OK...What is AFRI Business Development all about

To illustrate what we do, I’ll start by telling you a short story of one of the SME clients we support in the UK who I’m sure a number of SMEs here can relate to. Dr. Norma Mujuru Mvere is a self employed Expert Witness in the UK. Norma’s specialisation is African immigration research. She uses information she has gathered from her research to provide lawyers and legal advisers in the UK specialised support. She also testifies in court when needed on immigration situations in various African countries. When we first started working with Norma she had been operating for 2 years and had reached a point in her business where although she was getting contracts she was not making a profit. In addition she found herself always working against tight deadlines which she sometimes missed resulting to a job which she had originally enjoyed not bringing her any monetary or job satisfaction. When we were recommended to her she was at the verge of quitting.
On initial interview and discussion we noted that although she had a lot of work coming in, her expenses seemed to be more than her income (I’m sure some SMEs here can relate to that).

On further discussion we were able to assess what was going wrong with Norma’s consultancy. It was obvious that from her book-keeping to her pricing that she needed support. Norma did not maintain all her records properly leading to the income reflected for tax purposes being too high and therefore tax eating up a huge chunk of her income. She did not re-invest what she made in purchasing simple but much needed capital investments (such as scanners, printers, shredders) choosing instead the more expensive route of leasing. Her pricing was not reflective of the amount of time she put in. She quoted very high prices but promised unrealistic delivery times. Although this allowed her to compete on turnaround time, she was unable to deliver reports on time or delivered to her clients low quality work. Some demanded the job be repeated while others opted not to give her repeat business.

From our assessment of her work schedule we noted that if Norma took into consideration all she did when undertaking an assignment which included a lot of book and ground research and allocated more time for it and at the same time removed some unnecessary double work such as re-interviewing immigrants every time she did a report and not recording this for future use, she would be able to earn the same amount but give her clients better quality work.

After some one-on-one business support and training on book-keeping and marketing which included training her on pricing her services and time-plan preparation for her projects Norma was able to re-invent her business and even re-launch her services.

This is a quote from Norma sent us after our work was completed with her:

“Thank you for helping me put proper structures into my business. I can’t express it in words how much I value the business skills and knowledge you have given me and the time you dedicated to understand the needs of my business and train me. It was done at a pace that suited me. Now I enjoy my work, I make a profit and can face each day with confidence.”

Since then we have been in touch with Norma and she is now handling 20% more contracts than she previously did because her referrals have improved significantly. She still has a huge workload but can afford to take time out to market because of better planning. She can allocate more money for marketing because she has invested in capital purchases - saving the money she was spending on leasing and with money freed up from paying less tax due to better book-keeping. She has also hired a part-time assistant who she is comfortably able to pay. She is currently making a profit and enjoying her work.

SIMPLE?

AFRI Business development offers simple, straightforward business advice and training to start-ups and SMEs. It does this through customised business support and training that improves the quality of their output and their profitability. In addition, we support these businesses to enable them to provide better quality products and more efficient services. As a result they are able to provide better quality inputs as suppliers.

We also work with medium sized clients to identify avenues of growth. We have in the past provided business opportunity identification research for companies such as Insolution Limited, Covington & Burling LLP and Norwich City Football Club among others. We have also worked on training programmes together with University of East Anglia.

Towards this end, our services are of three types; Workshops and Trade Briefs, Supply Chain Strengthening and Community Projects geared toward sustainable development.

Workshops and Trade Briefs

AFRI will hold Workshops for SMEs in Kenya. Our workshops will be delivered by skilled professionals who are also entrepreneurs in their own right and can therefore provide not only the theoretical aspect of the training but also practical advice. Our workshops are specifically tailored in a manner that supports start-ups and SMEs such that what they learn today they can implement tomorrow. They vary in length from half day to full day interactive workshops and cover topics such as business planning, sales and marketing, managing money, business legislation, running a business from home, business practice and using IT and the web among others. Our workshops will start on 4th September 2009 and will be held at the British High Commission premises. The cost of the workshops will be affordable to small businesses. This is especially so because we understand financial resources are limited among growing business and our objective is to understand the needs of these businesses and support them.

