Most Profitable SMEs in Kenya: Although the annual ranking of SMEs in the Top 100 Survey requires firms to meet a basic threshold of recording an annual turnover of between Sh. 70 million and Sh. 1 billion, they all start small. We sampled some of the survey’s previous winners and their long journeys in starting a business in Kenya.
Ahmed Bella, Avtech Systems
At Avtech Systems, passion, determination, good working relationships and focus has been the ink that has written the system integration company’s success.
Avtech Systems was started from scratch by Ahmed Ben Bella, one of its three co-owners. He saved Sh500,000 and began renting projectors.
At one point, Bella realized that he needed to bring in business partners. “I realized that I couldn’t go far alone, and needed to form partnership that would result in higher returns,” he says.
His partners brought in the financial and technological expertise he was lacking. Today, the venture is a limited liability company making between Sh500 million and Sh1 billion per year. The firm has also doubled its customer base.
“You have to start somewhere. Start small and then build your capital up by moving your stock or services. Step-by-step is a concept that small entrepreneurs ought to adopt,” says Bella.
Dinesh Tembhekar, Lean Energy Solutions
Lean Energy Solutions was conceived in a bedroom and struggled for two years before turning a profit. In the first four months, the startup faced its biggest survival test — suffering straight losses. The business was servicing a Sh21.2 million loan secured as seed capital.
“I would expect to realise a profit of Sh20 million only to record Sh2 million profit which was negative given the amount of investment,” says Mr Dinesh Tembhekar.
“However, from 2009 when it made Sh7 million profit, the company has grown every year. In 2010, we grew by 85 per cent, 65 per cent in 2011, and 40 per cent in 2012,” he adds.
Lean Energy Solutions uses sugarcane remains to power boilers in factories that produce fast-moving consumer goods.
“We compact the bagasse into flammable blocks that cost less and have a lower carbon footprint compared to diesel,” said Mr Dinesh Tembhekar, the founder and managing director of Lean Energy Solutions.
The success of his company, he says, has been from its ability to offer triple benefits with clean technology that is much cheaper compared to fossil fuel. Some of the prominent clients for his company include Coca-Cola and Spin Knit Dairy Limited.
According to Mr. Dinesh Tembhekar, the rising demand for cheap, efficient green technology by manufacturers has been the backbone of his firm’s success. The company has been posting 35 per cent growth per year on average.
Dennis Makori, Onfon Media
Onfon Media offers bulk SMS services such as mobile phone ringtones, love quotes, Bible and inspirational quotes, has been recording Sh400 million in annual turnover.
The firm is projecting Sh1 billion in yearly returns by the end of 2015. But this has not always been the case. Onfon Media made Sh44,000 profit in its first contract in 2007 out of a Sh1 million operating capital. However, in the following year, it made its first million in profit.
Mr Dennis Makori, a co-founder explains that the firm’s success has been in its ability to come up with new strategies: “There are 50 competing firms and to stay ahead, we have to keep innovating,” says Mr Makori. Most Profitable SMEs in Kenya.
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