[Column] Bob Koigi: Business incubation, the saving grace for struggling entrepreneurs
Small businesses require professional business advice. Entrepreneurs with business ideas but no way of taking them through to fruition need sound advice. Business incubation is an emerging and promising venture which is combining all these and has been credited with some of entrepreneurs’’ success stories across East Africa.
Take the example of Jamleck Othieno who for the last five years has been sitting on a business idea of starting a catering outfit. He has harboured endless ideas on flooring the cut throat competition that is in the industry, but as the ideas flood his mind so does questions about source of finance for his business, how to remain afloat in case the business takes a dip, where to source for clients among other business worries.
Lucky for him he recently got picked by a business incubation centre at Kenyatta University and is now undergoing training on business management with a view to assisting him sustainably manage his business including transforming it into a strong and viable company.
Business incubation as a concept is hinged on the fact that since starting up a small business can be such a challenge for most, it is necessary to help nurture young companies those first few months or years until they have established themselves firmly in the community. An incubator therefore is the person who would nurture the likes of Jamleck Othieno into realizing their full business potential.
The new entrepreneur can look to the incubator for hands-on management assistance, education, information, technical and vital business support services, networking resources, financial advice as well as advice on where to go to seek financial assistance.
The goal of an incubator is not only to ensure the small business survives the start-up period where they are most vulnerable, but to produce confident, successful graduates that are well grounded financially and secure in their knowledge of how to run a productive business independently, within two or three years of start-up. On the average ninety-five percent of an incubator’s clients graduate, and eighty-seven percent of incubator graduates remain in business.
The resulting community benefits of an incubator are healthy companies, accelerated job growth and a significant return on investment for each economic development dollar spent.
The entrepreneurs emerging from the incubators often prove to be on the leading edge of developing new and innovative technologies, that are affecting society increasingly as they grow, with their quality of products and services.
The incubator encourages clients to select a variety of small business to be viable and meet the varied needs of the community, including technology, service, manufacturing, empowerment, specialized and mixed uses and so on.
The East African region has enjoyed a burgeoning number of business incubation programmes that have gone ahead to assist leading enterpreneurs build successful businesses. Jerome Mapunda from Tanzania was in the news recently as a poster boy of the successes of incubation programme in the country. Three years ago he got into a training that transformed his idea into financing and a thriving taxi business“It involved me going through one on one training with successful entrepreneurs, doing mock exams on the kind of business I wanted, attending lecturers by gurus in the trade and even getting some money to actually run a mock business for three months and see how it works. It changed my whole perspective on business,”he said in the TV interview with a regional station.
He now boasts of a fleet of 20 taxis from an initial five, and has now employed about 50 people to manage his business.
With a growing number of ideas across East Africa, with no way to actualize them, what with the government red tape and the untenable financial service providers’ requirements, the incubation centres have positioned themselves as the saving grace of struggling entrepreneurs.
Multiple award winning Kenyan journalist Bob Koigi is Chief Editor East Africa at Africa Business Communities
