The faces of the world’s richest men and women are pretty familiar and their inventions, or businesses, pretty well known. Think Bill Gates and Microsoft, Jeff Bezos and Amazon, Mark Zuckerberg and Facebook or Larry Page and Google. But then comes Aliko Dangote, Africa’s wealthiest man and a foremost entrepreneur, who is involved in a myriad of businesses, but who might lurk in the shadows when the world’s richest are mentioned.
Aliko Dangote is not your ordinary businessman. He is an incredibly ambitious investor, Africa’s Warren Buffett. He had been the richest man in Africa for well over 10 years. Although he is 63, and still seems to be starting his entrepreneurial journey, Dangote started his business journey as a very young man. In a few short years, he had become a top industrialist and, as of February 28, 2020, has an estimated net worth of USD9.8 billion, according to Forbes.
As a child, Dangote sold candy to his classmates, his business acumen growing in his formative years such that by the age of 21, his uncle extended him a loan of Sh300,000 that he used to open what would later come to be known as the Dangote Group.
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The entrepreneur started by importing and sell “soft commodities” in Nigeria in 1978. His businesses did so well that within three months, he had repaid his loan and had expanded his franchise. The newly founded empire was able to earn him Sh1,000,000 a day in profit, he said during an interview with Forbes. He bought in wholesale and sold in retail.
Fast forward to the new millennium and the Nigerian business mogul owns the world’s third largest sugar refinery. Dangote Cement produces 45.6 million metric tons annually and has operations in 10 countries across Africa. He owns nearly 85 per cent of publicly-traded Dangote Cement through a holding company. His manufacturing business, which started at the turn of the millennium, has been vastly successful and his net worth is about 3 per cent of Nigeria’s Gross Domestic Product.
He has ventured into possibly every sector available, with remarkable success. Dangote deals with cement, sugar, salt, pasta, beverages, real estate, oil, gas, telecommunications and fertilizer.
Dangote paints a picture of a man determined to continue making inroads into countries where he sees market gaps. As successful as he is, the man is unafraid of continuously investing, expanding his portfolio and remaining competitive.
And to aspiring entrepreneurs, there is a lot to learn from the Dangote story, if one is to grow fortunes and end up a massively successful investor. Here is what could be learnt:
1. Invest with the little you have
Most people think that there is a threshold which is a green light for investment. Without a certain amount of money, they would not invest. As a primary school child, Dangote used to buy sweets to sell to his classmates and make a small profit.
Invest little, make little profits and, step by step, grow the business empire. It starts somewhere. Take a risk- step out of the comfort zone and invest. Making, and rectifying mistakes in small businesses prepares entrepreneurs to deal with bigger situations when the business grows.
2. Have a plan
This could alternatively be phrased as “know what you want”. What are you passionate about? Then make a plan for the same, complete with goals that you intend to target, and the timeline for the same. Coming from an entrepreneurial family (Aliko’s grandfather, Sanusi Dantata, was a wealthy entrepreneur) Aliko knew that business was what he wanted.
Bill Gates knew that his passion lay in software development and he concentrated his efforts there. Elon Musk is a successful mechanical engineer who always knew that his passion was around machines. It is hard to assume that Dangote would have been a billionaire musician or programmer.
Identify your passion and talent and align your plan to the same so that you invest in the line that you will follow without needing external motivation, or coercing. Do what you love.
3.Take a loan and honour the terms
With a plan intact, capital is usually the next step to attack the idea and set the business wheels spinning. But for most aspiring entrepreneurs, coming across the money to start the venture is a big issue.
Take a loan, but more importantly, make sure to account for every single coin of the loan. Invest wisely, reduce wastefulness, optimise on spending and keep a good record of cash flows. And, most importantly, honour the terms of the loan by paying up at the right time.
4. Identify a market niche and seek to expand your portfolio
Aliko Dangote had been adding new products to his production line with every passing year. His empire is multi-faceted and he deals with very diverse products- from agricultural produce, to cement, to oil, to transport and communication. Before investing, an entrepreneur should ask himself if the investment is tenable. Is the market sustainable?
How is the competition? Does the market offer space for expansion? What new thing can I bring into the market? In an interview with Mo Ibrahim Foundation in 2019, Aliko Dangote said that the best investment niches in Africa right now are in ICT and agriculture. Quite interestingly, he has lately been putting a lot of investment in the sectors.
5. Keep going. Don’t give up
Startups are bound to experience hitches, from rigors of heavy taxation to unfair competition methods by bigger companies. There are a lot of winds that startups are bound to face, and some of the problems persist even as companies grow- big problems for big companies.
In 2014, Aliko Dangote suffered greatly when the Nigerian currency faced a slump. And coupled with falling stock prices, erased more than $7.8 billion of his fortune. To put that in perspective, the drop alone was only $2 billion less than his current net worth.
But Dangote did not give up. He continued trying, weathering the storm.
That is what aspiring entrepreneurs should do: Sticking in even when fortunes plummet. Markets are rough. There are peaks and troughs- and the best of businesses are those that keep gong no matter the terrain.