Data from across Africa has revealed that small and medium-sized enterprises (SMEs) are experiencing stifled growth due to a lack of financing, including cash flows issues, and poor marketing knowledge.
Despite SMEs contributing towards 80% of Africa’s economy, both Kenya’s Daily Nation and The Guardian Nigeria cite cash flow as a primary reason for hindered growth, while SME consultants Sage South Africa have identified key areas where business owners can improve operational efficiency by becoming better informed.
While governments have voiced intent to better inform entrepreneurs about business education programmes, and banks should seek to improve investment opportunities, African SMEs can do more to optimise growth.
Using the internet: to learn and to connect
While only 10 percent of Africans have access to the internet, it is the fastest growing infrastructure in the continent, with online advertising expected to earn R71.6 billion in 2018. As more and more Africans connect online, enterprise owners will be able to substantially improve their business knowledge by accessing the wealth of free information via online blogs, podcasts and news sites.
Furthermore, by using easy-to-use website builders, entrepreneurs will be able to quickly and cheaply build a website that is responsive and intuitive to attract customers that have otherwise eluded them due to poor infrastructure in other areas, such as roads or transport.
Internet access will also allow businesses to connect directly with customers on social media sites, where AI provides businesses with feedback about which users are regularly interacting with their content, and can even create marketing material to attract new customers.
For businesses that have already set up online, many are struggling to convert engaging material on social media into business sales. While social media marketing is becoming more lucrative each year, e-mail marketing remains vastly superior, with an ROI of $38 for every $1 spent.
Simple website mailing list add-on's can add manageable and attractive pop-ups to websites, encouraging users to stay updated with the business’ latest deals, while brick-and-mortar stores can encourage customers to share their contact information in exchange for money off purchases.
Machine Learning software
African nations are fast establishing themselves as world leaders in developing AI technologies that make quick work of otherwise tedious and time-consuming tasks.
These applications don’t only serve to improve customer experience and financing, such as automating invoice payments which improve business’ cash flow, but can help utilise big data to provide important insight to improve marketing campaigns and make operations more efficient.
Traditionally, African SMEs have neglected new technology as expensive and complex, but competition between start-ups and established big business is rapidly making these applications more affordable, as well as intuitive as they integrate with social media and popular messaging apps.
With 8 out of 10 African SMEs being under-served financially, pressure must be placed on nations’ governments to do more to help this essential aspect of the continent’s economy. But the more entrepreneurs can start utilising modern technology and best practices, the more they can boost growth and inject capital back into their own business endeavors.