I’m certain that day-to-day processes make up a huge portion of what worries you running your business. This is normal. Small businesses are operational in nature.
Unfortunately, and I hope this is not you, this concern leads to many entrepreneurs in Kenya focusing on survival instead of growth. A survival mentality means always looking at the rear view mirror. Do you think this works? It may – may – save you from collapse of your business. But it’s not going to lead you to Canaan.
As a woman entrepreneur, you know better than anyone else how important it is for women-owned businesses in Kenya shift their focus from survival to growth. At the moment, businesses owned by men in the country enjoy close to double the speed of business growth.
This growth focus, you and other Kenyan women need, is captured by revenue – how much revenue you make, and how much you want to make.
Is there an easy way to increase revenue?
One mistake many women in Kenya make, again I hope this is not you, is that they see revenue as an end in itself. Revenue is only part of the process of getting to profit.
Julia Pimsleur is a woman who has made it her business to help women entrepreneurs get to sh.100 million ($1 million) in revenue. She advises youto, heed what I just wrote, and have a holistic understanding of business processes – in our case, to understand where revenue stands in business activity.
You must appreciate more how your other activities relate to revenue. If you genuinely have no idea, you must begin to change your thinking about revenue.
‘Piles of cash’
Revenue is about making sales, no? Every woman entrepreneur in Kenya knows that the quickest way to increase revenue is by getting rid of inventory. But many do not have written-down inventory management mechanisms in place.
You must think of inventory as “piles of cash” for this to happen. In any case, inventory is a current assetthat you can use to get short-term financing.
Do you keep too much stock in times of low sales? Or are you afraid of overstocking so you find yourself under-stocked in times where there is increased demand? Have you considered that employees could be stealing from you only because you encourage wastefulness? Maybe sometimes you shrug off loss of items.
These are some of the questions you’ll be answering by having in place an inventory management system. It’s a step to enjoying more revenue.
You must extend this mentality to marketing. Small business owners are really cool people. They are always willing to try their hand at new things; more so marketing. I mean, who doesn’t want to go viral or trend for an entire day?
One problem. All these cool women entrepreneurs miss the target when they make marketing about brand building instead of seeking increased revenue. Do you know that there’s no such thing as brand? I’ll break it down for you soon enough, if you want.
A Kenyan business used only Facebook as a medium to expand into export markets. How? The entrepreneur realized that, for a small business, marketing is about capturing markets. And that must be put down in specific numbers. By how much should this marketing campaign increase your sales?
Good decisions = more revenue
You must also not forget the role of good decisions in increasing your revenue. And this means every single decision – butterfly effect? Decision-making comes up, quite a few times, as an entrepreneurial competency that Kenyan women lack in. Usually because many women are forced to put into consideration extra-business factors when making a choice. “Will my partner agree to this? “How will this affect my children?”
The best way to refine your decision-making is by getting your hands on more information. Don’t stop at your accounting records. Seek to learn trends on your customers, suppliers and your competitors.
This helps you out down clear benchmarks so you don’t run away from failure. Instead, you go, “okay, this is where I went wrong and this is exactly what I need to do to improve.”
Revenue is important for your small businesses. You can survive without profit for a while but this is a big deal. It shows how sustainable your business is in terms of working capital. For an investor, a bank or a SACCO, this indicates whether they can trust what you’re telling them.