[DOCUMENT TITLE]

[Document subtitle]

[DATE]
MICROSOFT
[Company address]
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Table of Contents
1.0. Introduction...................................................................................................................................2
2.0. Business Idea..............................................................................................................................2
2.1. Verifying the Opportunity........................................................................................................3
3.0. International Target Market and Customer Segments................................................................4
3.1. General Demographics...................................................................................................................4
3.2. Firmographic Segmentation..........................................................................................................5
4.0. Networks..........................................................................................................................................7
5.0. Risks................................................................................................................................................8
5.1. Technical Risks...............................................................................................................................9
5.2. External Risks...............................................................................................................................10
5.3. Organizational Risks....................................................................................................................11
6.0. Source of Finance and Support....................................................................................................11
6.1. Idea Development.........................................................................................................................11
6.2. Proof of Concept/Prototype development Stage.........................................................................12
6.3. Commercialization and Scaling Up.............................................................................................12
7.0. Route of Internationalization.......................................................................................................12
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1.0. Introduction
In international entrepreneurship is defined severally in the literature, early works like that of
MacDougall (1989:388) in [ CITATION Zuc16 \l 1033 ] describe international entrepreneurship as
“the development of international new ventures or start-ups that, from their inception, engage in
international business, thus viewing their operation domain as international from the initial
stages of the firm’s operation”. Oviatt and McDougall (1994:49) in [ CITATION Zuc16 \l 1033 ] in
their study of international new ventures also go ahead to define it as “a business organization
that, from inception, seeks to derive significant competitive advantage from the use of resources
and sale of outputs in multiple countries”. In this paper, there shall be discussions on a business
idea in line with relevant theories in International Entrepreneurship. Being a tech-based firm,
which develops its idea around the design and implementation of a new technological platform,
the report goes on to explore all relevant aspects of the business idea including the idea itself,
expected customer segments, anticipated networks for the establishment of the business and its
internationalization, associated risks, options for financing and the route for internationalization.
It is hoped that exploring these aspects will give an insight into relevant decisions and the
expected growth process for the intended business. The explanations would ideally show an
interrelation between the broad ideas of internationalization, innovation and entrepreneurship. It
was assumed from the outset that the company begins its international expansion at the point of
its business entry. In a dynamically globalizing world boundaries become blurred as businesses
becomes more and more competitive giving room for the blossoming of entrepreneurial
behaviours. When the edge of innovation is added then we have a chance to establish the firm,
commercialize a new tech product for possible new markets and also develop novel
internationalization capabilities.

2.0. Business Idea

This idea in large parts, is based on the business model perspective which conceives the business
as international from its onset. We apply technological innovation in our objective of seeking out
new markets.

In most African countries, there are a lot of difficulties with the system in terms of starting a
business, expanding a business into other countries within the continent due to the diverse,
fragmented and regulatory frameworks exiting in the different markets within the continent
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[ CITATION Aso19 \l 1033 ]. Businesses hoping to start or expand will face problems with IP
registration, sorting out taxes, and compliance management. It has been said that, a business will
need to about 54 corporate entities in 54 different countries and obtain about 400 permits to
access every market in Africa, also, on the continent, there is little or no cross-border
infrastructure to help businesses move into new markets and manage tax and other regulatory
compliances [ CITATION Lek19 \l 1033 ]. The business idea considered here is centered on solving
this problem; based in the United Kingdom, the business which would be tech-based offers a
single digital platform where businesses can register their startup or their intention to expand to
other parts of the continent. From this point we help prospective clients with these identified
problems. The name of the business would be Start and Scale Inc.

2.1. Verifying the Opportunity

The initial search was done on google using relevant keywords like ‘business incorporation
problems on the African continent. This search yielded about 64,200,000 results and it gives a
rough idea on how popular the problem is on the continent. A few of the articles that came up
like the International Institute of Management Development (2013) gave useful insights, noting
that Africa remains the third fastest growing region in the world, with an emerging middle-class
indicative of a more prosperous consumer base than one would initially think. The writer also
highlighted the problem which is central to this business idea which is the diverse country base
within the continent with attendant problems of complex varieties in currencies, languages,
physical and cultural barriers, political instability. Opportunities were spelt out in the following
light – the consumer base of the African middle-class constituting about a third of the population
(over 300 million people matching India), debt free nations like Libya, Angola, Algeria with
large amounts of money for investment for the future, vast opportunities for nutrition and
agriculture in large swaths of non-cultivated land (largest in the world). Multinationals who run
businesses on the continent are noted to have problems mainly in the areas of intellectual
property protection, cases of corruption that may affect joint ventures and the start of new
alliances, supply chain problems due to poor infrastructure. More recently, Asongu & Odhiambo
(2019) also highlighted the opportunity of a vast young population on the continent that makes
for the opportunity of a large number of individuals capable of creating new businesses or
enlarging existing ones; the paper also highlighted problems of doing business on the continent
including the high costs of starting and doing business, energy shortages, lack of access to
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finance, high taxes and low cross-border trade. Our business idea addresses at least two of these
four in costs and cross-border trade problems. Costs problems were associated with the many
procedures and corrupt practices involved in the processes of starting a business on the continent.
High costs are noted to be involved with registration and dealing with several licensing
registrations which are also problems that are popular in several literatures around on the topic of
entrepreneurship in Africa [ CITATION Tch18 \l 1033 ]. Other cost associated issues which our
business idea centers on include the procedures of enforcing a contract, startup procedures to
register a business, time to prepare and pay taxes amongst others. On high taxes and low cross-
border trade there are noted problems of limited economic integration. Oluwole (2021) in a
Business Insider Africa article highlighting the problems of doing business in Africa emphasizes
the need to ‘get many things right’ and to ‘choose an environment where the process is easier’
which brings to focus real issues with the procedures involved. We have centered the business
idea around these identified problems.

