In 2019, Ellen was laid off from her job in construction but instead of giving in to the gloom of the situation, she turned her attention to an idea that had stuck with her following a conversation with her sister a while back, “why not go into fish smoking?”. To set up her business, she needed a smoking kiln and so she took her savings and worked with a local fabricator to design and build her smoking kiln. Ellen worked with her sister to purchase fresh fish from local producers and smoke it to get it ready for market. Encouraged by the positive response from her initial clients, she set up Kabanza Foods. Ellen relied on her networks to find clients and her friends from church were very supportive customers. The sisters worked hard to find new clients, including going door to door to market to potential clients and gradually they started to build a loyal customer base. The company even secure two clients abroad who made large orders on behalf of other Zambians in their communities.
The company appeared to be doing well and sales were growing until 2020 when Covid 19 related lockdowns were enforced, leading to market disruptions. For clients whose livelihoods were affected by the lockdown either through layoffs or reduced working hours, this resulted in a decrease in demand for smoked fish. In addition, the bulk of Kabanza Foods’ customers were from the Copperbelt and abroad, so supplying them with fish became difficult when travel restrictions were introduced. In an effort to adapt to the decline in sales, the company started to provide training and services on how to smoke fish service to other businesses and people in the community.
Since the lifting of restrictions, the company has slowly started to recover and has even acquired additional machinery to support expansion plans. The company has acquired several pieces of equipment, including two smoking kilns and offers fish drying services to the public who are charged for using the smoking kilns and labour. The modern smoker and scales were acquired using a loan from CEEC, while the first one was made by a local fabricator. In the future, Kabanza food plans to open up a retail shop and expand its product range to include smoked chicken and other meat products.
The business mostly relies on an organic ‘word of mouth’ growth model driven by individual customers who were referrals from church networks, colleagues and door-to-door sales. The business is profitable but had challenges with expanding and finding new clients and has engaged digital platforms like WhatsApp and Facebook. Ellen and her sister are the only two full-time employees in the business but they do engage casual labour when the workload is high.
The current business environment is difficult for small businesses to thrive and the company has been able to continue operating by pricing their fish affordably and is able to breakeven, but if the cost of running the business continues to increase, Kabanza Foods might be forced to reduce prices, so they do not lose the hard-earned customer base they have acquired.
Kabanza Foods is registered with the Patents and Companies Registration Agency (PACRA) and the registration process was hassle-free. The company made use of the one-stop shop set up by the Zambia Development Agency (ZDA), which provides assistance to people interested in setting up businesses. ZDA provided advice and recommendations on how to access loans and provided guidance on which companies and organizations to talk to for support. Ellen also benefited from an entrepreneurship training course sponsored by Barclays Bank and ZDA called the EMPRETEC training as well as exposure through the PUSH Women’s Network, which facilitated access to a stand at the Lusaka Business Expo in 2022. In addition, the business has accessed CEEC funds provided as a loan which must be paid in five years at an interest rate of 12%.
While the support from ZDA and other organizations, helped smooth the entry into the formal business environment, Ellen encountered some challenges navigating the tax compliance regulation. She noted how this process was hard to understand, and services are equally difficult to access. Further, market linkages are needed as well as platforms that would expose SMEs to markets such as business expos.
Comments