From the September 2006 issue of Entrepreneur

Even though there's still no electricity at Hassina Sherjan's new factory on the outskirts of Kabul, they really don't need it today. Sunlight pours through the large windows and illuminates a busy room, where 12 men and women are working on pillow coverings, curtains, place mats and other high-end textiles. They grin as Sherjan inspects their work: glittering lines of hand-applied beads on what will be a set of elegant table runners.

"I have to keep reinforcing the idea of quality," says Sherjan, president of Boumi Co. "We're producing for an upscale world market, so they have to understand a straight line is always straight and even a small stain on the fabric isn't acceptable."

All the workers are dressed in traditional Afghan clothes except Sherjan, whose Western clothes and uncovered head stand out. Hers is a look that's becoming more common in Afghanistan. The 46-year-old is one of the millions of Afghans who fled the country during nearly three decades of strife. Now, some are returning to start businesses, and they're finding that Afghanistan is an entrepreneur's dream.

"If you want to make money today, figure out how to take advantage of the growing economy in Afghanistan," says Kate Buggeln, a New York City consultant who volunteers with the United Nations-affiliated Business Council for Peace to assist women starting businesses in Afghanistan and other post-conflict countries. "The entire world is pouring in money for reconstruction, and an infrastructure is emerging. Security is getting better because the Afghan people are resolute that they will not go back to the chaos of before."

Of course, there are certainly challenges to doing business in Afghanistan. Even in Kabul, the most stable and developed part of the country, the electrical grid only extends to some areas. Power is irregular, forcing residents and business owners to run generators. Most streets are unpaved and un-marked, and telephone and internet services often crash when it rains. Businesses can't rely on an established supply chain because there isn't one--nearly everything they need must be imported. It's also hard to line up a trained work force; skilled, experienced employees often hire out at a premium to the thousands of nongovernmental organizations, or NGOs, in Afghanistan. The NGOs have also driven up the cost of doing business, with landlords now demanding first-world prices for third-world properties. For safety, many businesses pay for armed security guards and concertina-wired compounds.

Also, centuries-old traditions often stand in the way of modern business practices. Three years ago, Rangina Hamidi, 29, left Virginia for Afghanistan and founded a company in one of its most conflict-ridden areas. Kandahar Treasures incorporates the beautiful embroidery Afghan women traditionally do in their homes into textiles for an international and domestic market. Hamidi had to find women whose husbands would not only let them work for her company, but also let them work outside the home. Now Hamidi struggles with the attitudes of the women themselves: "It's difficult for them to understand the need for a timetable, structure and discipline. [They] want to work as they would in their homes, and it's difficult for me to run a production unit [that way]."

Still, the absence of amenities has created many entrepreneurial opportunities in Afghanistan. "You won't find another place that offers so many opportunities," says Tamim Samee, 42, a telecommunications professional from Washington, DC. "Here, everything is needed. You take a chance to run a business here, but everything is on the upsurge." Samee has founded two high-tech companies in Kabul: Ora-Tech, which develops and manages databases, and Digistan, which does systems integration for large companies. He has also opened a model farm outside Kabul, showcasing new techniques in growing, irrigating and processing traditional Afghan crops.

Although they're making money, Sherjan, Hamidi and Samee say they didn't return to Afghanistan to strike it rich. They want to be part of rebuilding their homeland's economy so extremists will have fewer opportunities to prey on the desperation of the poor and uneducated. As their businesses grow, they try to boost others by relying on local sourcing whenever possible--Sherjan, for instance, gets her cotton from Afghanistan's one remaining cotton factory. They also tap the local work force instead of bringing in cheaper, more skilled workers from neighboring countries. Often, this means investing in extensive training. Samee puts employees through authorized Oracle and Microsoft training programs.

"What keeps me going is the hope that something good will come of this place," Samee says. "It's a once-in-a-lifetime opportunity to be part of something bigger than yourself. I get goosebumps just saying that."