3.0. International Target Market and Customer Segments

Africa is known for having a fast-growing population and markets, in the same regard, the
continent has urgent needs for goods and services, fix infrastructural gaps, bring in more jobs
and reduce poverty [ CITATION Aso19 \l 1033 ]. In the light of this the market for our product is
diverse as we would focus on using technology to help businesses start up or scale across Africa
irrespective of the industry.

3.1. General Demographics

As at 2019, the population of the content was around 1.2 billion and was projected to reach 1.7
billion by 2030. Much of this projected growth is earmarked to happen in cities. This population
is also largely young and are characterized by rising incomes with projected consumer spending
alone predicted to reach $6.6 trillion by 2030 from $4 trillion in 2015 [ CITATION Lek19 \l 1033 ].
For these reasons, markets are springing up across different sectors on the continent where there
are obvious needs. Notable sectors include food, beverages, pharmaceuticals, financial services,
healthcare, education. This presents an opportunity for our idea in helping companies with
registration and other ancillary needs.

The product which is a digital platform is well fitted with majority of the features that is
preferred by the largely young generation. A large percentage of these are the millennials who
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can be described in the light of the VALS framework as the thinkers characterized by their
penchant to do some research before they make purchases, relatively financially stable, and tend
to use technology in functional ways [ CITATION Str21 \l 1033 ] The individual customer is thus
targeted based on their need to preserve time and make profitable use of technology in terms of
the ease it brings to rather difficult processes like starting business on the African continent. We
are introducing a product that covers for these caters to the customers penchant for information,
and their need to be sure that they are in good hands in terms of services required.

We imagine that the idea is also to be sold directly to businesses hence needing a firmographic
segmentation.

3.2. Firmographic Segmentation

It is evident that the spread of most of the major companies on the continent are limited to
specific countries; according to Leke & Signé (2019), an effective strategy for starting a business
with a market base in Africa would be to conceive a clear geographic portfolio with prioritized
countries and cities of operation. Thus, the market we are looking out for would be further
segmented by regions viz - South, West, North and East Africa. To help guide this effort, we
examine the spread of businesses across these regions from relevant data sources

There is an extensive spread of businesses scattered across the continent, South Africa alone is
noted to have about 1,559,848 companies across all sectors; Tanzania, about 104,367 companies,
Tunisia 235,986 companies, Uganda 526,080 [ CITATION Ope21 \l 1033 ]. Below is a graph
showing the leading companies in Africa and their respective market capitalization figures:
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The largest concentration of these firms is found in South Africa, a few in East Africa – Kenya,
North Africa – Morocco, and West Africa – Nigeria. Market capitalization is upward of $104
billion dollars for the largest company [ CITATION Sta219 \l 1033 ]. These identified countries in
each region would also be target segments where operations will be set up with partner firms
who carry out the actual required services of registering a company within and beyond their
immediate jurisdiction as the case may be. The justification in choosing these strategic regions is
also found in the records that show the flow of venture capital on the continent. According to
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The aim would be to reach out to as many businesses and individuals as possible who might be
interested in starting businesses or extending their already established businesses to other parts of
the continent.

