eBusiness Weekly
Kudzai Mubaiwa
A recent report indicated that the service sector is increasingly becoming a major contributor to the economy, recording positive growth and employment. This sector includes tourism that we focused on as a standalone opportunity, but also includes other business activities such as transport, communication, distribution, education, information technology, construction, financial services and consulting.
Some of the greatest institutional, regulatory and legislative bottlenecks are found in a number of these spaces. As a result, not many formal small or emerging businesses are found in the sector, for not many are motivated enough to jump through the necessary hoops. Those that have dared try, given quality service, and have been consistent have been richly rewarded.
Like the other sectors, opportunities abound for new, smaller players that demonstrate superior ability. The business models of earlier entrants are not all up to date with our current situation.
Some completely failed to reinvent themselves and are stuck with both old and expensive attitudes and equipment/facilities. This is especially true for communication and information technology.
Creators and suppliers of such services know that it is a competitive world and to survive, companies must have the newest and most efficient technology.
Just over 15 years back, very few companies offered the telephone and mobile phone service for calling and/or sending short messages (SMS).
In a short while, some pursued value added services and became the giants they are today, whilst the others became perpetual followers because they did not have deep enough pockets to invest in physical infrastructure when it mattered.
However, technology has since progressed and some telecommunications companies can be run entirely on the internet.
Access to the internet made easy by some of some of these (now) large companies has given rise to a knowledge based economy, and stimulated a shift towards services rather than hard industry.
Anyone that knows anything can give it a shot on the internet. Broadcasting is “easy”, you do not need a full blown TV or radio station, just a decent quality device and content that you can privately stream video or audio on social media and other open source platforms.
Blogging allows even the worst of writers to share written content on topics they care about and they can monetise when they gain traction through both online and offline initiatives.
There are no gatekeepers and one can set up within a week and monetize in the next one if they get it right.
Many personalities and companies are running thriving online platforms and making the money by offering knowledge and information to larger audiences on a small budget.
Non tradable services like education that were the preserve of government and a few old school trusts have been “invaded” by enterprising former and current educationists that are trying out things that they likely never got the opportunity to do with their employers, or importing ideas they witnessed in other countries with impressive results.
Today’s parent (read consumer) just wants decent education for their child, meaning a low child to teacher ratio, good school infrastructure and varied learning programmes.
There is practically a school for every pocket now starting from early childhood learning all the way to college level education.
Their models include making money from the fees and the supply of uniforms, stationery and technical equipment in-house, and charging a premium for admission into an exclusive learning society whose reputation they build over time.
Transport was steadily disrupted when the large bus system was taken out by the more agile “combis” — the 16-seater vehicles that would fill up faster and be more flexible in picking and dropping, but these were further disrupted by the “mshika-shika” — even smaller vehicles that fill up much faster and ply very short distances to the convenience of commuters.
Within that ecosystem a few enterprising ones built innovative financing schemes — a lease to buy proposition for drivers, designed to transfer ownership and with it risk to the buyers.
More long distance coach companies have emerged in the past decade, crowding out the old type “chicken buses”.
We still have room for serious private players for domestic flights, particularly the no frills type that minimise costs.
There are still more opportunities in transporting goods in addition to people. With the major railway company down for so long, it would be interesting for local companies to invest in rolling stock and specialise in delivering the requirements and outputs of agriculture, mining or manufacturing at an economic cost.
New smaller players would not carry the burden of large costs, particularly for staff, and would like provide much more modern type rolling stock.
The construction industry now is filled with many new players in the form of architectural design service providers, project managers, property developers and building companies.
Again, the smaller outfits, often structured as one or two men consulting companies, are typically modelled very lean and bring in manpower on a project basis, a luxury established, bigger companies with already fixed staff do not have.
We are in the age of 3D printing, and entire houses are being fabricated by machines, leaving very little room for human intervention in the construction process. Entrepreneurs that are passionate about housing and commercial building companies would do well to acquaint themselves with these developments in their sector.
Financial services as we know them are undergoing disruption and will experience the most rapid of changes than any other sub sector under services.
As we write, newer companies have started bringing to market innovative investment products that appeal to the bottom of the pyramid but still leverage the available technology used by ordinary folks.
The technology of block-chain is already causing many an executive in banking and finance sleepless nights as it is little understood but known to be able to potentially cut out the middleman role of banks and other financial institutions, especially so remittance platforms.
Smart new entrants are making their make and processing notable quantum of funds, and these start-ups are being sought as partners by the wiser old type institutions that see the light and are aware that dark days may be coming.
The small to medium enterprises that stay woke in this season, will have first mover advantage and change the service industry as we know it. In services, everything can be innovated, this is a huge opportunity for small players to start or grow phenomenally. They have the benefit of hindsight, learning from the struggles of bigger companies, coupled with the agility in decision making and execution that comes with small size.
Feedback: Twitter @kumub, Email [email protected]
