Small and medium-sized enterprises (SMEs) have been urged to prioritize product quality, compliance, proper record-keeping, and strategic partnerships to improve their chances of accessing finance and sustaining business growth.
According to Mace Foods Limited Chief Executive Officer and Founder Margaret Komen, entrepreneurs should assess the risk of the business and learn how to build sustainable businesses that can compete in international markets.
Speaking during a SME Breakfast Meeting organized by Centafrique Limited in Nairobi that brought together key players in the entrepreneurship ecosystem, Ms. Komen said her own entrepreneurial journey had been shaped by risk-taking, beginning with her decision to leave formal employment and venture into the chilli business.
“One of the things that I think has differentiated me is that I am not afraid to take risks. I have taken so many risks to the extent that when I quit employment to start my business, my family was in shock, because who quits business to start “pili pili” business?” she posed.
She said the decision marked the beginning of a business journey characterised by trials, learning, and growth.
Komen advised entrepreneurs to ensure they have a product that is ready for the market before focusing heavily on financing.
“First and foremost, make sure you have the right product, because many people jump into a business; they have a nice idea, but they’ve not refined their product so that the market can readily accept it,” she said.
She urged SMEs to think beyond the domestic market when developing their products and consider whether their goods would meet international market expectations.
“Think like this: if your product was on the shelf in the US, if the product was on the shelf in another country, would it pass the test?” she said.
Komen said entrepreneurs should build their businesses with compliance in mind from the outset, including meeting standards and establishing appropriate systems and processes.
“Setting up your business from the word go should be compliant,” she said. “Compliant in terms of standards, compliant in terms of systems, compliant in terms of everything,” she said.
Komen said compliance and proper documentation are particularly important when SMEs seek financing from financial institutions.
She noted that lenders need to understand the history and performance of a business, making it important for entrepreneurs to maintain accurate records even when their businesses have not yet generated profits.
“Financial institutions want to see your history. No matter how bad your history is, even if you’ve not made any profit, you can record everything that happened,” she said.
She urged entrepreneurs to record all financial transactions, however small, while keeping personal and business finances separate.
According to Komen, failure to establish basic business systems can raise questions among potential financiers and partners.
Komen encouraged SMEs to start with simple record-keeping systems, including spreadsheets, rather than viewing documentation as an expensive undertaking.
“Just start simple; even if it’s an Excel sheet, just put your figures in order, and people will listen to you,” she said.
Ms. Komen also cautioned SMEs against accepting financing or partnerships without carefully assessing the interests and terms of potential investors.
She said entrepreneurs, particularly women entering business, may attract considerable attention from people offering financial or other forms of support but should carefully establish whether prospective partners genuinely add value.
“Be very careful because not everybody that comes into your business means the best for you,” she said.
She advised SMEs to identify suitable partners and financial institutions and to seek professional advice before entering into agreements.
“There’s a lot of money out there, but which money is important for you?” she asked.
Komen said entrepreneurs should protect their businesses while seeking capital and work with trusted experts when evaluating financing options.
She also warned that poorly structured investment arrangements can expose business owners to losing control of their enterprises.
“I have friends and peers who have lost their businesses to venture capitalists because they came into the business, put in the money, and they knew very well this person would not be able to pay, and they took over the business because they saw the idea,” she said.
Komen further encouraged entrepreneurs to participate in networking events, saying business opportunities and knowledge are often gained through business forums.
“Networking exposes entrepreneurs to knowledge, partnerships, and opportunities that may not be available through books, universities, or online platforms,” she said.
She advises SMEs to learn from setbacks and make informed decisions along the way.
Her remarks come as Centafrique Limited intensifies efforts to strengthen links between SMEs and financial institutions, encouraging entrepreneurs to improve their preparedness and understanding of financing options before seeking capital.
The consultancy firm continues to provide business strategy, financial advisory, fundraising, management consulting, and research services to SMSs to promote sustainable growth, economic empowerment, and business transformation across the private and public sectors.
By Ian Chepkuto
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