4.0. Networks
Since the advent of globalization, psychological and practical borders have been removed in
terms of doing business abroad. Relatively small firms have been able to internationalize using
innovation and at a fast rate. This is the character of essentially innately entrepreneurial firms
according to [ CITATION Ahm172 \l 1033 ]. In line with the network model of internationalization
which is described in terms of the building of relations with network participants in international
markets [ CITATION Rat12 \l 1033 ], the most plausible way for this idea to work would be to
develop long term interactions with relevant professionals in the foreign environment who are
mostly familiar with the terrain and are able to give the most accurate timeline for the delivery of
the required services. This is indeed one of the most crucial aspects of making the business work
and profitable as would be discussed later in the funding sources. Much of the anticipated
workability and hence profitability of the business idea will depend on if quality relationships
can be set up with relevant service provider companies on the continent which would be
confirmed in the proof of concept/prototype testing phases. All of this will define the strategy
and means of operation. Networks are also important as they help to solve the problem of the
need for large resources and skill deployment as most of these can be provided by creating
international partnership networks. [ CITATION Ahm172 \l 1033 ]

The company would rely mostly on establishing networks with strong entities associated with
providing necessary startup and registration assistance in different parts of the continent
concentrating mostly on the regional areas. The creating of these partnerships is expected to lead
to undertaking joint tasks and the mutual adaptation of resources that would increase the scope of
our penetration in the foreign bases.

We consider ourselves as the ‘early starter’ which means that links with foreign entities are
initially weak [ CITATION Rat12 \l 1033 ]. In the light of this, we need extensive information about
business operations in the markets we would like to explore in a bid to create effective
partnerships. Considering limited funds available to early starters, the most viable way to go
around this would be to hire an agent who would be charged with the duty of obtaining
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information about the foreign environment and thus helping to broker agreements with the most
likely entities [ CITATION Rat12 \l 1033 ].

5.0. Risks
Risk has been defined as the possibility of a experiencing a loss due to hostile events in the
course of business operation [ CITATION Tan19 \l 1033 ] Risk-seeking has also been a part of the
definition of entrepreneurship in the no-distant past [ CITATION McD00 \l 1033 ]

This idea takes on being international from the outset which implies the attitude of born-global
firms that seem to be unlimited by the constraining effect of risk [ CITATION Lie11 \l 1033 ]. The
notion implies being able to override all forms of risk, launching in the face of risk exposure. On
the other hand, there may be ignorance of associated risks which according to theory makes
entrepreneurs bolder in facing risky situations [ CITATION Lie11 \l 1033 ], this is not the situation
here, a major part of the motivation to take on the risks associated with this idea can be attributed
to the problem-solving capacity of software. They are also applicable in any part of the world
[ CITATION Mol20 \l 1033 ].

The major risks that have been identified are broken down into 4 different categories as shown
below
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Project Risks

Technical External Organizational

Intellectual
Requirements Regulatory
Property

Technology Market Resources

Customer Lack of
Complexity
Control

5.1. Technical Risks

While we are offering a service, the major way for its deployment is via software tools viz. a
website/mobile apps. Working via a platform like this has its own associated risks, in terms of
technology and complexity which if not well monitored can lead to problems. Since this is a
novel idea that has not really been duplicated anywhere it is important that all the technical
aspects of the project are gotten just right. The way to ensure this is to build, test and iterate
versions of the platform before it is finally deployed. This would borrow the ideas on innovation
theory which focusses on the adoption of new product or service. Innovation diffusion is noted to
involve the steps of awareness, interest, evaluation, trial and adoption [ CITATION Rog04 \l 1033 ].

In this case, it would involve the stages of proof of concept, a prototype and a minimum viable
product. We shall start internally to design a proof of concept – the proof of concept allows us to
see if the product can be built [ CITATION Tec21 \l 1033 ]. During this stage, we ask the crucial
questions “how easy its it to limit the many processes of starting a company in a diverse
continent like Africa to a single online platform where people sign up and register their
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intention? We would need to verify this with software engineers, and partner service providers
who would do the actual work on behalf of the people who sign up on the platform. The
information gotten from all these sources will go into fitting the online platform with ever
requirement possible. This will lead to a prototype development; once we have a functioning
prototype then a minimum viable product can be built. This will be drafted among partner
service providers and possible customers for feedback before we go to final product and
launching.

5.2. External Risks

This refers to external factors, some of these will include subcontractors, regulatory/political
factors, market, customer

Regulatory/Political Risk: this takes account of situations and events. the African continent has
been pointed out for political instability in many parts, it is also a continent where there may be
different forms of policy restrictions on different products and the possible effects of sanctions.
Specific areas to be taken care of here would include getting acquainted with necessary exchange
control regulations which can delay payments, and also taking note of the necessary import and
export restrictions and or allowances that may be existent in different countries especially the
regional areas of operation.

Exchange Risk: in terms of the market, we consider the exchange risk. This has been described
as the changing values of investment due to differences in value between two currencies
[ CITATION Tan19 \l 1033 ]. Due to the constant state of flux that exchange rates are always in, a
business originating from the UK and operating in Africa may have to face up with occasions
where the amounts generated overseas are always short of what has been earlier budgeted. The
way we hope to control this is to have effective policies in place, depending in the places of
operation, these will take care of steadying profit margins in line with sales made and help
minimize the undesirable impact of changing rates on sales and service procurements, allow for
cash flow control, and help to simplify domestic and foreign pricing [ CITATION Vin19 \l 1033 ].

