Introduction

Today we find several young & dynamic individuals who aspire to start small business and what they
are always looking for business ideas with low investment.In order to help them I have compiled 10
business ideas which can be executed with low investment.
Definition of Terms
Small and medium-sized enterprises (SMEs) are non-subsidiary, independent firms which
employ less than a given number of employees. Entrepreneurship means the capacity and
willingness to develop, organize and manage a business venture along with any of its risks in
order to make a profit. The most obvious example of entrepreneurship is the starting of new
businesses.
Viable opportunity for small and Medium Enterprises that can be utilized for becoming
entrepreneur
Opportunity in Telecom and ICT
The potential in telecom and ICT in Tanzania remains largely untapped. But the potential is too
great to ignore and movement in the sector has already showed that the country is on the right
track. The government has poured large amounts of capital and energy into the National Fiber
Optic Cable network known as the National ICT Backbone (NICTBB). Following its connection
to submarine fiber optic cable operators EASSy and SEACOM, bandwidth costs dropped more
than 80 percent.
The expansion and upgrade of towers in Tanzania boost mobile usage and leads to a drop in
prices. Some experts estimate that mobile usage could match Kenya in the next five to seven
years. But even with a growth in usage, there is more to be done to ensure that it adds the highest
value to the economy. Mobile banking, for example, has not reached anywhere near its full
potential in the Tanzanian market. The country is still very much unbanked with less than 20
percent having a formal bank account. Kenya’s ICT darling M-Pesa has more than 40,000 agents
across Tanzania, a clear message about the growing opportunity in the country. More can be
done, particularly with the development of local companies as well as with the expansion of
other African companies into the country.
The sector will also benefit from government and non-governmental investment in educational
programs, including laptop distribution, e-learning, and training centers. It is crazy, says Patrick,
a local software developer, but finding Tanzanians experienced in software development, or at
least with a strong understanding of the mobile market, is hard. “Local problems, local
developers, local solutions will go far,” he adds, “but we do not get the same capital as Kenya.”
That should change soon.
Opportunity in Energy (Excluding Oil & Gas)
Excluding oil & gas says nothing bad about a booming industry. But this sector is already seeing
an entry from the big international players and paying dividends through recent discoveries of
gas reserves. The potential for lower oil and gas prices is there, says one government insider, but
only time will tell.
Electricity prices are a different story. Prices can reach 27 to 29 cents per kilowatt-hour during
peak hours in the capital, Dar es Salaam. Independent contractors produce great returns in a
starving energy environment. Prices will drop, but at even half their price today, they will be
attractive to international investors, says a former Blackstone executive, though understanding
the dynamics of Tanzania’s regional politics can be a hurdle. But energy always involves politics
in or outside of Africa. Tanzania simply offers higher returns at the moment.
Opportunity in Real Estate
The energy industry, and an overall growing interest in Tanzania, drives this sector. A short
business stay in Dar es Salaam for $150 per night will feel like a steal. Buying property is also
becoming a growing headache for locals as prices skyrocket. Foreign investors are growingly
becoming interested by real estate plays in a market nowhere near its ceiling.
Opportunity in Logistics & Warehousing
Tanzania’s roads and railways are not the best in the region, but the government is making an
active effort to change that with the support of development finance institutions (DFIs). The
African Development Bank (AfDB) recently approved a $232.5 million loan for a Tanzania-
Kenya Road project. Roads and railways are the key to improving distribution and life in
Tanzania and to broadening regional integration, says one ADB insider, but most East African
governments cannot afford it without DFI money.
The growing improvement in roads and railways across East Africa opens opportunities for
logistics in a country where urbanization stands at about 30 percent, and many farms operate at a
significant distance from the ports in Dar es Salaam. Fuel and electricity prices have undermined
logistics and warehousing generally in Africa, but the changing dynamics around these two
factors in Tanzania in the near future should boost returns. Prices for both fuel and electricity
should slowly starting decreasing with new investments in each sector. As they drop,
manufacturing and industrials will grow, giving way to a demand for logistics and warehousing
for a multitude of sectors.
Opportunity in Agribusiness
Food consumption in Tanzania is a disturbing story. But it speaks to the great potential for the
agribusiness sector. According to the United Nations Food & Agriculture Organization (FAO),
70 percent of caloric intake requirements of low and middle-income households are met by street
food. Street vendors offer some of the best, juicy fruit in Africa, especially the pineapple, says
Nala, a local financial advisor, but locals typically buy sodas and small candies. Nala is not
wrong. Street vendors provided my nourishment while hopping from meeting to meeting.
As incomes increase and education improves, says Nala, we see a change in the diets of
Tanzanians. Experts forecast sustained high GDP growth in Tanzania given the recent discovery
of gas reserves and prospects for oil reserves. In the past three years, GDP per capita income has
grown by 10 percent. Caloric intake during this time has increased accordingly, followed by a
growing demand for vegetables, meat and dairy.
The demand has boosted prices and revenue. But Tanzania’s commercial-scale farming cannot
keep up with growing demand. Tanzania is blessed with diverse climate zones, fertile land, and
water to support its agriculture. Yet the amount of commercial-scale farms producing revenues
greater than $200,000 in South Africa is approximately 500 times that of the amount found in
Tanzania.
Chicken – at three times the price in the United States – provides great opportunity, especially as
Tanzanians demand more white protein. Dairy consumption – at 42 liters per capita – is far
below the recommended 200 liters per year. Dairy is not a staple in the Tanzanian diet, says
Nala, but this was the same in other East African countries before national education programs
were introduced and supported by governments and NGOs. Distribution of all these products
should also improve with the arrival of Africa’s larger supermarket chains, all of whose
representatives can be found lurking around Dar es Salaam from time to time.
A lot in Tanzania, in the end, is about potential. But investing in Africa in general is about
buying into the big picture. It will not be a quick stroke of the paint brush but a few strokes could
make a masterpiece.
Opportunity in Apps and Online Services
There’s a digital revolution taking over Africa. These days, many services now have an app or
are going online. Africa’s digital economy is growing really fast. These days, there’s almost an
app or online service for anything you want. If you’re looking for a suitable hotel
accommodation in Nigeria, Hotels.ng and Jovago.com are now the biggest online services in the
hotel booking business. Recently, Hotels.ng attracted an investment of $1.2 million. If you want
to watch African movies on the fly, there’s an app for that. Iroko TV is an app that gives you
access to 5,000+ African movies on your mobile phone. In January 2016, Iroko TV secured an
additional $19 million in investment funding to expand its presence across Africa. If you’d like
to order bespoke furniture pieces without having to run after artisans or worry about quality,
there’s an online service for that too. Showroom.ng is a Nigerian startup that’s changing how
people buy furniture in Africa’s biggest economy.
Startup financing Opportunity
Investing in startup and early-stage businesses is on the rise globally, accounting for 67 percent
of all venture capital (VC) funds in North America and increasing 19-fold in Europe.
Across Africa, start-up companies are attracting the interest of venture capital, private equity,
social impact funds and angel investors who are looking for higher returns on invested capital. In
2015 alone, the amount of capital invested in African startup businesses was roughly $0.5
billion. And in 2016, this figure is expected to double. As Africa’s young entrepreneurs continue
to come up with brilliant business ideas that have the potential to significantly disrupt both new
and established markets, it’s almost impossible for investors to ignore the lure of attractive
investment returns.
Conclusion
Therefore these viable opportunities can be used and exploited effectively by the small and
medium enterprises and become the source of entrepreneurs hence increase the national income
of the county
References

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