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Thursday, February 27, 2020

Survival tips for your small business in a tough economy

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SME in Kenya: Recent news of large legacy companies laying off staff in Kenya has been the talk of town in Kenya. Struggle for these large companies due to harsh economic times may come to them as a surprise but to a typical SME struggle is their daily bread.

Although it’s the aspiration of every entrepreneur to grow their business, it doesn’t need to translate to more head count and bigger working space leading to unsustainable overheads and robbing the business of much needed agility.

Railways are built following the shortest and most direct route; this is the same concept as scalable systems. SMEs must therefore explore avenues of growing revenue with the least and most economic resources available at their disposal.

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For starters, SMEs must strive to increase their connections with current and potential customers from one to one to one to many. For example an entrepreneur   selling second hand clothes in Gikomba market relying on walk in customers can exploit social media to reach new customers and update current ones of new stock.

Similarly an SME in Kenya need not incur unnecessary overheads such as locating themselves in prime areas in order to reach customers or hire ‘’professionals’’ in order to look serious and fit the bill; customers are simply looking for value and be treated with respect period. This means a business be located at a cheap premise leading to fair prices products and services hence ability to attract more customers based on pricing alone if not more.

Finally SME can explore outsourcing non core functions to qualified external entities possessing comparative advantage such as accounting, logistics, HR, Manufacturing, marketing and payment gateways among others

For instance a tailor making designer clothes in downtown Nairobi can outsource; manufacturing to tailors in Jericho and Uhuru markets, list products on an ecommerce platform such as Jumia or OLX among others in addition to their own social media, receive customer payment through ecommerce platform or independent payment gateway giving customers payment options and relying on a good logistics company for delivery of customer orders. The net effect is company growth based on revenue increase and strategic cost management.

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