How to start a Business in Ghana
Anyone who has ambitions to start a business in Ghana should understand that there are no limits on who can become a good businessman. One does not necessarily need a lot of credentials, loads of money in the account, or even a lot of business experience to come up with a concept that could easily become the next major business.
However, one must have a solid business plan and a passion for seeing it through. An individual who is truly committed and wants to know how to start a business in Ghana should advisably, go through the following steps.
Conduct a thorough self-assessment for your future business
To start with, it is important to do some self probing and understand the reason there is a hunger to start the business.
This question should give the potential businessman a proper guide on the most appropriate business to start.
In the event one just wants extra money, maybe he/she should start a side hustle, but if the vision, mission, and plan go in tandem for a long term successful business, then there is a need to give the full-time business commitment.
Once a tangible reason to go full throttle when figuring out how to start a business in Ghana is found, the next thing is to figure out the exact type of business. At this stage as a businessman, I would ask myself the following questions.
Answer these questions first
- Do I have what it takes to run the business?
- Does my passion lie in the business idea?
- Is this my area of experience?
- How much can I afford to lose with the knowledge that most business ideas typically flop?
- How much capital do I need? Can I raise it?
- What sort of lifestyle do I intend to live in?
- Am I ready to be a full-time businessman?
I will be brutally honest with my answers since after I am done, I will get a solid foundation for every step I will be doing in the future concerning the business.
Think of a good business idea
At this stage, I would ask myself, do I have a phenomenal business idea?
If I feel like my current idea is not unique enough to last a long period, I will look for ways to start brainstorming.
I would try the following;
- Ask me what technology or invention is coming next and also how it will change the people of Ghana.
- Look for a problem to a solution that already bothers me and turn it into a business idea.
- Apply my skills to venture into a new field.
- Try creating new, faster, and cheaper solutions to an already existing solid business idea.
At this juncture, my quest on how to start a business in Ghana would involve meeting new people and asking them questions, seeking advice from them, researching from other businessmen, and seeking information from other reliable sources.
Do proper market research
Is there anyone else doing what I intend to start doing? If no one is, there must be a good reason. I would start researching potential partners and rivals. The most appropriate research method at this juncture would be face to face and telephone communication.
Questionnaires and surveys would also come in very handy since I would approach potential customers and gather feedback along the lines of how well the service or good can be offered.
I would also seek to know what improvements they would suggest in comparison to already existing products or services. Having done that adequately, I would have inched closer to getting to my ultimate goal in my quest on how to start a business in Ghana.
Look for credible feedback
Once I have decided on a particular service or good to sell, I would let people have proper interaction with it to receive positive criticism.
In usual cases, the first people to get into proper contact with a product end up becoming its brand ambassadors, especially when they like the product and when their input is given proper consideration.
I have learned that the best way to receive feedback is making full use of prototypes, by pivoting as well as by experimenting. When I push the product, I get proper feedback and use it adequately before I release and start pushing the next product.
This way, I will be in a position to constantly improve and hence remain relevant. When I seek for advice, I have also researched and learned that I should be in a position to;
- Take time to digest, react, and consider the feedback I have heard.
- Have kind words even to those who do not give positive feedback.
- Look into every detail or criticism offered, no matter how small it is.
- Work out on the criticism pattern. If I keep hearing the same thing time and again, then it will be worth taking notice and acting on the feedback.
- Listen with a lot of curiosity and engage the customer but let them remain in control.
- Ask questions.
Legal aspects of the business in Ghana
Once I am done with all the steps above, the next and most important thing is to get all the legal aspects of the business right.
By doing that, I am not worried about someone else taking over the business of suing me for something I never saw coming.
In my research on how to do business in Ghana, I have figured out that every business must meet the following requirements.
Register the business at the Registrar General’s Department
As per Ghanaian laws, every business is expected to fill out the registrar’s forms, which also serve as the company’s regulations.
It is also imperative that all companies have an auditor who must also be a member of the Institute of Chartered Accountants.
The auditor is supposed to be non-partisan and not serving the company in any other capacity. Once all the forms are filled satisfactorily, the next step involves paying the fees and being issued with a Certificate of Incorporation, which is then followed by a Certificate of Commencement.
Evaluate the cost of labor
In Ghana, the Labor Act 651 of 2003 (opens in a new tab) is responsible for regulating all labor and employment issues in the country. The Act has solid consolidation of all laws related to employers, labor, industrial relations, and trade unions.
When researching how to start a business in Ghana, I would also be keen on the value of labor.
Within the Labor Act, there is a very good articulation of payment and wages that every employer is supposed to adhere to. The wages and salaries are supposed to be paid in a legal tender every week to the unemployed worker and monthly to the employed worker.
Companies operating in Ghana are supposed to pay various taxes, which are dependent on the sector the company operates in. Profits are taxable only in instances where they are declared in audited accounts.
Furthermore, income tax incentives are given under the Income Tax Act 2015 (Act 896) (opens in a new tab) in place of the Internal Revenue Act, 2000 (Act 5920).
For resident individuals, the taxes applicable are as outlined below;
- Corporate Tax: Companies pay this on their yearly profits at a rate of 25%.
- Personal Income Tax: This is tax paid by self-employed individuals at four different graduated rates.
- Pay As You Earn: PAYE contributions are, in most cases, withholdings from employees’ salaries to be in a position to satisfy their income tax responsibilities.
