Startups In Struggling Economies

How much longer will you and I be happy with the status quo that exists. We have had conversations that make it okay for Kenyans to be just okay with the current financial crunch the country is going into.  Worse still the same government is encouraging youth to open up businesses as they will be providing the right economic environments for the successes of the said business start ups. Months before the elections politicians came up with economic blueprints which at the moment, these prints have now been abandoned as implementation is a task. So Sad! This to me is the same status quo that over the past 100 years continues to put you and I as African people at the recipients of all forces shaping the global business and economic state. As a country, we ought to wake up and realize we are the larger market for some of the western products and today’s government should play a role to support startups to grow into  reputable businesses serving the world’s market not consuming the world’s produce when we can be a major player. Before  I get started with the leadership and the micro/macro financial decisions they make and how they will affect our businesses, let’s first talk about small businesses in our micro-economic society.

The current conversation about starting a business is that we are okay with a lot of things like,  “just start a business”, “start from somewhere”, “start anyway”. This is a problem with many start ups, its trial and errors sometimes and today allow me to tell you the lies  we as a country should move away from when dealing with starting up!. Yes Start-Ups..How do you know you’re a setup!  So if you have the value of the business you are a start up, if the customer can not trade with you in Business Without You Being inclusive you are then a start up.  We have had the political class inspire us to try and be self employed but we are sometimes fed lies that we can make ends meet either way.  I have looked into major lies and allow me to share this in your spaces so that as you plan to engage startups  or  start your own businesses, you avoid falling into the same web. This will help you start strong and continuously ask yourself the improvement questions to keep you and your business on a healthy path as you grow to meet the global market needs. Yes, global due to the fact that some global decisions really affect country operations, let’s think of our businesses as global.

The first lie is that small businesses need no infrastructure! I believe that as a small business, you need infrastructure, especially those that can connect you to more markets. Most start ups I  have seen feel that it’s not necessary but then deep down if you follow the operations of those businesses, what you will realize is that there are people running multiple functional lines and they struggle to execute basic operations decisions due to being overwhelmed. 

The second lie is that we need no huge Capital. This is a must and for the Kenyan government, the point is that the money doesn’t have to be cheap but it does have to be patient. The idea of putting people on a financial blacklist for failed payments because of small amounts like 300 bob is wrong, we are limiting them from accessing credit. My way of dealing with this will be to assess the duration of unpaid loans before deciding that we are blacklisting them. Say 1 year of  non-updated payment to the current loans, review and allow them to get a financing option but on approvals first deduct any existing loans before disbursing the remaining amount to the person accessing the credit.  Credit facilities to be provided through credit reference bureau for defaulters so that compliance in payments can be enhanced.

The other lie is that we need no people management skills, it is a small group and we can manage them well. Be careful trading with the minimal human resources we have since in a struggling economy like Kenya, talent gets exposed way easily to other well performing economies and there is muscle to convince shift allegiance.   This is what happens to most top talents in Africa. They leave for Western Europe and their allies. I have observed a lot of great talents living to work  in other continents, doctores, engineers and scientists due to how they are being treated . Likewise in a microeconomy, let’s understand how to deal with top talent we acquire if we are looking to grow past start ups. “People” are deal breakers in every startup, maintaining a great talent will help you in a struggling economy.

Let’s  now get back to the government and its policy, Kenya is at a bad place at the moment. Under this governance, if not careful, youth in Business will struggle.  The government has been talking  huge on improving the livelihoods of the common mama mboga and boda boda and the provisions of jobs to young people who are the majority in the country, but truth be told they are doing so little to peddle the narrative. I have a view on this as  JMS, first as a country, could we establish a venture capital fund that encompasses a whole business environment ecosystem (Business advisory and enterprise development, mapping them with procurement needs of businesses and  then capital Funding to propel startup and growth). Hustlers fund in my view is a fraction of the solution needed for the many in need of support. So for most startups, why they fail within the first or second year of their starting is that  they lack the technical know-how of running a business and there is a need to upgrade their skills before they are funded.  Secondly while there is a good program on youth access to government procurement opportunities I think it has been left to the youth to apply and hopefully they getting to start giving the government these services but I feel there’s a lot more mentorship that needs to happen at that particular level before even we offer the services to the government.

© JMS 2023

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