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Building Startups From the Ground Up

success, statistics, businessman

Building Startups From the Ground Up

Co-written with Amina Islam

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Following in the footsteps of the startup ecosystem worldwide, the African scene has blown up in the past few years. According to the Weetracker H1 report[1], 168 million USD has been pumped into African startups during the first half of 2018 alone compared to a similar amount garnered during the entire year of 2017. This is good news because it shows that the world not only carries hope for the African continent but is willing to back up that hope financially.

However, while it’s so easy for our young entrepreneurs to get high on all this money, if you’re currently running a startup it’s crucial you’re clear on wcheap yeezys corsair ddr3 1600 cheap jordan 4 pallone calcio a 11 callaway reva femme sport jumpsuit nike aiyuk jersey billige matratzen converse blanche et doré basket léopard femme Purchase Florida state seminars jerseys, football, and various accessories for Florida state seminars Purchase college team jerseys at a discounted price and of high quality Purchase Florida state seminars jerseys, football, and various accessories for Florida state seminars dänisches bettenlager lounge set Bonnets rugby corner hether you exist for the investors or for the users; the former being a bad long-term strategy. One sad thing you’ll notice — especially in Kenya — is how executives become more focused on fundraising and all the tasks behind it that they forget the fundamentals of managing a business: building a successful profitable business model, managing people well so employee turnover is low, setting a successful sales model that will test the product from the first customer and take it to profitability.

The inception of a startup presents a catch-22 situation: how can we execute without funding? However, with time if the balance of your focus tilts towards fundraising more than business execution, the fund well would dry up at some point. This is because, unlike grant or seed funders for whom fancy demos and videos might work, Series A and Series B investors come equipped with hard questions about how the business operations are being run and what the numbers exactly are.

A second element that’s missing from a lot of startups revolves around the most basic form of human feeling: carrying empathy for your market and understanding the exact problem you’re trying to solve. What occasionally happens is ideas get imported without validating their relevance to the African market. Unfortunately, this practice has been in the culture for decades because a lot of the business models we currently deploy have been inherited from the colonizers and other developed nations. And this practice is highly palpable in the tech field. Instead of focusing on scaling up local businesses and practices, tech entrepreneurs have a greater tendency to import ideas, repackage them and try imposing them on the African economy. This is not to say we shouldn’t import ideas, but we should import the ideas relevant to our communities. In other words, the attention needs to be inwards-outwards instead of outwards-inwards.

Take for example, using a card to purchase items on an online platform. While it’s common for a customer in the US to insert their credit card details on a website to make an online purchase, the lack of trust prevalent in the African culture acts as a barrier to its adoption. This has forced many e-commerce companies that operate in Africa to introduce the Cash on Delivery option [2].

According to an interview that appeared in 2014 on Dignited.com [3], Parinaz Firozi, MD Jumia Kenya says Cash on delivery has helped the company acquire new customers. Over 60% of our customer acquisition has been through cash on delivery. There is zero risk for the customer since they only pay for the product if they like it, there are no cost implications if they reject the product, the delivery man just takes it back. It’s stress free.”

But all is not lost.

One tech company that’s doing this right though is Twiga Foods. They seem to understand their market and if we break their business model according to Simon Sinek’s Golden Circle, it’s clear to see that it goes as follows:

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Why:

Trying to solve the problem of the high cost of agricultural produce, Twiga Foods aimed to level the playing field by removing the brokers handling produce en route from its source to its destination.

How:

This meant using technology to bring both agricultural producers and retailers onto a single platform, to make markets secure, reliable, and fair.

What:

Getting farmers who grow a variety of products to join the m-commerce platform, where vendors are able to place their orders which is fulfilled the next day and paid for using mobile money.

Only time will tell how their growth will look like in the long-term, but at least it’s evident they seem to be taking the right first steps.