We will also be holding trade briefs ones a month for more established medium sized companies that want to do business in the UK and the rest of Europe. These briefs will help companies understand international standards of product quality and service delivery. These trade briefings will be held in Nairobi and will be facilitated by our associate consultants from UK who are on a daily basis exposed to doing business in UK and the rest of Europe. They will be in a position to give talks on various topics on international standards of trade.

Supply Chain strengthening

Supply chains which are both responsible and efficient result in business benefits such as reduced costs, improved quality, and more secure long term relationships and therefore provide organisations with a competitive edge.
AFRI’s Business Development Model for cooperates and other large organisations supports strengthening of value chain by building capacity of downstream and upstream suppliers.

Lets take for example a beverage manufacturing company. They have downstream suppliers such as the farmers who grow the tea, coffee and cocoa that the company sales. We will work with the company to identify business areas that their suppliers can be strengthened in which would result to them providing better quality input materials more efficiently. This might involve training or business support, we will work with the beverage manufacturing company to come up with the best solution. The growth and development of these farmers helps local communities, while at the same time, the beverage manufacturing company benefits significantly from a more efficient supply chain, improved quality, product innovations and the marketing opportunities that the relationships with these farmers bring.

With regards to upstream suppliers, lets take for example a bank that loans to small and medium sized companies. You can immediately see that an improvement in business management of the SME’s borrowing from the bank will improve profitability of these businesses and therefore ensure loan remittances are met. This directly benefits the bank.

These are just examples of two industries but all large organisations from all industries can benefit threefold from a strengthening of their suppliers through capacity building. And in doing this, they will contribute to creating sustainable economic opportunities for small entrepreneurs.

Community Development Projects

Various Non-profit and Non-Governmental organisations support communities achieve sustainable economic growth. Entrepreneurship is the single most effective driver of economic development. Developed countries such as the UK and USA grew a major portion of their economy through entrepreneurship. To date, these countries actively support their SMEs as they know that continued economic growth and stability relies to a large extent on the health of a country’s SME sector.

Entrepreneurship in Kenya therefore has to be encouraged and not just with conventional professions but also with professions which have been in the past looked upon as hobbies. This includes artists, painters and musicians. These trades need to be encouraged to incorporate entrepreneurship so as to be supported as business which would in the long term see us build successful businesses in fields where the business owners enjoy what they do. In addition to this entrepreneurship needs to be encouraged even more with farmers who are the backbone of our economy. Simple straightforward business training customised to meet the needs of the farmers needs to be provided.

AFRI will partner with various Non Profit Organisation as well as other associations supporting projects that help create sustainable economic development in communities through entrepreneurship by providing market research that enables them to identify profitable and sustainable projects for the people in the community and preparing customised business management training and support for these projects.

To conclude we would like to note that SMEs have been and continue to be a key economic factor in development in Kenya. According to the Kenya Bureau of Statistics, 2007 report in 2005 50% of new jobs in Kenya were created through SMEs and this percentage has been rising since. The bad news is, three out of five start-ups in Kenya fail within the first few months, this is also according to the Kenya Bureau of Statistics, 2007 report.

Why is this the case? Although many would consider obtaining financing to be the most challenging factor of running a business in Kenya, it actually isn’t! The core challenge is lack of adequate capacity to meet the needs of the business in its current state and also as it grows. With better developed business management skills, SMEs will be in a position to meet head-on the various challenges that arise. For instance many organisation believe that an excessively fast growth is good for business. We saw this when we were working with a small local CPA firm which, because of enhanced marketing and good referrals, experienced exponential growth in a time period of three years. During this period however, no changes were made to the structure of the business to improve efficiency of the processes, no additional staff was recruited to meet the growing needs of the business and no additional resources were purchased to cater for the increased workload. This resulted in both the owners and employees having to put in more and more time and still not be able to match the increasing demands of the business. What followed was missed deadlines, reduced quality of output and inevitably and very high staff turnover. This threatened the continued existence of the business and invariably, the bottom line.

By understanding that controlled growth is essential to a company’s continued existence, the CPA Firm would have saved itself a lot of problems. Business management skills enable start ups and SMEs to Identifying the people to sell to, promotion of their products, actual selling, managing money, managing people, using IT to promote business, identifying opportunities in the market, changing business structure to incorporate changes in the environment among others. These business skills enable companies to operate more effectively thus reduce cost and increase their profitability.

AFRI Business Development is at the forefront of developing SMEs through providing these business skills.