From investors perspective, the best business to invest in is the one with a constant flow of clients, long term contracts or predictable revenue generation schemes, or constant business growth from repeatable clients.
In that sense, here are 6 simple but effective criteria to select opportunities or niches to evaluate:
- – Business with lock-in possibility: which means solutions once acquired by the client, will become part of the client day to day business operations, and therefore make it difficult to switch to competitor.
- – Productivity solutions: the biggest issues in Africa in many sectors and industries is a very low productivity due to lack of technology but also human resources deficiencies. Solutions with a high potential to boost business productivity in targeted niches would have high lock-in potential but also have high margin and predictable and recurrent revenue.
- – Recurrent & Predictable revenue generation solutions: solutions with the potential to generate revenue from the same clients in a predictable way would not only make the company stronger but also be easier for investor to pay attention to.
- – High margin growth sector: the addressable market should be one with high margin business model and also one with high growth perspective.
- – Underserved or overlooked niche satisfying all above criteria: There are still many niches for IT solutions which are currently overlooked, and we will list them for consideration.
- – Solution which requires deep local knowledge and connections which would be a barrier to entry for bigger and better funded foreign competitors.