Kenyan small businesses are competitive and resilient. Last year was tough due to political unrest, which had a direct impact on the stock markets, tourism and small businesses.
The Kenya National Bureau of Statistics reports that micro, small and medium businesses contribute an estimated 34 per cent to Kenya’s annual Gross Domestic Product and with most of these businesses being informal, it is important to grow them into larger companies that contribute to job creation and economic growth.
To get it right small business has to balance growth opportunities with the need to smartly manage risk.
Below are several ways to expand your business according to Sage East Africa regional director Nikki Summers:
Reach new customers
Consumers do a lot of research online before buying a product. Most consumers are now online. Develop a mobile-friendly, visually appealing and easy to navigate website and build your presence on social media to engage with existing and potential customers.
Find new markets
Expanding into new markets is one of the fastest ways to scale up. Stock new products, target customers in other towns or neighbouring country or add new services to your offering. With each new market comes new competitors, different customer needs but also unknown threats. Do your research and identify markets with strong demand and weak supply.
Select your A-Team
Investing in a passionate, trustworthy and customer-focused team builds the foundation for a successful business. The right salesperson brings in new business; if you have more work than you can handle, look at expanding your manufacturing team or bringing in more people on board to do billable work.
Plan for success
A business plan forces one to think about the future. But plans should not be rigid or complicated. They should be living documents that can adapt to the changing needs of customers, the environment you operate in and regulatory requirements.
Formalising your company’s structure and processes give management better visibility and control of the organisation’s finances, speeds up paperwork, and helps align everyone in the company behind its values and strategy. It will be good for employee morale because people will feel confident about their purpose and responsibilities.
Manage cash flow
Scaling up will require investment in research, people and marketing – make sure your business can cover this without going insolvent and that you have more cash coming into your business than what is going out.
Some businesses like mini-markets or kibandas are more vulnerable to cash flow problems because they need to purchase stock and pay rents.
Use accounting software to track your income and costs to make sure your expenses stay under control as your business grows. No business is too small to use cloud accounting software – it will benefit the growing business to plan better and have a better sight of cash flowing in and out.