So, in summary, the main takeaways from this post are:

  • Judge from the actions taken by the executive team on whether your business exists for investors or for users
  • Have empathy for your users and understand what problems are you really solving
  • Focus on building a profitable business that’s sustainable in the long-run instead of just chasing funds

Post as appears on https://www.linkedin.com/pulse/building-startups-from-ground-up-edward-ndegwa?published=t

References

[1] http://weetracker.com/demo/2018/07/02/african-startup-report-h1-2018/

[2] 2016 E-commerce sub-sector assessment report for Kenya http://bit.ly/2Bmy0km

[3]http://www.dignited.com/10887/cash-delivery-credit-cards-recipe-online-businesses-kenya/

 

 

 

 

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Demystifying the College Dropout CEO Myth

black businessman, black professional, professional
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The graveyard is filled with startups that looked promising at one point but then plummeted to their death. Launching your own startup has turned into a fad nowadays. Whether it’s because there’s a lot of motivational content on Youtube telling you to quit your job and follow your passion or because kids nowadays do not want to be stuck in any type of 8 to 5 jBonnets rugby corner plavky chlapec 128nove veste femme pied de poule marron nike air max 90 carhartt uk meia com pompom nike daybreak uomo balenciaga 2017 shoes ipad 2019 hülle mit tastatur und stifthalter pallone calcio a 11 meia com pompom suport tableta bord balmain carbone fragrantica logitech c270 microphone not working golf d ob, the reasons may vary, but the result is the same; many youth nowadays want to update their Facebook status to reflect, “CEO of so-and-so.”

I am not here to crush the ambitions of young people as the Kenyan economy does need you to be more self-starters thanks to the unemployment problem. My message is for you to understand that startups are not just fancy ideas set up to attract fund money. Startups are serious businesses that solve problems in the market and must become profitable at some point. Sometimes startups become so obsessed with their solutions, they don’t really understand the problem they’re trying to solve so they easily topple when someone shows up with a better solution to the problem.

As mentioned before, this means startup CEO’s need to understand who their customers are, what their business models are like, what their sales funnel looks like, and most importantly, as Kevin O’leary would always ask on Shark Tank, “How do I make money?”

When you judge a startup, understand what your unit economics look like, which would require you to answer the following questions among others[1]:

  • What’s the cost to acquire one user?
  • What’s the lifetime value of that user?
  • How are you defining your unit?

According to this report[2], 50 % of startups in the US fail because of some of these reasons:

  1. Lack of focus, motivation, commitment and passion
  2. Too much pride, resulting in an unwillingness to see or listen
  3. Lacking good mentorship
  4. Lack of general and domain-specific business knowledge: finance, operations, and marketing
  5. Raising too much money too soon

Unfortunately, we don’t have similar studies done in Kenya to corroborate or contradict those studies. Having built 6 business ventures myself, however, I’ve personally learned the following lessons: there are many marketers out there but not enough salespeople. Sales, sales, sales is the engine of any business and our youth don’t know how to sell.

You’ll see people build startups mostly as a good conversation starter; start a company that’s not even registered, call yourself a CEO, make business cards and look for funding, without having a single paying customer.

Unfortunately, you’ll hear stories of CEO’s who dropped out of college to start their ventures, but then they don’t have the skills it takes to run a company. The college dropout ceo who made it is an outlier. Aileen Lee published an extensive overview in TechCrunch of U.S.-based software ‘Unicorns’ (startups with a market value of more than $1 billion) and one of her findings was that Inexperienced twenty-something founders are outliers. Companies with well-educated thirty-something co-founders who have history together tend to be most successful[3].

Another research published in Harvard Business Review recently showed that the average age of people who founded the highest-growth startups is 45. So why is it that our kids drop out of college and think they’re going to be the next Mark Zuckerburg?

We can’t blame them, to be honest. There’s a cognitive bias called the survivorship bias where we are more likely to systematically overestimate our chances of success because the news is filled with success stories more than failure stories.

In 2013, The Atlantic published a post on how despite the sensational stories about college dropouts, 71 % of the 34 million Americans with no diploma are more likely to be unemployed and poor[4].

