May 2021 –
My name is Thijs Boer. I first came to Rwanda in 2013.
At the time I was actually supposed to go to Ethiopia for my research as I was doing a master’s in development economics with a focus on agriculture.
Then I changed some of my research and decided to go to Rwanda instead. In Ethiopia, the goal was to do something with sesame, and I don’t know anything about sesame. But I had a little of bit of a background in potato and in Rwanda I could do some research with potato farmers.
Also, both my patents have their own businesses, so I came here with a scientific but also an entrepreneurial mindset.
So I finished my research, presented it to the embassies and BDC and IFDC (development organisations) and then they said: “Thijs, you noted in your research that it would be nice to make potato crisps from these potatoes. But why not doing it yourself? You could apply for a small fund and get started?”
So that’s what I did. I finished my masters and then I came back to Rwanda. I used to have a Rwandese business partner at first but he eventually dropped out.
#startingStrategy
He was supporting me in my research. We worked together for 2.5 years.
#insights
From the beginning already I realised that Rwanda is a small country with a small market. So it would be very difficult to get an economically viable business. So, straight from the beginning, I planned to go big.
#tax
The first thing was to learn how to make crisps before actually buying machinery. Then I bought the machines (which I had to import them into Rwanda). This was the first difficulty. I knew you could get tax exemptions, but I had to figure out how that worked first.
Then I had to instal the machines, and of course hire people and train them.
At the time I barely knew how to make crisps myself, so then going and training other people to do it, that was quite exciting…
Then I had to set up a sales team and a finance team.
The moment your factory is there everything explodes. You need to go to the markets, you need to produce, you need to go to the farmers. You need to get the right product as well so you need to do a lot of product development… everything starts.
#startingStrategy
I had the help of my partner, the Dutch embassy, and other entrepreneurs as well. But I was actually doing a lot on my own.
I also went to the Rwanda Development Board (RDB) a lot and they really helped me with many things. I was visiting the Rwanda Revenue Authority (RRA) a lot too.
There was a lot of trial and error at first. When I started, I wanted to do everything formally. But getting the right information was not always easy. But I got some help from Bralirwa and I also got some contacts via SKOL.
Overall, I had a lot of contact with the other Dutch companies here. When I first started, I went to every embassy event trying to meet good people that could help me.
If you want to start a business here alone, networking should really be part of your personality. I observe that the people who are not doing [networking] fail.
👉 European Embassies that are active in Kigali are shown on the EBCR Members' page
#collectingMarketData #startingStrategy
Mostly via my former business partner.
The RDB also hosts events where you can meet local entrepreneurs.
But about 80% of my information still comes from non-Rwandese people.
#tax
A lot of expats here complain about taxes.
Yet, a lot of things that they are complaining about are actually just straight forward.
The problem is that a lot of companies in the private sector (maybe 60% of them) that you’ll deal with do not want to follow the rules of the RRA. So, if you’re trying to be transparent with the RRA it becomes difficult because your suppliers or service provider will not always give you the right information and supporting documents. This can make things difficult and make your tax filings complicated and you risk the RRA telling you that your taxes are not in order.
Rwanda is changing very, very fast. For example, before June 2016 EBM (Electronic Billing Machine) were non-existent and everyone was using paper. Now everything is changing.
You have a big informal sector. Lots of payments with no proof whatsoever. Now you have to prove. And to prove you need to pay for the billing machine, you have to connect it to the network, and you need the platform to deal with the RRA, and the connection isn’t always working… So the infrastructure is not quite yet ready and also the people don’t always know how to use it properly yet.
for the EBM - v2 software.
So in Rwanda, we’re living in two realities: One where you need to do all the paperwork perfectly and the other is the informal economy. But those two realities need to live together and sometimes the companies who are trying to be compliant live in the middle of these two realities…
#tax
One thing is just to accept penalties. That’s what you don’t want.
The other thing is that you might lose clients. So, for example, some clients might even refuse to sign delivery receipts when they buy our crisps, because they are afraid of anything that comes close to formal. So, there you have to think: “Do I accept this, or do I refuse this client?”
