If you speak to a small business owner in Kenya about their work, one thing you’ll definitely hear is a complaint about low sales. This is because business revenue is what drives these businesses.
Small businesses in Kenya rely a lot on retained profits for funding investments. The major financial institutions are too comfortable buying Government securities, rather than pursue MSMEs in the country.
That said, entrepreneurs have to take some blame for enduring little business revenue. This goes back to failure to draw up and live by a strategy. In this case, a strategy for sales or revenue.
In the pursuit to make money, you will find that many small business owners focus on the tactics of closing the sale when the customer is in front of them. This makes sense considering our haggling culture. But it makes more sense to have a sense of direction than operate in this hit-or-miss manner.
If your business is facing the problem of low sales, you are better off finding out what it is that drives business revenue in your field of work. Yes, you want more money but what generates that?
You can then emphasize on the factors that influence business revenue the most. Here’s a list with 10 factors that drive revenue to help you narrow in on what is most important in your industry and business. Perhaps you’ve been doing good work on the wrong thing:
1. Adverts
You may find that advertising is the biggest deal in your business after you do your market analysis, again. This would mean that you focus on getting more out of promoting your products and services. Are you aggressive enough? Do you use the right channels? Are you willing to spend money to promote your products?
2. Salespersons
Those who live in the future by embracing public transport in Nairobi will tell you of the many salespersons they’ve turned down and denied commission. They try to close the deal. In some businesses they need to generate leads. If salespersons are the key, for you, then you must be willing to invest in training them. Giving them stuff to take out there or sending them to events is not enough.
3. Supply chain
You may find that you need to source products right. Is your supplier too expensive? Unreliable? Are you handling products right? You don’t want issues like employee theft, damage or wastage to be costing you profit. For instance, if you deal with vegetables or fruits you’ll find that handling and storing them right can make them last a little bit longer. This reflects on your business revenue.
4. Referrals
You’re not a true small business owner if referrals are not important to you. This is nice way to increase your customer base. If you find that a referral is the most important thing in your industry, start finding out reasons people refer you so that you can focus on those strong points.
5. Location
“A good business in a bad location is a bad business.” Good location can be a substitute for innovation, as hawkers in Nairobi prove to us daily. So, if you can move, do that. If not, maybe you’re located a floor higher, work towards creating other advantages that can bring customers to you.
6. Price
Price also stands for quality of product. It’s killing two birds with one stone. If price is the most important thing you must describe your prospective customer again. Maybe your price has been too much for him or her all this time. Maybe your price is too low and that is why business revenue is low – go work on your break-even again.
7. Purchase volume
You have to feel bad for supermarkets in Kenya. It’s a fact that Kenyans basically do a ‘monthly shopping’ but they still have to incur all that operating cost. Even if I go there to buy just the one soda. Have you found that you need your typical customer buying more? Can you make them do that or do you need to target a higher income market segment?
8. Customer retention
In some small businesses, customer retention is queen. Especially, if you are offering a service. If this describes your situation, you may have to dial down on seeking new customers and try to squeeze more juice from the ones you have. Be satisfies with what you have, haha.
9. Customer service
This is related to point 8 but they are different things. You can give great customer service to people who won’t be repeat customers. But if customer service is the point of differentiation in your industry, you have to do to it well. Pamper us, customers, some more. One thing small business owners fail to do is train their employees on this – they believe employing “nice” personalities is enough.
10. Cost control
Some entrepreneurs in Kenya may be operating in industries where it is more important to cut down on cost to increase business revenue, and they don’t know it. Is your variable cost or overheads unbelievably high? This may be a hint. You may have been pushing for more sales but along with costs. It’s time to reduce your expenses.