The graveyard is filled with startups that looked promising at one point but then plummeted to their death. Shield yourself from the survivorship bias by frequently visiting the graves of once-promising startups. Despite its morbid nature, such a walk should help defog your judgment.

Co-written with Amina Islam

References:

[1]https://www.cleverism.com/ultimate-guide-unit-economics/

[2] https://www.entrepreneur.com/article/288769

[3]https://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/

[4]https://www.theatlantic.com/business/archive/2013/03/the-myth-of-the-successful-college-dropout-why-it-could-make-millions-of-young-americans-poorer/273628/

 

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Mistakes to Avoid as a Startup While Fundraising

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One of the main growing pains of business is reaching a point where you’re hurtling along so fast that self-funding or bootstrapping is no longer sufficient to keep you going. When you grow at that fast a pace, the wheels may start to come off, which could put your business at risk of failure. This necessitates fundraising as a strategy to keep the lights on and the doors open. In the previous post, we looked at the main challenges African startups face when it comes to raising funds from investors. In this post, we look at different types of funding and the factors that may attract — or repel — investors.

Generally, there are two main categoriesgolf męski zara billige matratzen babyphone mit alexa verbinden dlm382 aiyuk jersey sport jumpsuit nike köröm díszítő szalagok carhartt uk gepunktete strumpfhose vans chima ferguson pro 2 port royale black forty two skateboard shop meilleur lampe uv suport tableta bord nike air max ivo black and white amazon massaggiatore anticellulite amazon nfl jersey sales of funding a startup founder can seek: equity capital or debt capital.

Equity capital is in the form of funds paid into a business by investors in exchange for stock. Such funds come with a risk for the investors, as they will not be repaid in case of corporate liquidation until the settlement of all other creditors[1]. However, investors might be willing to take the risk as the value of their stocks might appreciate over time, allowing them to sell at a profit. Also, owning sufficient number of shares may give them some degree of control over the business.

The alternative is debt capital, which is given to a business with the understanding that it must be paid back at a predetermined date and with an agreement to pay interest in exchange for using the money [2]. Debt capital can be difficult to acquire for startups that are at the beginning of their journey because it would require proven track record of success. However, the upside of getting debt capital rather than equity capital is that it doesn’t force the business to forfeit ownership.

Regardless of what type of funding a startup seeks, as founder, you need to get the fundamentals of your pitch right before attending investor meetings. In conversations with both Tania Ngima — CEO of Demo Ventures — and Jason Musyoka — Angel Investors Manager from Viktoria Ventures, presented below are common mistakes that make investors shudder:

1.Presenting a back-of-a-napkin idea

Ideas drawn at the back of a napkin look cool. But without market implementation, they make better napkins than business pitches. An idea must be validated on the ground before any attempt is made to grab an investor’s attention. While startups don’t need to have broken even yet, they need to show proof-of-concept by being revenue positive and having a base of paying customers. However, if market validation is what you’re looking for, the avenues for these are ‘award-type’ competitions and grant funding. Crowdfunding could also possibly help you to go from idea to product/service validation.

2. Helter-skelter Financial Records

It is common for startup founders to get so caught up in the trenches of their day-to-day operations, that they don’t keep their accounts in order. Showing up for investor meetings without supporting documents such as a business plan and financial records is such a rookie mistake, it makes you look like you were lost and had stumbled into the wrong room.

Investors need to see a clear path on how they’re going to make their money back. A business plan answers questions on how the business is planning to stay on track while scaling while financial records show a summary of the startup’s financial health, covering details on assets, liabilities, cash flow, and more.

Investors also know that, in many cases, projections and business plans are likely to change over time. These documents are useful in gauging your thought process as an entrepreneur (including how you think through assumptions, contingency plans, changes in the external regulatory or market environment) as well as how ambitious you are.

3. Competition? What Competition?

Sadly enough, startup founders are divided into two camps — those who obsess over their competitors that they don’t get much work done, and those who go through life pretending they don’t exist.

