A Case for the "Anchor Entrepreneurship Model" for the Development of Africa: Branding African Designs, Made Textile, and Leather Products for Local and Export Markets (Maximising on the world's focus on Africa in 2010)

(Note:If you are short of time, just go to the  orld Impact section at the end  of the write up for a summary)

THE IDEA

The Anchor Entrepreneurship idea is based on a well tried and successful business model where big private companies especially in farming, contract   outlying small holder farmers in addition to their large or “nucleus” plantations to plant and supply their factories with produce as “out growers”. While the company helps in varying levels with cultivation, provision of inputs, credit facilities, harvesting, transport to factories, processing and marketing of the final produce, the farmer provides his land and sometimes labor and other inputs at varying levels according to an  agreement  and is paid for her/his produce and the private company makes a profit.

The  idea  of  Anchor Entrepreneurship   is  for   Foundations, NGOs and other Donors and Governments  identifying   individuals  that  have  viable business  ideas that will not only  help them make profits, but also  have direct, immediate and  positive impact  on  especially women, the rural  and urban poor who are trying   earn their living by engaging in small and micro businesses and smallholder farming  in the same line but are stuck in  a sort of rut. They are not making any meaningful progress because they lack what it takes.

The Anchor Entrepreneur will now in this case be like the locomotive engine to pull the others by virtue of her/his entrepreneurial acumen. He/She will be the nucleus or Anchor for this case and the others will be the out growers. She/He will do aggressive marketing and then produce some and subcontract the others, be on the look out for opportunities, ensure quality controls by hiring the staff to do some form of extension services to the others or link with other organizations that can provide volunteer technical staff, net work for new ideas and ways of improving production and processes, mobilize and help the out growers take advantage of facilities like group lending by banks and other lending institutions. Grow the business and in the process grow the out growers so that eventually the out growers can be incorporated as shareholders in the bigger company.

This idea will find application in all areas of development in Africa. Not just in farming alone, but manufacturing, mining and other productive economic activities and has the potential of radically transforming lives by reducing poverty by creating gainful employment opportunities.

MY CASE

Africa will between next June and July be hosting a major world event in South Africa. All the world focus will be on Africa. This provides a golden opportunity for marketing “Brand Africa” because of the many people who will be visiting the continent and the huge media focus on the continent.

Touch of Africa Designs is a sole proprietorship business registered in Kenya with the main objective of focusing on profit making and social change. It’s managed by Enos Arela Ambale as the Creative Director. The main areas of focus in terms of products are hand woven textile products (mats, shawls, scarf’s, decorating items etc), African themed designs of ladies and gents wear and leather products like bags, belts and shoes. I want to win the prize money for this competition so that I can be anchored in being the first Anchor Entrepreneur Case. With the money, I will buy modern sewing and embroidery machines, Screen printing machines, materials, and subcontract other producers. It will be

The Market is huge starting from the East African Community one of 120 million people (target and segment  6 % initially, COMESA (Common Market for Eastern and Southern Africa) more than 300 million (target and segment  1% initially), USA more than 300 million and Europe the same( target and segment 1% for each Markets).

Touch of Africa Designs ( TOA) already has a trade mark registered by the Kenya Industrial Property Institute for branding all its products for identity. It intents to use the trade mark for its designs and other designs made by small producers in the informal sector and small and medium enterprises under Touch of Africa’s anchorship. The ultimate aim is to make Touch of Africa the most well liked and known brand in/from Africa. There are plans to register the trade mark in other African countries, USA, Europe and Australia for protection.

Introduction of the Business Case

Anybody who has stayed in East Africa for the last more than tree years and is interested in trade and commerce must have heard of the Jua Kali/ Nguvu Kazi trade exhibitions. These are trade shows featuring products from informal sectors, small, micro and medium enterprises from the five member countries. They are usually held on a rotational basis in each of the member countries.

The Salient Features of the shows are as follows;

a)     As noted above they consist of mostly the informal small and micro-enterprises.

b)     Almost three quarters of the exhibit are textile and leather products, from African themed designs of apparels made in urban and rural centres to beaded leather ornaments, shoes, and bags produced by women from Kajiado and Machakos.

c)       80% of the leather and textile businesses that take part in the shows are owned by women.

d)     The products are mostly copies of others in the market

e)     The businesses face financial problems when they receive orders that do not pay upfront.

f)        There is inconsistency in product quality.

g)     Except for the shows and trade fares, there is very little done in terms of aggressive marketing.

Case  for intervention

As such the potential for the businesses to make money and generate wealth and employment and improve livelihoods is stifled. This therefore creates the need for ways of making the entrepreneurs realize their full potential by;

1        Offering consolidation without interfering with the individual independence of the entrepreneurs so that they can enjoy economies of scale. This is made difficult by the existing gross mistrust among the entrepreneurs making it very hard for them to work together for mutual benefit. Touch of Africa will leverage on its subcontracting relationship and order volumes among other advantages it has to maximize on the benefits of consolidation.

