It is commonly accepted that the drivers of economic growth and long-term sustainability for emerging markets lie in the potential and effective development of the micro, small and medium enterprise sector. Africa has an estimated population of more than 1.3 billion people that’s growing at over 2 per cent annually in most countries. More than 50 per cent of the people in many African countries are aged below 25. This population has a growing need for the services, jobs and economic growth mostly provided by locally based SMEs, yet these enterprises face an array of challenges that far outstretch those of their counterparts in developed countries.
One of the greater challenges however is lack of business training, mentoring and development, which remains a hurdle for SMEs and entrepreneurs in Africa. Addressing the issue has been a priority for governments and regional organizations for several years. A notable example is Capital Strategies Kenya Limited, which runs programmes designed to support the growth and development of micro, small and medium enterprises.
“As a businessman, I fundamentally believe that small businesses are the lifeblood of the African economy. There is need for African business and policy leaders to rally to support SMEs, as only they can provide the jobs needed for Africa’s teeming population,” says Pius Ng’ang’a, the founder and CEO of Capital Strategies Kenya Limited.
It is clear that unlocking Kenya’s growth potential will require sustained investment into its SME sector.
“Imagine the possible impact if training and developments of SMEs in Kenya were on par with countries like the United States where roughly 70 per cent of small businesses report being able to access business training and development services,” says Pius.
“To support enterprises that last, our holistic programme has four core pillars-business training, mentoring, monitoring and evaluation services,” explains the executive whose real passion is to empower entrepreneurs to change livelihoods. “I feel fulfillment when I see entrepreneurs run sustainable and profitable enterprises.”
The firm’s social impact solutions are varied and support entrepreneurs/startups through idea formulation, establishment, execution and growth of their businesses.
Against this background, Capital Strategies has partnered with International Labour Organization (ILO) to run its programme Start and Improve Your Business (SIYB) in the region.
“We are a Partner Organization of the ILO/SIYB Programme. SIYB is currently the leading global business management training programme with a focus on starting and improving business as a strategy for creating more and better employment for young people with a global reach” says the CEO.
The SIYB programme is currently structured into four separate training packages, which are designed to respond to the progressive stages of business development as noted by ILO.
“Generate Your Business Idea (GYB) is intended for people who would like to start a business, and who, through the training, develop a concrete business idea ready for implementation. With studies indicating that close to 70 per cent startup die in their formative years, it is a clear indication that many people rush into business without really validating their business ideas. This programme aims to ensure start-ups thrive,” says Pius.
Start Your Business (SYB) is for potential entrepreneurs who want to start a small business and already have a concrete business idea. The programme is a combination of training, field work and after-training support, and helps participants assess their readiness to start a business and to prepare a business plan and evaluate its viability.
Improve Your Business (IYB) introduces already practicing entrepreneurs to good principles of business management. Its six modules (marketing, costing, buying and stock control, record keeping, planning for your business, and people and productivity) can be taught individually or all combined in a full course.
Expand Your Business (EYB) enables growth-oriented small enterprises to develop a business growth strategy through training interventions.
The SYB and IYB packages also include the SIYB Business Game, a practical simulation tool to help participants understand the realities of starting and running a business within the confines of a classroom. The EYB Business Game simulates an expanding business during training to help participants experience the impact of strategic decisions on their business operations.
“Training plays crucial role in skills and development of entrepreneurs and small businesses. However, creating effective support policies to ensure sustained growth is not limited to training alone but other measures such as mentorship, monitoring and evaluation,” offers Pius.
The firm has robust training programmes that enable entrepreneurs to implement what they have learned in training. “We select a mentor based on the needs of a business. They then work together for a period of six months. A mentor guides a business to fix its business gaps and build on its strengths,” shares the executive adding that, “If a business has gaps in managing or access to finance and record keeping, we hook them up with a mentor with good financial management skills. They work with entrepreneurs to strengthen their record keeping and financial management system. They also guide them on key steps required to access finance to fund their growth.”
The organization later links these businesses with potential financial institution to help them unlock financing. Pius comments that it has been very fulfilling to see entrepreneurs get access to finance to wheel their growth as a result of his firm’s mentorship interventions.
In partnership with the Kenya Climate Innovation Centre, the firm has supported over 150 businesses, in the renewable energy, agri-business and water sectors and some of these firms have gone ahead to win global awards.
The firm also works with organizations to monitor and assess the impact of their projects in Africa. “Every donor funded project requires a baseline survey, project review and impact assessment. This has seen us work with global firms in particular the International Fund for Agriculture Development (IFAD), Government Agencies in Kenya and the East African region among others.”
Its areas of interest include agri-business, renewable energy, financial services, water and sanitation.
Helping African SMEs to flourish is crucial not only for Africa but for the global economy, because it creates a growing middle class with disposable income, in tandem with market opportunities for new investors. “Our ultimate vision is to create awareness on the value of training and business development for SMEs, align SMEs with opportunities in the government’s Big Four Agenda and have a footprint across the continent,” he ends.
Advice to start-ups
- Long-term growth and survival dictates that you focus on a key goal and stay the course.
- You need a key skill-set and/or experience for you to thrive is a certain sector.
- Usually, the test of a business is a paying customer. When customers are not willing to pay for your product or service, you need to rethink your strategy.
- Your numbers need to add up and make sense. Figure out cost of customer acquisition and how many of them you will need to break even.
- What customer pain is your product solving? You need to be clear on your value proposition.
- Identify a unique area that’s uncontested. If you copy someone else idea, you can never be better than him.
- You need a strong team that can embody your mission and vision.