While stalker tendencies like putting google alerts on your competitors is not recommended, knowing they exist is important. More important is identifying what your positioning is compared to them, and what makes you unique and sets you apart.

4. Crazy valuation — a unicorn, anyone?

The valuation that you show up with need to be backed up by the numbers in your financial records. Unfortunately, what has become common is for African founders to base their valuation on the target market or the latest valuation of a similar startup they saw on Shark Tank.

Others value their startups by multiplying their annual revenue by numbers that are not very reasonable — like 15x. While valuations based on revenue multiples are more of a subjective science rather than an exact one, factors to be considered are risk, growth and profitability [3,4]. Risk has a negative correlation with revenue multiple whereas growth and profitability have positive correlations. From his experience, Mr. Musyoka puts a 5x revenue multiple as being average in this market.

Co-written with Amina Islam

References:

[1]https://www.accountingtools.com/articles/what-is-equity-capital.html

[2]https://www.thebalance.com/the-three-primary-types-of-financial-capital-357332

[3]https://moronesanalytics.com/develop-your-intuition-about-valuation-multiples/

[4]https://exitadviser.com/business-value.aspx?id=business-valuation-methods

 

 

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Frame Your Product As a Painkiller Not a Vitamin

pill, capsule, medicine

Frame Your Product As a Painkiller Not a Vitamin

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Pain is a powerful motivator.

It drives people to do anything in their power to stop it.

Now.

It’s very good to understand this while framing your product for sale because in some cases you need your potential customer to view it as a painkiller rather than a vitamin. It comes as no surprise that due to the complex and challenging nature of the market, customers’ expectations are rising. It’s getting harder to do business nowadays, and rise above the noise to convince customers to part with their hard-earned cash.

So when you frame your product like a vitamin that is nice to have and might get your customers benefits in the long term, you are more likely to face more rejections because they don’t find the delayed gratification enough reason for immediate purchase. However, when your product addresses short-term pains, then your probability of closing more sales increases.

For some products, the classification between painkillers and vitamins is easy. For example, productivity tools, and content aggregators tend to fall under the vitamin category, while products that help you satisfy a regulatory requirement or win sales.

However, if you’re unsure, how do you even know if the product you’re trying to sell is a painkiller or a vitamin?

  • Measure the length of your sales cycle — people and businesses with real pain push for short sales cycles
  • Take note of how your customer acquisition metrics. When you get more customers through referrals and inbound leads rather than outbound leads, chances are high you’re in the painkiller business.

But just because you see your product as a vitamin doesn’t mean that the customer shares that perspective. If you talk to enough customers and listen to them, you might realize there’s a pain your product is relieving you might not even be aware of. And listening to your customers doesn’t need to happen in person, but could be done by gathering stories around your product through customer service channels, and on social media.

Another thing to understand while selling is how context always matters when it comes to making a purchase. Sometimes how one product is perceived would depend solely on your customer, their needs and problems. Some might view your product as a vitamin while others might view it as a painkiller. To understand the context, you’ll need to do in-depth interviews with your current customers to understand a few basic things. For B2C customers, you would need clarity on what was happening for them to purchase your product? How does it tie in with any personal goals they might have? For B2B customers, how was the business performing, what was happening around them to make them reach out to your product?

This makes it necessary to have a clear understanding of who your user is, or defining your user profile, which is why there needs to be continuous alignment between sales and marketing departments. Some of the activities the two departments would need to align on are:

  • Persona Profile Development: Persona profile is a detailed description of your target customer, capturing everything from demographic information to hobbies, values, fears, goals, and challenges.
  • Brand Positioning and Messaging: Understanding how your brand is perceived internally and externally is crucial for your organization. Sales teams can help marketing teams identify gaps in brand consistency, and together they can address a plan to improve them.