2        Differentiating the products by branding and adopting different design themes tailored towards different market segments and there by create more demand for the products. Touch of Africa Designs will systematically segment the markets and design products targeted at specific segments. For example the sizable expatriate communities in Africa will make a different segment from the tourists who come and go. 

3        Branding to create attachments, loyalty, and presence and take advantage of referrals and repeat purchases. This is true in a case where for example some of the traders are sponsored to attend exhibitions or functions outside the countries and continent and they sell everything and that is the end of everything or if there is any follow up, it is not thorough and does not result in more business. This is a gap that Touch of Africa will fill as the Anchor Business.

4        Ensuring consistency in quality by making sure there is quality control for stitch lengths finishing etc. This will be by a Touch of Africa quality controller as a form of extension services. Also some processes will be done  at Touch of Africa for quality control like embroidery and screen priting

5        Leveraging on networks to ensure availability of services like finance, training, insurance and others.

6        Being always on the lookout for emerging market trends and taking maximum advantage of opportunities as they come (the case of the World Cup). This is not something the individual traders can do but touch is better placed because of the training of the Creative Director. He has a bachelor of Commerce Degree from The University of Nairobi with a bias in Marketing and Business Administration and has partnerships with and access to resource people currently teaching at Universities in Kenya.

Location

The target businesses are spread allover the countries but with a higher concentration in Nairobi and surrounding areas, Dar as salaam, Kampala, Kigali and Bujumbura.

For a start and for ease of operations, the project will start with Nairobi and cover the rural Semi Arid Areas in Kajiado and Machakos that border Nairobi and are famed for producing leather and sisal products.  With increased demand, the project will role out in phases throughout the country  and region with emphasis on those entrepreneurs willing and able to learn produce quality products in time.

Timelines                                    

PHASE 1

SEPTEMBER  2009- MAY 2010

PHASE 2

JUNE 2010-JUNE 2014

PHASE  3

JUNE 2014- JUNE 2020

PHASE 4

JUNE 2020-

INITIALIZATION

1) Registration of  business name

2) Identification of potential entrepreneurs

3) Making of Sample designs

4) Giving sample  designs to some potential entrepreneurs for them to make sample products

5) Buying of Embroidery/Sewing Machines, And Screen Printing Machines.

6) Doing market research and sending samples to the target markets.

7) Mobilizing resources by looking for credit, partners, Loans from Saco’s, Banks, and entering competitions like this one.

8) Recruiting  staff, Accounts and machine operators

9) Identifying potential  partners for the project for networking purposes

10) Developing the brand  name for printing and embroidery on the products

11) Selling to local markets

12) Research in  EU and USA markets

13) Develop  project  Website

14) Initialize trade mark registration in EU and USA

15) Learning

GROWTH

1)     Aggressive marketing of products

2)     Recruit more Entrepreneurs according to needs. Must  have  presence in at least  two East African Community Countries  and have engaged at least  one hundred entrepreneurs

3)   Engage partners  for  capacity building in quality control, marketing etc according to the established needs

4)     Recruit  more staff, Expand capacities

5)     Learning

MATURITY

1)     Change of  Legal Status From  Sole Proprietorship to Limited  Liability company

2)     Start a Foundation to promote Anchor Entrepreneurship.

3)     Learning

LET   GO

1) Float Shares on East African Stock Exchanges, Locking in shares for Entrepreneurs.

2) Retire from active management and concentrate on Foundation Activities 

3) Learning

Partnerships

Touch of Africa would seek strong partnerships with the following

Kenya Government:         

• To benefit  from programs for  Youth and Women
  

TechnoServe

• To tap into its experience in empowering people in the developing world to build businesses and more specifically learn from it the lesson from its Young Women’s Entrepreneurship Training Program in Kenya.

• Ride on its affiliation with other organizations for example MYC4 for getting affordable financing mechanisms and other network benefits good for business growth.

The World Bank and the International Labour Organization (ILO)

•    Tap into their experience and programs for Small and   Medium Enterprises.

Banks and Micro Finance Institutions

• To tap into their products for financing operations for instance, some have group lending that benefit individual entrepreneurs.

Other   organizations interested in social change through business.

World Impact

The idea of   Anchor Entrenuership for Social Change has the Potential of revolutionizing development not only in developing countries or Africa for this matter, but allover the entire world. For its application is not limited by economic sectors, or level of development. It’s universal. People are not born with equal capabilities. But it’s always beneficial for all when the strength of the strong is used to help those who are trying but are stuck. Sometimes, life with its twists and turns has its own surprises. Its not uncommon to find the previously stuck being the strong.

The Locomotive Engine is only as useful as the number of wagons it’s pulling behind it. So before you sign off from this site, make your positive suggestions and please ENDORSE THIS IDEA. Hook the engine on the wagons, apply this idea or tell someone who can about it and let’s go impact the world.

Enos  A  Arela  has had the advantage of  working for and with small and medium size  enterprises  in Kenya  and knows some of the  strengths and challenges of  firms in these sectors, and their  and potential. I have the burning desire to help  small businesses grow.

Contacts

Enos A   Arela

P. O. Box 28201 00200,

Nairobi Kenya,

Telephone +254 722859248

Email: [email protected]

Alternative [email protected]