And there the client might see you as arrogant and think you just don’t understand their culture. So it sometimes gets tricky to deal with these things.
For us, sometimes we might choose to sacrifice a client for the sake of being compliant and other times the opposite. But we can still be compliant in the second case, it just means that it makes our book-keeping more difficult.
So, we still give a delivery receipt for every client, and we still pay VAT (same for our suppliers). And if a contracting consultant doesn’t provide the right paperwork, then we pay Withholding Tax.
So in the end, we are actually tax-compliant. Though sometimes, because you don’t always have the official documents things might slip through and your bank statements might show that you have paid, but your tax statements don’t. And if that’s the case that means something has happened informally.
You really need to keep on top of it and if you’re busy when you’re growing, you sometimes forget things like that.
For me, last time I’ve paid a fine was June 2016. So, I have been managing well.
#accounting
I outsource it.
#accounting
No. I have just had a meeting with my new accountants today…
se our new accountant now they are certified by ICPARI would also advise any new entrepreneurs coming here to ask for your accountants’ certification and double-check it.
#accounting
I’ve changed every 18 months.
Because after each year I did an audit. Which I passed but with one or two unacceptable comments.
(I’ve even had to bring in 4 different auditors because I was also not happy about the auditors we got.)
#accounting
For us we’re still a small business and we don’t have a turnover that would justify an audit. But I still have to do it for my investors.
#investing
It’s still 80% Family, Friends & Fools. I’ve always been talking to investment funds, but we’ve never been successful with those.
Last year was the first year we’ve been sustainable (March of last year). Even during Corona as we cut down a lot of costs.
But we’ve always been balancing around the break-even point – also because we re-invest a lot of the profits straight back in.
#investing
Over 65% is form my family.
Then it’s also people who are in Rwanda that I’ve met through the networks.
Occasionally it can be people from NGOs who make a ridiculous amount of money, and they don’t really know what to do with it and when they eventually leave Rwanda, they want to have a reason to come back so they ask if they can invest in your company.
#importExport
We are trying to export.
Uganda is a very difficult market. Not because of Uganda itself but because of the relationship with Rwanda. There have been issues for many years…
We’re going to start building a second factory there now.
#importExport
The political situation. They’ve closed the borders because of political tensions between the two countries.
Our clients over there are reluctant to work with Rwandese companies. So as a foreigner I manage because it’s not obvious that I’m from Rwanda and they care less as well.
With Congo, it’s not a problem.
At the moment 65 to 70% of our turnover is still in Rwanda.
#importExport #insight
After about 5 months, because the idea had been there since the beginning. We knew the Rwandan market was too small.
#importExport
Yes. Especially for exporting food to East Africa they ask for the Rwanda Standards Bureau (RSB)‘s Standardisation Mark — or “S-mark” — license. But otherwise, you don’t need a special license.
#institutions
Rwanda is known to be quite strict about food regulations – which is good. They are also very good with showing up; they visit us to check regularly.
The Rwanda Food & Drug Administration (RFDA) are mandatory. You really need to comply with these.
The S-Mark is more of a quality mark. It’s something you can use for marketing. But, although it’s not mandatory, everyone says it’s a must.
Yes, so the FDA will ask us to check the Certificate of Analysis – that’s how they call it.
#insight
Likely the only raw material we source from Rwanda is potatoes and these usually come from small farmers. Some of them are illiterate so we cannot really ask them to do things formally or provide documentation.
We’re still waiting for confirmation from the RDB on this, but it’s likely that we’ll just need to get them to sign a document attesting of delivery and payment and that’s it.
#institutions
With the Rwanda Revenue Authority (RRA) we’re just used to not getting replies…
I just try to at least get my proof that I’ve been trying to change things if they don’t reply that’s not my problem. That’s why I always keep the proof that we’ve sent a letter.
But we have not yet received a fine.
If I really think it’s urgent, I go via the Rwanda Development Board (RDB). I have my own account managers there. Two people that I can go to whenever I have issues. They also sometimes call me to ask me how I’m doing and if I need some help.