But what if your product is a vitamin that can’t be framed into a painkiller in any way? There are some sales strategies you could use:

  • Talk money: At the end of the day, if you can make a case about how your product increases revenue or reduces cost, clients will be more willing to be sold on it.
  • Build Credibility: This is done through testimonials, case studies with real clients, focusing on the impact of your product. Because the timeline between the purchase and the value might be more extended for vitamins, the more real-life examples of the ‘ultimate’ value — even if delayed — would need to be communicated, for the clients to be able to make a decision now.

Last but not least, remember that sales is a numbers game. No sales call goes to waste. Even rejections can be seen as good market research as even if you do not close a deal with a lead, you still gain enough by listening to them to understand their perception of your product.

Co-written with Amina Islam

 

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Are You A Visionary Sales Leader

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Are You A Visionary Sales Leader

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In a world where the majority of people have become salespeople, it takes more than a title to be a sales leader, especially a visionary one.

And no, multiple years of experience selling does not cut it. Neither does marshalling the operations of a sales team.

Visionary sales leaders stand out, not only by what they do but also how they do it and why. Visionary leadership combines the two skills of seeing the potential for change with the ability to lead others to cause that change. Visionary leaders share the following traits:

They operate on a pull strategy rather than a push one. For instance, rather than push their product down their potential client’s throat, they pull them to buy it by inspiring a vision of how it could improve their life.

They also pull the best out of their team members by communicating the why of what they’re selling rather than its what only. For example, a visionary leader would explain to their team why they should be hitting their sales targets, and would also ensure that outcomes are tied to intrinsic motivation. By contrast, a typical sales manager would most likely use extrinsic methods of motivation, enforcing and reinforcing the carrot-and-stick approach.

They neither bark down commands nor micromanage. Instead, they know how to properly delegate. As a leader, your job is to set expectations and empower your team with the skills and knowledge they need to do their job well. Then you must give them autonomy and get out of their way. More importantly, every employee needs to feel like they’re part of the bigger vision, regardless of their position.

The best way I’ve witnessed that was in a company that made its sales target visible at the front office, and even the receptionist could explain to a visitor what that target’s achievement meant to the company. This made sure that everyone understood the value the company provided, and could potentially go out, and bring in more clients.

They know that selling is about building valuable, meaningful and trusted long-term relationships rather than short-term transactional ones. Imagine coming to the realization that you don’t have the capacity to deliver to a client according to their specifications, and referring them to a competitor with the capacity. The client would appreciate that you made a decision that was good for them even if it jeopardizes your position in the short-term.

Building relationships with their sales team is also important, as they nurture the relationship over a long period of time through continuous training and mentoring, leading to team chemistry and loyalty. This is in contrast with continuously recruiting market champions who come with great experience and contacts, but ask for a very high salary scale and are in many cases, less loyal.

Their mantra is ‘Value, value, value.’ They build sales strategies based on the exchange of value with clients. They also live coherently with personal values such as integrity and honesty.

They listen, patiently, to everyone. They listen to their team to understand the challenges they’re facing, and rather than criticize, they opt to give constructive feedback on their work. They also listen to their clients to get feedback on what they’re selling. They listen to the market to see where it’s going and if they need to pivot their product or service, or reframe the message they use to sell it.

They drop their ego, and let others shine. They don’t try to take credit for everyone’s work. They also keep track of their team’s progress, and hold them accountable to their goals, by keeping the lines of communication open.

This also means giving their team enough freedom to make mistakes, without fearing repercussions. This is done by building a culture where failing forward is allowed, and mistakes are dissected and distilled openly to understand the lessons learnt.

Last but not all, they tolerate risks because visionary leadership is about change…changing lives, changing sales metrics, changing the business, and change is never risk-free.

So how many of your traits describe you?

Leave your comments below.

Co-written with Amina Islam

 

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The Downsides of an Overly Optimistic Entrepreneur

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The Downsides of an Overly Optimistic Entrepreneur

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The strength of a visionary entrepreneur is their ability to see something in their mind and bring it to life in the real world. The problem is that sometimes, they can become excessively overoptimistic that it could lead to their business’s failure.