Credit Risk: in terms of the customer, we consider credit risk. This is when the amount expected
is not received. We would be operating as a platform that links businesses with startup services
across the continent, this would mean being in touch with such service providers and using their
networks, thus to mitigate credit risks, customers will need to pay 100% of the required fees once
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they are assessed and onboarded on the platform. A required time will be given where all
services involved at the background would have been confirmed along with their required
timelines for delivery. Once this is done the required information would be given to the client
who would be expected to pay all required fees. In the event that this is difficult to achieve, we
hope to seek relevant financial where we can get letters of credit which helps to protect us as
seller of a service and our prospective buyers.

5.3. Organizational Risks

These covers intellectual property, lack of control.

Intellectual Property Risk: we believe this is a novel idea that only helps to simply the
difficulty of having to start or scale businesses in different parts of the African continent by
limiting the efforts involved to a simple registration on a web platform. This would require us
working in the background by partnering with actual service providers involved in the process in
the different parts of the continent while the operational head remains in the United Kingdom. To
protect the business model and the actual idea behind it, we would ensure there are trademarks
on all the tools involved and on the platform itself before we enter into agreements with service
providers in the respective countries.

Lack of Control: this business idea would largely depend on partnerships with foreign
companies and this brings about the risk of a loss of control. This may be along the line of
resources where t he firm with the upper arm tries to lord it over the smaller firm. There may be
challenges of establishing trust that will underpin the relationship

6.0. Source of Finance and Support

Due to the innovative edge of this business idea, we are considering funding options at different
levels They include: the idea creation stage, the proof of concept/prototype creation stage and the
commercialization and scaling up stage

There funding and support to be considered for each of the stages are as follows.

6.1. Idea Development

R&D Grants: this idea is born of research and development activities - understanding customer
needs in starting and scaling companies on the African continent and leveraging on technology to
solve these problems. R&D grants are usually provided by the government to non-government
 12

recipients. The United Kingdom in October 2021 rolled out Innovate UK Smart Grants which
seeks to provide up to £25 million for what they referred to as game-changing and commercially
viable R&D innovation capable of impacting the UK economy [ CITATION Inn21 \l 1033 ].

6.2. Proof of Concept/Prototype development Stage

This will involve designing the platform and establishing contacts with all relevant service
providers (partners) to determine the general workability of the idea. At this stage the general
features of the website are determined, and all the processes and professionals involved are
consulted to determine the timeline of service delivery. Funding to be considered here include
the informal venture capital market otherwise known as ‘business angels. These are high net
worth individuals who play a crucial role in the financing of innovative enterprise that are
considered to have a high growth potential [ CITATION Ram09 \l 1033 ]. It is hoped that funding
from sources like this would help augment personal funds and all the funding that could be
gotten from family and other close associates. Business angels are known to invest in start-ups
and provide personal access to themselves for other forms of support and mentorship. They are
also considered the best sources of finance for risk financing and entrepreneurial ventures
[ CITATION Van00 \l 1033 ].

6.3. Commercialization and Scaling Up

At this stage we must have cleared the technological uncertainty of the intended service,
however there must still be some market uncertainty left. In this case, there is a high market
potential, and a high-risk reward. This is often the turf of venture capitalists. Bank debts would
be inadequate in this wise as they tend to

7.0. Route of Internationalization

More often than not, Information and Communications Technology (ICT) has been a boost to
internationalization efforts of companies. Companies leveraging in ICT often internationalize at
a faster rate [ CITATION Asp04 \l 1033 ].

Due to the nature of this business idea, the chosen method of internationalization would be
partnerships. This is in line with the born global theory which describes a high-risk route where
cooperation in the form of global network and alliances play a crucial role. This goes well with
the proposed business idea. The network theory also helps us to understand why this route will
be necessary for this business idea as it helps us to understand a company in relation to its
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environment. According to the network theory, a company is simply the product of its
relationships with external knowledge holders and other partners because it depends on these
connections [ CITATION Kui07 \l 1033 ]. The external knowledge holders in this case are the
professionals who provide the actual company start up services (lawyers, accountants etc.) idea
can only thrive in the light of established partnership with service providers who will also be
responsible for setting the scope of the services to be rendered and the relevant time schedules.

Partnerships will enable firm synergy, and would help to minimize the cost implication and also
add the advantages of lower operating cost, access to local business operation facts and
procedures. The company may however be opening itself to the disadvantages of a lack of total
control over the operations in the foreign country and having to share its profits with the partner
in the foreign country. Given the attractiveness of the idea, and the viability of the market for it,
it would be worth the try.

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