The RDB is very helpful, but just cos I go through them, that doesn’t mean that I always solve the problem. They sometimes also get lost in the RRA system and can’t get through to them.
I think that’s once you reach a certain size of business. And when you also need to have an investment certificate.
#collectingMarketData
We help each other through networks likeEBCR but also other people who are in agro-processing. Generally, everyone informs each other when there are important changes.
Often when there’s a change, I hear about it before my own accountants and then I’ll just pass it through them, and they will analyse it to about how we need to go about it.
#collectingMarketData
We also have a Dutch network which is linked into TRAIDE .
TRAIDE has helped me a lot in the last 3 years.
#collectingMarketData
Sometimes it useful to be able to voice a concern anonymously and they know how to strategically do that through the embassy.
They are also very informed about business all over Africa. They have a strong team of experts who also help me with finding – and sometimes even writing – proposals.
TRAIDE know a lot about the agricultural sector as well. Water, energy. They are quite well informed about those things.
#IP & trademark
It was done through the RDB. It’s quite straight forward.
You just go to the RDB building, on the ground floor, and you give your logo you tell them what kind of industry you’re in. Then they need to put it in the gazette for about 6 weeks or 3 months so people can make a claim if there’s any issues. After that then it’s trademarked.
#IP & trademark
From the beginning.
Through at the fist we made a small mistake: we thought we were registered, but actually we weren’t yet. We were supposed to follow up on something but we didn’t do. It was from our side. We thought we got the confirmation that we got the trademark but actually it was just the confirmation that we’d paid and that they were starting the research.
#hr #startingStrategy
We used a lot of interns to start with. Then we kept the good ones. That’s how we’ve done most of our recruiting. Some of it has also been through references from our people.
For the most part it’s worked fine like that. The only area we’ve had issues in was accounting…
#hr
We’ve never advertised jobs. We just go to universities, like the University of Rwanda, INES Ruhengeri-Institute of Applied Sciences, or Akilah Institute for Women.
#hr
We didn’t actually try to approach them. They contacted us.
#insights
When we started our company 95% of Rwandans didn’t really understand “snacks”.
For instance, I was talking with a guy here in a bar and he was telling me: “You know Thijs I really like your crisps! In the morning with my eggs, I break the crisps and then I crumble them over my eggs. It’s very nice.”…
So, we really, we started from scratch and had to explain our product and how to use it.
So, introducing a new product can be a bit complicated…As an economist I learned that you only do what the there’s demand for. And that’s exactly what I didn’t do. There was actually no demand for my product.
#insights
Rwandese people mostly like vegetables. They don’t really eat much meat. They like fruits a lot, especially fresh fruits. We did consider going into dried fruits (to increase shelf-life), but no, they want to have them fresh.
Smoothies work as well.
The surprising thing is that although they like fresh fruits, the supermarkets’ fresh department is terrible. But that’s because Rwandese people are used to shopping for fruits at the local markets. But even there there’s definitely a lack of infrastructure for keeping things fresh.
Rwandan people like potatoes a lot. While in Uganda they are more fans of banana crisps.
#startingStrategy
You start with the segment of the market where you know that at least the people know your product. Usually high-end market and the “cool kids” as these are the people who have travelled etc. so they are more likely to know your product.
Then, you might then go and promote them in the bigger supermarket chains like Sawa City or Simba. (And of course, at first you need the expats to help your turnover.)
Then you slowly go down to the smaller supermarkets, because at the end of the day that’s where most of your turnover is. Generally, 70% of the turnover is from small shops and 30% is from the bigger ones.
At the beginning we really did promotions everywhere: people would taste our product; we’d ask them what they think etc.
Yes, we are working on that right now. We tried things like cassava, sweet potato, banana, and corn. We’re looking into new flavours as well because you need a lot of products.
#startingStrategy #advice
We have a product development team, and we also have a marketing team. We challenge ourselves and we bring it to the markets and do tastings. We also do tastings in our own factory.
Launching a new product is probably a year-long process which we own entirely because what we’ve learned is that whenever we outsource it it’s not done well.
