search of the scarce greenback.

Of course Simbisa is not new to the informal sector as its Bakers Inn took over bread delivery to tuckshops and even extending to peri-urban areas.

So what has changed in 2023?

Irvines Chickens recently opened a container in Kuwadzana Extension in Harare and has been seen in other areas in the Western Suburbs. Question is who are they targeting? Who are their customers? Well the answer lies in a concept we made popular on the forum—B2E , Business 2 Entrepreneur or in short Make Others Make Money.

Their target market is mainly those interested in making money through selling to others—a model that pushes volumes. And its not only Simbisa hunting for the dollar as other manufacturers are venturing Westwards and in some instances bypassing the usual route of retail behemoths and wholesalers.

Drive trucks and park them in high density for fast cash. Of course this comes with added risks of cash robbery, but high risk—high returns. Well done to Simbisa but increasing competition and crowding out small businesses?

Whatever the verdict you can arrive at—what is apparent is the informal sector could well turn out to be the area of last resort for the corporate sector. Collect cash through Innbucks and essentially become an informal sector bank and then push for more.

It’s the year of trucks being redirected and heading to the ghetto for survival.

The trending news in the country is the collapse of E-Creator, a ponzi scheme that has been running for the past 3 months. To some the collapse came as a surprise but to followers of the forum—the ponzi collapsed as expected. The scheme collapsed with an estimated US$2 million of investor funds and adds to the growing list of ponzi schemes landing on our shores and leaving a trail of destruction.

How did the latest scheme hoodwink victims?

It was neatly packaged as an empowerment program and in a country with high unemployment, take up was automatic. The scheme had collapsed in April 2023 in Nigeria after running for a few months and this helps explain why analysts had predicted end of June 2023 as the burial day of the ponzi.

The ponzi had strong backing unlike the previous ones and included the public media giving ample space to the scammers. In a country where public media still enjoys considerable confidence—some were regrettably ensnared by the adverts.

Endorsements from public figures such as Madam Boss added trust weights and It remains to be seen whether there is going to be a public apology from institutions that supported the ponzi.  

Despite warnings, and even a couple of articles on the forum including a shorthand book on awareness-Zimbabweans still forged ahead and invested funds in the hope of fast returns. It’s now all tears as some had invested huge sums of funds with reality now settling in that indeed they had trusted scammers with hard earned dollars.

From MMM, Beven Capital, and now E-Creator—the list keeps extending and it’s a matter of time before another ponzi scheme emerges.

Therefore the question is have Zimbabweans learnt the hard way? Is this the end of ponzi schemes in the country? We don’t think so—there is a huge market for ponzi schemes. Economic conditions will push for the speedy introduction of another ponzi scheme and the next could come as early as November targeting the festive season.

Most of the ponzi schemes are imports—copy and pasted from West Africa or from South Africa. Only a few such as Beven Capital was structured from Zimbabwe.

Just how ponzi masters manage to register companies, open offices, advertise on National TV and Newspapers and then disappear without trace is mind boggling.

Back in 2015 we realised that there were few effective small businesses forums in Zimbabwe and therefore formed this forum with the intention of helping entrepreneurs to access opportunities information as well as linking them up for markets and capital access.

We adopted a Japanese concept called Mirasapo which essentially means the support of future needs of entrepreneurs. Mirasapo is a digital ecosystem which links entrepreneurs across Japan and has a lot of paid experts who are a phone call away for the millions of entrepreneurs in Japan.

Our challenge was on the business model to support entrepreneurs. Classroom support? This would mean support to a few hundreds in a country with more than 5 million entrepreneurs. This is why we opted for the Mirasapo model and it involved the following;

Opening a Facebook Forum and sharing business information as well as helping entrepreneurs to network.

Opening various Whatsapp Forums where members helped to network and using the platform for markets access and resources access.

We linked the Facebook and Whatsapp forums to this website allowing for free flow of information. From Facebook to Whatsapp and vice versa. The website to Whatsapp and Facebook and vice versa. The end result is an active community of entrepreneurs which has reached 150,000 with 81,000 being active on Facebook and 15,000 active on Whatsapp.

The extra benefit of the active members is that most of them are well connected especially on Whatsapp with some attending events such as forum meetings.

Our model has therefore been a success although there is more work required in quality networking.

Some of our forum events in pictures over the past 3 years. There are more on our gallery.