Wednesday, 6 July 2011

The growing importance of UK Ghanaian business people by Eric Osei (2008)

What do the following people have in common? : Adam Afriyie, Oswald Boateng, Elsie Owusu, Bernard Ampaw and Kofi Kusitor have in common? They are all prominent and successful Ghana-born or Ghanaian descent business people who are making a significant impact in the British business world.


Businesses owned by Ghana- born or British Ghanaian entrepreneurs are becoming an important part of the UK business sector, particularly in London. Ghanaians /British Ghanains-owned businesses make up a part of the 16,000 Black-owned businesses London – and contribute to the £10 billion sales turnover generated by the Capital’s African and Caribbean owned businesses.

Ghanains, especially British Ghanains are now running successfully companies in mainstream sectors such as financial services, law, business and professional services, computing and ICT, media, fashion, retail, property services, event management, publishing, consulting and recruitment.

With the right knowledge of where to go to get quality business support and advice, even more Ghanaians/British Ghanaians would be running successful businesses in the UK.

Some of the UK prominent Ghanaian/British Ghanaian business people are: Adam Afriyie - multi-millionaire British-born businessman, non executive Chairman of Adfero Ltd (an information service company), and conservative MP for Windsor. He was founder of Connect Service- an IT service company pioneering fixed-price support. He is reputed to be worth £40 million. Oswald Boateng - a menswear designer widely credited with introducing Savile Row tailoring to a new generation. The British-born Ghanaians also designs clothes for a celebrity clientele, including Mick Jagger, Will Smith, Jamie Foxx and Lawrence Fishbone. Elsie Owusu- founder and principal of a successful London-based Architect practice. Her firm has won many major commissions including housing developments across the UK, design strategy for the UK Supreme Court and a range of developments in Ghana and Nigeria Emelia Bartels- director of Excel Consulting, a successful marketing and event management company. Emelia is the founder of prestigious Ghana Professional Achievement (GPA) awards which showcase successful Ghanaian professionals and businesses in the UK. Frances Williams – Founder and CEO of Interims for Developments, a company which specialises in recruiting African professionals to take up post in the continent. Sam Gyimah - founder and CEO of Clearstone, one of the fastest growing HGV (Heavy Goods Vehicle) recruitment company in Britain. The company currently employs over 30 people. Ed Yeboah -founder and CEO of Proactive Capital, a financial service company based in the City of London, UK’s most prestigious business and financial district Bernard Apaw – The Ghanaian- born businessman is the founder and CEO of OBE TV- a 24 hour satellite TV Channel targeted mainly at Ghanains and other African communities. It current has an audience of 8 million Kofi Kusitor - Founder of the UK talk radio station, Colourful radio and the internationally renowned Black Enterprise awards.

Part of the reason for the increasing number of people of Ghanaian backgrounds owning and running successful firms lies in the significant generational changes which has occurred within the Ghanaian community in the past 40 years. Most of the second and third generation Ghanains are either British born or came to the UK as youngsters. Their British experience, coupled with the greater economic opportunities now available to them, compared to say when their parents came in the 60s and 70s, has resulted in a major shift in mindsets and ambitions.

These new breed entrepreneurs possess higher levels of education and communication skills as well as a range of business and social networks, all of which affect their entrepreneurial behavior and business decisions. Furthermore, they tend to establish their businesses in mainstream sectors because of the larger market size and greater business opportunities that exist in these sectors.

Despite the growing number of business people of Ghanaian descent running successful firms in mainstream sectors, a large proportion of Ghanaian-owned businesses are still concentrated in the ethnic niche and traditional business sectors. A visit to parts of London with large Ghanaian populations such as Tottenham, Peckham and East London reveal numbers (often of older generations or new arrivals), running businesses in niche these sectors predominantly catering for the Ghanaian, other African and Caribbean communities. Popular Ghanaian ethnic businesses include, food grocery stores, restaurant, clothing retail, beauty and hairdressing, freight & travel and import and export

An interesting development over the past few years is the number of Ghanaian-owned money transfer/remittance businesses springing up in London areas where there is high Ghanaian population. The businesses are capitalizing on the huge and growing money transfer market, particularly that sector made up of Ghanaians in the UK “sending money home”. It is estimated that between 2001 and 2006, the 2 million Ghanains abroad sent home around £4billion. Although these Ghanaian owned money transfer operators do not have the market share or advertising budgets of banks and multi-national companies like Western Union and MoneyGram, they compete by charging much lower rates for remittance services. In many cases, these operators have other competitive advantages such as a local knowledge of the market and the provision of convenient services, such as longer opening hours.

While most of these businesses provide self employment for the owners and create employment for the staff, research evidence suggests that, despite the continuing demand from their existing customers, the majority of these ethnic niche sectors are over saturated and have low profit margin and limited capacity for growth. This is due to often small community customer base; lower earnings and hence lower purchasing power of a large proportion of the customer base. Also there is intense competition from other African, Asian and Caribbean owned businesses operating in the same market.

