A few days ago, a friend of mine called me and said he wanted to legally register his entertainment company in Cameroon and that he needed my guidance on a few things. (PS. I am not a lawyer and this is not legal advice). After a chat with him, I thought sharing some tips on my social handle could help someone
In the past 15 years, I’ve engaged in all kinds of startups mostly around the entertainment and media space, but also in social enterprises and NGOs. I have personally legally registered at least 6 companies (that are mine or in collaboration with someone) and 10+ that belong to others. Out of my 6, only 1 remains in full legal/financial standing, and out of those I did for others, the statistics are almost the same.
First and foremost, statistically speaking only about 2 out of every 10 startups stay operational after 5 years. (And this is all industries) talk less of an industry like the entertainment business which is quite complicated. This means the chances of your LLC success whether as an artist or as a record label, publisher, etc. are already limited
Secondly; because of our high dependence on oral communication and almost complete lack of proper accounting in Cameroon, The government tax collection methods, tend to assume that everyone is a liar, and irrespective of your accounting you are forced to pay taxes whether you make a profit or not, irrespective of your expenses. this already puts your company at a disadvantage compared to your peers in other countries. (forget about the self-declaration of taxes in the books. Only big companies get away with that)
9 out of 10 Startups that I’ve come across in Cameroon; are bootstrapping. meaning they begin with little or nothing and hustle the capital and revenue as they grow, which adds to the layers of challenges startups already have. Sometimes; the product is good, but the investment is not enough.
If you don’t have all the skills your business requires, you will need to hire people, and this costs money.
If you have to rent office space; that adds to your expenses.
All of what I have spoken about doesn’t yet include; the actual core cost of producing; promoting and selling your product.
From costs of creation to the high cost of maintaining a legally registered company, talk less of other market realities, here are a few ideas I can recommend,
Incubation: Find a startup incubator that already has business licenses and joint basic services like accounting, etc. until your company is able to use a full LLC of its own.
Partnerships & collaborations: Consider joining with similar businesses of the same level; to contribute joint resources.
Start as an Association: and later transfer to an LLC when possible (please seek legal advice)
Investment: After you build up your business plan, find the right investment before starting up your business
Work with an established company: Find an established company in your industry and cut some sort of deal that permits you to use their license to run your startup till you are able to run on your own
Don’t do it: Entrepreneurship is not for everyone; it’s okay not to do it. You can work for a company that you love and still be happy
Once; you feel your company is able to run on its own; consider using a government certified; private accounting center; I have been using one for the past 2 years; and it works well for me.