This archive report was first published on 23 August 2019.
On August 23, 2019, the economic landscape in Kenya was marked by uncertainty, with large companies laying off staff. However, for small and medium-sized enterprises (SMEs), struggle is a daily reality.
While every entrepreneur aspires to grow their business, this doesn't necessarily mean expanding headcount and increasing overheads. In fact, this can lead to unsustainable costs and rob the business of much-needed agility.
Just like railways are built along the shortest and most direct route, scalable systems are essential for SMEs to grow revenue with minimal resources. By adopting this approach, SMEs can focus on increasing connections with customers and exploring cost-effective ways to reach new markets.
For instance, an entrepreneur selling second-hand clothes in Gikomba market can leverage social media to reach new customers and update current ones about new stock. Similarly, an SME can avoid unnecessary overheads like prime locations and 'professional' staff, focusing instead on providing value and treating customers with respect.
Outsourcing non-core functions to external entities with comparative advantages, such as accounting, logistics, and marketing, can also help SMEs manage costs and increase revenue. By partnering with experts, SMEs can focus on their core business and achieve growth through strategic cost management.
As seen in the example of a tailor making designer clothes in downtown Nairobi, outsourcing manufacturing to tailors in Jericho and Uhuru markets, listing products on e-commerce platforms like Jumia, and relying on good logistics companies for delivery can lead to company growth based on revenue increase and strategic cost management.