Although some of the ethnic niche businesses serving the Ghanaian community can be successful and profitable, research evidence suggest that those businesses operating in mainstream and growth sectors are most likely to achieve the greatest growth, because of the opportunities that exist in these sectors. Naturally, not all businesses want to grow, nor have the potential to grow. Some business owners are content with making just enough to get by. However for those UK Ghanaian business owners that want to expand and achieve the rewards associated with growth businesses such as a minimum annual turnover of £100,000, increased profits and creation of new jobs, there are a number of things they can do. Firstly to lay the right foundation for expansion, the business should have been ideally established for least 3 years; operating in a mainstream sector or successfully exploiting a gap in the ethnic niche market; and providing a unique service or product. Then the business owner should take the following practical steps and actions: (i) Produce a “Growth Plan”. The growth plan helps the business to plan for expansion. It has a number of purposes including helping identify new business opportunities and anticipate potential problems; directing the business to where it wants to get to; raising new finance; and helping the business compete in the market place. The growth plan is flexible and should be reviewed on a regular basis. (ii) Increasing Sales & Winning Contracts: Every business needs to increase its sales or win new contracts if it is to survive or grow. Although this depends on the business sector, there are a number things that can be done to increase the chances of making more sales and winning more contract. Having a “sales plan” and adopting the most cost effective marketing and promotion campaign to reach the target customers is critical. A small budget set aside for marketing activities such as adverts in local newspapers, trade or professional magazines, and on the internet is encouraged as this could lead to new sales. Word of mouth, attractive shop displays, promotional leaflets, sales promotions and presentations to potential clients can also lead to new sales or new contracts. Attending business networking and trade events are also important channels for meeting potential customers and securing new leads, sales or contracts. In addition, capitalising on social and business networks and contacts are important methods of increasing sales and winning contracts. Bidding or tendering for contracts from the public sector presents another major business opportunity for small firms. The UK public sector spends over £100 billion a year on a range of services ranging from consultancy, training, marketing, care services and accommodation to catering and cleaning. Most public sector organisations, especially local authorities, hospitals and government departments advertise their contracts on their website, ethnic newspapers and in relevant trade magazines. With the London 2012 Olympics approaching, there are major opportunities for businesses to win contracts to deliver a range of services. Interested businesses should visit the websites of the Olympic Development Agency (ODA) and the London Development Agency (LDA). Also, a number of large private sector companies such as BT are providing contract opportunities for small businesses. (iii) Retaining and expanding your Customer Base. Retaining customers or clients should be at the centre of every business growth strategy. There have been so many cases where small businesses have worked hard to win a contract to supply to a major corporate client or public body, only to loose the contract a few months later because of failure to maintain quality or to meet production or delivery deadlines. Once a small business wins a contract from any client, especially if it’s a large organisation, it must do everything in its power to deliver the contract to the best standard in order that they get repeat business. Depending on the type of business, a number of simple measures can be adopted to retain customers. These include regular courtesy calls, mail outs, offering discounts and incentives and loyalty schemes etc. (iv) Finance to grow your business. Very few business owners can finance the growth of their businesses through their own internal resources or profits. There are a private and public sector organisations providing money for businesses to finance their growth: Banks and other private sector financial institutions. Subject to a robust business plan, good credit rating and necessary collateral, most major UK banks, building societies and finance companies would lend qualifying business owners money to expand their business. Some of the banks and other private finance available to businesses include: debt finance (normally bank loans borrowed for short to medium term ); working capital finance ( money borrowed and used to bridge short-term sales revenue gaps or cash flow problems); equity finance ( involving the sale of shares in the business to raise money to finance business development and expansion); Equity investors (involving venture capitalists and business angels investing and taking a stake in the business. Public sector finance for business growth. A number of Government and other public agency funds ranging from low interest loan and grants are available to qualifying businesses. In London, the LDA is overall responsible for these programmes, but it contracts with a number of business support organisations (such as GLE, East London Small Business Centre etc) to deliver on its behalf. Some of LDA’s finance programmes includes: Access to finance; LDA Loan fund; Grants for capital equipment and buildings; Business angels; and venture capitalist programmes.

(v) Obtaining quality business support and advice. Very few business owners can successfully manage growth without external help. It is therefore critical that businesses seeking to grow get relevant professional help, particularly in areas such as sales, marketing, financial management and growth planning. There are number of good business consultants, trade bodies (such as Institute of Chartered Accountants, Federation of Small Businesses), as well as public agencies such as the London Development Agency, Business Link, GLE, HBDA, ELSBC and local enterprise support agencies, which can provide the necessary advice and support.

(vi) Other activities and actions necessary for growth. Other key actions for growing businesses include: regular review of the performance of the product or service and if necessary developing and launching new ones; ensuring staff and management are trained; keeping abreast of new legislations which could affect the business and market; remaining competitive and keeping an eye on competitors; adopting formal management structures and processes; implementing long term planning for all businesses activities and exploiting technology and new innovations.

Eric Osei The author is a Senior Business Development Manager at the London Development Agency- the business, investment and economic development agency for London. He has received national and international awards for his work on business and economic development


Credit: http://www.ghanaweb.com/GhanaHomePage/diaspora/artikel.php?ID=141204
 

2 comments:

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