(Which is possible because labour is cheaper here so you can get a good team.)When you want something done properly, try to do it as much as possible yourself.
Not everyone would agree with me but, what I would say is find a very good marketing strategist who helps you put your product in the market.
So, for us in Uganda we’ll set up a similar factory there, but with our marketing we’ll have different approach than with Rwanda.
I think your market strategy for your brand at the start is the most important thing. So, for your local marketing strategy, I would advise starting with a consultant.
But as soon as marketing becomes part of your operations take it over yourself. These people are expensive. You don’t want to use them for a long time. As a general rule remember to always follow up to stay in control.
#insight
Yes, it’s already here.
Though people sometimes fool themselves. They think they are healthy, but they are not.
If you look at how many people are jogging on Sundays, you realise that sport is a really big thing and many people have started thinking about more healthy food.
Of course, the poorest people don’t really care about healthy food. They just want to not be hungry. But some of the wealthier educated people are becoming more health-conscious by avoiding eating too much oil etc. But sometimes they might get it a bit wrong too. Like saying “We don’t drink coffee” but they drink Coca-Cola. So, it’s maturing still. But the trend is there. You see more and more people becoming dieticians etc.
#insights
Tanzania, I don’t really know, but in Uganda, it’s the same if not more.
For us making crisps, we don’t really see it as a problem because we feel like the people who want to live a healthy life, they’ll still drink their beer, they’ll still drink their wine, and they’ll still want their crisps to go on the side.
Similarly, there will always be some demand for chocolate or chips. I don’t believe that the near future will be made of people only eating salads…
In the last 5 years, I have seen a lot of companies trying to go into the snack market. A lot of cheap stuff. And they are coming and going. The only one who’s still here after 5 – 6 years is us and we’re the only ones who focus on quality ingredients; being as pure as possible. I never claim to be healthy; I only claim to be the best choice – and I really believe that we are.
Many people might disagree with me, but the ones that have failed, have failed because they are too focused on the money. And of course, your product needs to be affordable, but
That’s a common misconception I see from the west: They think “Ah the people here need to have cheap products”. But that’s not true.?when you make a cheap product that is also bad quality, people will not spend even that little money for poor quality snacks.
Rwanda has changed so much in the last 10, 20 years so you can imagine how much it’s still going to change in the 10, 20 years to come. That’s why I am now establishing my “quality” brand while the others are still focusing on cheap things. I really think I will be the one winning the long game.
So, what I also tell people is: “Okay, think about the price – reduce your profit margins – but respect the consumers and give them good stuff”. That’s something which I really believe is important.
#advice
The first thing that’s still lacking is market information.
There’s still a very big chunk of people with a very low level of living – I believe the GDP is around USD 800 per year. And there’s a large informal sector. Which means it very hard to get the real numbers. I would be really careful about that.
ℹ️ GDP per Capita in Rwanda is USD 820 per year according to the Word Bank
#insights
What I often say about Rwanda is that:
Compared to Uganda, Rwanda has much better infrastructure. There’s no corruption, you can easily get money in from abroad, and also send it outside again. So, your money is safe. Also, compared to some other countries the Government here is more accessible. Electricity, water, all these types of infrastructure is really improving significantly compared to other countries. So Rwanda has a lot of advantages.Rwanda has everything, except from the market.
But don’t forget the most important thing: the market. Because the market is still very, very tight. So, if you invest here you’ve got to believe in the country and its future. But for today or tomorrow, it’s going to be very difficult.
Same goes for consultants working with the private sector: Do not expect to get a lot of money from the private sector as a consultant here. Because the private sector doesn’t have a lot of money yet.
The only exception are the NGOs and the non-profits.
The private sector is still underdeveloped, so when you see an opportunity here don’t get too excited because the infrastructure is so good, think about the market. That’s why focusing on export from the onset is so important.
What I also usually say is that: Although there’s a big expat community, I don’t believe in only focusing on the expats. Focus on Rwandans too; ensure that also have solutions for the local people. That’s also something that you have to take into account when you come here.