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How to overcome the challenges facing small businesses in Kenya

What I’ve learned working with small & medium size enterprises in Kenya

We spent the first two years of our business testing ideas and learning how to run the business. We had found a small office in the Central business district which we shared with an IT firm. To state that it was difficult is an understatement. We struggled to pay for the office space and meet our bills like house rent. In the first year of our operations, we managed to sign four clients. The first one was a Pizza restaurant. Our second client was a car tracking company. The third client was a yoghurt-making enterprise. Our biggest client at that time was a HR consultancy firm. 
 
We launched the Digital Marketing Class in the fourth year of our operations. The masterclass grew in size from four participants to twenty participants per class. This offered us a steady stream of revenue every month. 
 
In the fifth year of our operations, it became evident that we needed to develop a software and generate recurring revenue. And that’s how we were going to scale our operations. Here are the lessons I’ve learned working with small and medium enterprises in Kenya: 

 

Small businesses in Kenya face similar challenges

Small and medium size enterprises in Kenya face similar challenges that revolve around seven key areas: Sales and Marketing, Technology and Automation, Legal and Compliance, Human resource management, Financial Management, Strategy Development. We also observed an unspoken need that has a deep impact on the business- Leadership and personal growth of the entrepreneur. If the entrepreneur is not growing, the business cannot grow. The entrepreneur should invest in his/her personal development regularly.

Focus on developing a good product or service.

A well-developed product or service will provide the enterprise with a constant source of income and ultimately allow the enterprise to scale up. For instance, building a software as a service or recording some educational, niche content that you can sell online can provide a consistent source of monthly income.

A Certificate from your Industry regulator builds credibility

Whatever business you are in, ensure you have the requisite certification from the regulator in your industry. For example, if you run a school or college, ensure you have a certificate that recognizes that you are offering educational services. A certificate from the regulator gives your business credibility. If you run a health clinic, get a certificate from the Ministry of health or the county government. It also doesn’t hurt to ensure you pay the requisite taxes as that increases the opportunities you can get. For example, companies that are audited are required by law to only work with suppliers who have a tax compliance certificate.

Be active on social media by publishing useful content

Having a strong online presence will widen your customer base. For example, if you sell wine, having a website or a Facebook Page can help you get orders from online customers. If you have a website, ensure you consistently publish relevant, quality content that addresses the needs of your customers. That increases the SEO value of your website and makes it easier for potential customers to find it.

Automate and digitize your services to create convenience for customers

Automating services using technology creates convenience for your customers and increases customer loyalty. Digitizing your business helps you audit transactions with ease. When you’ve digitized your accounts, it makes it easy for the accountant to get reports. For example, I know of a web hosting provider who automates payments, invoicing, and receipts. You buy a domain via Mpesa, then you instantly get an invoice and a receipt via email. Everything is automated and there’s no human input involved. Even when you’ve forgotten to renew your domain, you get two reminders via email.

To accomplish more in your business, build systems instead of just setting goals

Recognize the power of tiny gains. Success is not determined by the number of goals you come up with. Success is determined by the process or habit you follow every single day. This is an important lesson in running a business, when investing, and even in marketing. Tiny incremental changes that you make every single day will help you achieve more than just setting goals. There’s a beautiful article written by James Clear that delves further into this topic.

When hiring, conduct background checks

Go beyond what is stated in the CV when hiring. Evaluate the applicant’s values to determine if they align with the organization’s values. When recruiting employees, it is important to conduct background checks from previous employers. We once hired a software developer based on what was on his CV. We failed to dig deeper to find out what his previous employer thought about him. If we bothered to call his previous employer we would have learned that he was a lazy, alcoholic with a ton of excuses. We gave him two months to build software and he could not present anything close to what the client wanted. We fired him but not after we had paid him 80K and he delivered nothing.

Manage costs to make profits

To run a profitable business, the entrepreneur manages these three critical costs. The first one is the office rent. Move to a less-costly office or work from home to save money. The second cost is salaries. Retain only critical staff. Offer non-critical staff short-term contracts, reduced working days, or reduced allowances. Consult your tax advisor on how to reduce your tax obligation.

Focus on value, not price

When your customer understands the value you’re creating, the cost of the service becomes less important. As an entrepreneur, you need to carefully choose the type of customer you want to serve because that can lower or increase the value of your brand.  Customers are not always looking for the cheapest service. They want value as demonstrated in this Google trend report.

Worldwide search interest for “best” vs. “cheap”.

Worldwide search interest for “best” vs. “cheap”. Cheap is not always what customers are looking for. They may be looking for value.

Worldwide search interest for “best” vs. “cheap”. Cheap is not always what customers are looking for. They may be looking for value.

Build your brand, no one can do it for you

No one can build your brand. You have to build it yourself. You should create a sales and marketing engine that brings new business. For example, we learned that creating quality and relevant content that addresses the needs of your customers is a powerful way of growing a business

Celebrate the small wins and reward yourself to stay motivated

Finally, running a business consumes a lot of your energy and time. Ensure you celebrate the small wins. Document and celebrate the small achievements you make per week to keep you motivated. Remember to pay yourself first to stay motivated.

Published by Francis Waithaka – Founder of Digital4Africa. I’d like to hear your comments.  Follow me on  Twitter