When researching how to start a business in Ghana, I found out that the country is well endowed when it comes to energy, water, and telecommunications. The rates are favorable for any kind of startup.
Necessary bank account
For a business to run efficiently, it must have a functional bank account.
Fortunately for potential Ghanaian businessmen, the country has many different banks that have very well-structured bank accounts for different types of businesses.
Patents, Trademarks, and Copyrights
As with any other country in the world, Ghana expects businessmen to register the above mentioned for all unique products and services.
This comes in very handy when matters related to avoiding future business conflicts and disputes with competitors are concerned.
Make a solid business plan
Once I have meticulously gone through all the processes mentioned above, the next thing would be to outline my intentions in a business plan.
In simple terms, a business plan is a written description of how a business is supposed to evolve when it starts up to when it becomes a big brand.
A business plan is supposed to have;
- A title page: This is where I outline the name of the business. When making the business name choice, one must make the most enticing and one that easily relates to the business.
- An executive summary: In this section, all the nitty-gritty details about the business are well explained. This includes the company description, the main problem the business intends to solve as well as how it intends to.
- The business description: This is where as a businessman, I explain the kind of business I intend to start, how the industry currently looks like and also how I project it to look into the future.
- Market strategy: In this part, I will explain the target market and how well I intend to conquer the market.
- The competitive analysis: This is where I am supposed to explain the weaknesses and strengths of my competitors and also how I intend to beat them.
- The design and development plan: Here, I will explain the service or product and how it will be developed and, while at it, provide a budget for the same.
- The operations and management plan: How I intend to be running the company daily.
- Financing factors: How I intend to raise money to sustain the business.
For every section in the business plan, it is important to give it not less than three pages to be in a position to do some really good explaining.
As the business grows, the business plan needs to be regularly updated.
How to finance the business in Ghana
In my quest on how to start a business in Ghana, one of the major issues that I must address is how to finance the business.
As a businessman, it is imperative to always consider using the most appropriate funding method for the specific business.
Below is one of the many ways a startup business can be funded.
- Funding from one’s savings: When one funds their own business, it usually takes longer to pick, but the best thing is that when it does, the owner is in full control of its equity and destiny.
- Pitch to friends and family for friendly grants: Friends and family come through as a very reliable source for grants and soft loans, which can be used as capital.
- Request a business grant: Various organizations provide startup businesses that have the potential to scale and become big with business grants for the long term running of the business.
- Join a startup incubator: There are several of these companies for anyone looking at how to start a business in Ghana to take advantage of. The best thing with them is the fact that they offer very flexible interest rates and also support in offering working space etcetera.
- Seek a loan from a bank: This is the most common way that many businesses manage to start up. The most important thing is to seek a bank that offers the most flexible loan facility.
Develop the product or service
Once a funding source has been established, the next and most important thing is developing the product or service. At this juncture, as a businessman, I can confidently test how the product is being received by potential customers and learn what to improve so that by the time it is released to the market, it will be ready to go to the top.
Build a team
Once the product prototype has been developed, tested, and proved to work, the next thing would involve looking for a team to work on the production, marketing, and all other areas. The hired team should be professional and able to clearly understand the business’s vision. As a businessman, I should also follow all hiring protocols to get the best team.
Find the most appropriate location
This is where the business will be officially situated, and based on its nature, it will be either an office or a warehouse. The business location should put all potential customers in serious consideration when it comes to accessibility.
Can a foreigner start a business in Ghana?
The Ghanaian government encourages foreigners to invest in the country provided they abide by the set rules. Ghana has a lot of foreigners operating businesses that have employed a lot of skilled and no skilled labor.
How to start a retail business in Ghana
Any businessman who wants a retail business in Ghana will not have a hard time. All that is needed are the necessary permits and capital. Locals in Ghana are good consumers of the retail industry, and if one approaches their spending power with good quality products and fair prices, the business is, without a doubt, poised to go perform well.
Why is it advisable to start a business in Ghana?
Ghana is one of the fastest-growing economies in Africa and has a lot of startup business potential.
Since a lot of its populace belongs to the youth demographic, it serves as a good location for anyone with a unique business to trying venturing into.
In the last few years, Africa as a whole has also been identified as one of the most business-friendly continents on earth and especially when it comes to businesses related to emerging technologies.
Types of company registrations in Ghana
In Ghana, there are six different companies that businessmen register.
The specific type of business registration depends on the specific need of the business owner.
- Company Limited by Shares: This company has at least two directors and is registered at the Registrar’s General Department.
- Company Limited by Guarantee: This company structure is best for non-governmental organizations.
- Company Unlimited by Shares: This is a business entity that is registered at the Registrar’s General Department with at least two directors with one of them acting as the main shareholder.
- Sole proprietorship: In this type of business, an individual owns the business and all its exclusive rights.
- External Company: This is a company incorporated in Ghana and with intentions to do business in the country.
- Incorporated partnership: Where a maximum of 20 people can register a business.
Documents that are needed for one to start a business in Ghana
Any businessman registering a business in Ghana is required to possess either of the following documents:
- A national ID card
- Biodata page of the passport
- Driver’s license or Voter’s ID card
Fees associated with registering a business in Ghana
The fees associated with setting up a business in Ghana vary depending on the type of business. However, the difference is not so big, and upon seeking advisory at the registrar’s office, one can easily find out the exact prices.