Before I launch into my opinions on that, let me first state that I’m definitely not against optimism per se. In fact, if you’ve been following my posts, I’ve often written about the importance of optimism when it comes to running your own business or working in a sales career, as it takes optimism to build resilience in the face of multiple obstacles. It takes optimism to build self-discipline and charge forward even when you don’t feel like it.

In fact, according to research conducted by psychologist Martin Seligman, optimistic people tend to see negative events as temporary, limited in scope, and caused by external factors, which is the exact mindset you need to beat the odds of succeeding at building a great business. Optimism has also been shown to be a great stimulant for creativity as optimistic individuals feel that the environment is safe so they are more likely to seek novelty and experiment with ideas.

However, too much of it can be your kryptonite.

Why?

Being excessively overoptimistic makes you continuously underestimate risk. For example, you might underestimate the amount of time and money a project would take, and thus fail to sufficiently plan for it.

Being overly optimistic can also give your employees the impression you’re walking around with blinders on, as you excitedly exaggerate growth metrics, while hiding other elements of the truth that show there might be a problem within the company. Without admitting the company’s problems, you’re denying yourself and your team the opportunity to solve them.

Also, you cannot just visualize your way to success in business.

Rhonda Byrne’s book The Secret brought with it people who’ve become obsessed with the ‘law of attraction’. They spend a lot of time visualizing, and visualizing some more, without actually doing anything to achieve what they’re trying to achieve.

The entrepreneur’s version of this is going from one conference to another telling the company’s story rather than doing the work.

“You must change reality, not just wish it away.” — Shawn Achor

Shawn Achor, known for his books on positive psychology, distinguishes between an irrational optimist and a rational one. While the former has a warped vision of reality that is grounded in desire, the latter believes that mindset does matter, but they also recognize that reality is part of the formula.

So what can you do to make sure you’re optimistic enough to run your company, without being too optimistic to run it into the ground?

Use Metrics. Numbers don’t lie. Though it is encouraged to be enthusiastic and passionate about your business, you have to use a set of consistent measurements tracked over time to gauge how the company is performing, and make decisions based off of that. The numbers will tell you whether you need to put in place strategies for growth, pivoting or failing.

Have an executive board that keeps you in check. Surround yourself with people who challenge you rather than agree with everything you say. Such people will help you stay accountable and grounded in reality.

In summary, while it is important to be optimistic as an entrepreneur, it’s also important to know when you’re becoming overoptimistic, leading your business towards derailment — and possible demise.

Last but not least, Jim Collins summarizes it best in Good to Great, “You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”

 

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Cash remains king as Kenyan SME’s deal with Covid-19

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Cash remains king as Kenyan SME’s deal with Covid-19

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When the clock announced the arrival of 2020, I was very optimistic. After a few years of iteration, I could finally articulate my value proposition as a sales consultant and had 2 running contracts get extended, and 3 additional projects added to my plate. I anticipated winning 4 more projects by September 2020, and that would have put me at the same net revenue levels as I had when I was running a marketing consultancy 7 years ago.

But then the coronavirus pandemic brought the world to a grinding halt, infecting at least 600,000 people (and counting), crashing economies, breaking healthcare systems, and disrupting modern society on an unprecedented scale. As countries are going into lockdowns and curfews are put into place, people are told to stay home, practice social distancing and avoid congregations to slow down the spread of this pandemic.

Just like many Kenyan entrepreneurs, I immediately felt the impact of this virus on our economy. Only 2 weeks since the first case of Corona was announced in Kenya, and I am back to only 2 projects with the 3 new projects suspended. And if the pandemic continues, those 2 running projects would also fold.

My experience is not unique. I recently talked to 6 entrepreneurs running businesses in the IT and tech sector in Kenya, and the reports have been grim. One entrepreneur in hardware and maintenance had her contract suspended. Projects that require the physical presence of staff have been suspended, and 3 of the entrepreneurs have been negatively impacted by supply chain disruptions. The entrepreneurs are yet to decide on how to handle their employees, and none has developed a detailed restructuring plan to guide their businesses in this uncertain period.

According to UN estimates, African countries have so far lost an estimated $29 billion to the coronavirus economic disruption, despite reporting the very first continental case in Egypt only Feb 14, 2020.

In other words, compared to other countries, we are still at the first stages.

The suddenness with which the Covid-19 pandemic has come and the consequent prevalent fear and anxiety means that as an entrepreneur, you need to be agile to survive this. I believe that business planning during a time like this revolves around one major theme; cash is king.

Given that it is highly unlikely we’ll have any financial assistance from our government in the form of an economic stimulus, any short-term plans for your business should be based on the following cash-related scenarios:

  • Take stock of how much cash you’re holding in your bank account that is at your disposal.
  • Collect cash from debtors that have made commitments to pay in the current economic climate and have historically come through.
  • Identify new sources of income: these could be projects you can complete under the current working conditions of remote working and lean staffing, and you have a guarantee that clients would pay you despite the uncertain economic conditions.

The 6 entrepreneurs had voiced their concern that healthy cash flow was going to be their biggest challenge though with so much uncertainty about the future in the air. In my next article, I’ll share how you can plan your next 3–6 months using the projected cash to keep yourself and your business above water.

 

 

 

 

 

 

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You Need To Build Your Skills to Grow Your Business

You Need To Build Your Skills to Grow Your Business

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“My focus right now is business growth and not skills development.”

It is a statement I often hear when I’m talking to entrepreneurs, which makes me wonder, how can business growth go without skills development? Shouldn’t the two go hand-in-hand?

I’ve always believed that if you were to grow your business organically through selling directly to clients, it is important to master several vital skills, among them:

  • Strategic thinking and planning: This is the process of crafting the direction you want your business to go within a three-to-five-year framework.
  • Team building and management skills: Unless you are a Solopreneur, it’s very hard to attain operational excellence without a team to deliver your product/service.
  • Customer service skills: You need to ensure your customer’s expectations are met and they are kept happy. It would be really hard to grow a business if you keep on losing customers at the same rate you’re acquiring them.
  • Financial Management skills: Cash flow is the life-blood of all growing businesses and is the primary indicator of business health.

These are a diverse set of skills that you would need to master through experience as well as business courses such as the Advanced Entrepreneurship Program(AEP) by ISBI at Strathmore Business School.

 

 

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We Need to Do More to Support MSMEs

We Need to Do More to Support MSMEs

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Over 70% of all jobs created in most economies are in the Micro, small and medium enterprises category and if you consider emerging economies like Kenya, this figure jumps to over 80% according to a report by the International Trade Centre titled Promoting SME Competitiveness in Kenya.

This translates to 8 out of every 10 jobs.

In addition to job creation, MSMEs also contribute to sustainable development, in terms of contributions to economic growth, provision of public goods and services, as well as the reduction of both poverty and wealth inequality. How can we ensure that this segment of the economy survives the current pandemic and continues to drive our economy?

Back in 2008, as a small three-year-old independent advertising agency trying to grow, I nearly lost out on a major advertising project because I had approached the procurement department of one of the big corporations in Kenya to sign some documents confirming they would make payment to a specific bank account to support an invoice discounting facility I was applying for to enable me to do the project. His argument was that if I couldn’t afford to finance the project then I didn’t qualify to be a vendor for that organization. This is despite the fact that I had already won a major pitch against bigger agencies which meant I was technically capable of getting the job done.

This bias against MSME’s is just one example of the multiple barriers that small businesses in Kenya and possibly the rest of Africa face while trying to grow their businesses. As we mark this MSME day during an unprecedented time, let’s work together to develop and put forward practices and policies in our country that support the growth of more small businesses.

MSMEs not only matter but are the future of our economy.

 

 

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