Eco system Approach: Survival mechanism for Micro Small Enterprises amid Covid-19

Coronavirus presents a unique challenge to the business community in Kenya especially micro, small enterprises (MSEs) who constitute a bulk MSMEs in Kenya.

Entrepreneurs running micro and small businesses are usually informal family owned, thinly capitalised, undifferentiated with little to no barriers to entry hence are highly susceptible to any kind of economic shock.

As MSEs just like other businesses in private sector wait to see the form and nature of government support; they must make efforts to cope with the negative effects of coronavirus to their business operations.

A great approach MSEs can test out is adoption of an eco-system approach that borrows from the adage; there is power in numbers.

The idea of the eco system approach is to come together either as a loose network or a consolidated business in order to enjoy synergies as well as collectively overcome bottlenecks that one would have otherwise been unable if they were alone.

Some of the challenges faced by MSEs in light of the coronavirus pandemic are; rising cost of input/supplies, access to customers, closing of premises and insufficient capital among others.

In order to overcome these challenges and because most MSEs offer same or similar or complimenting products and cluster in various locations such as markets in Kariokor , Gikomba, Kiboswa and Luanda among others its easier to work synergistically  together.

First the cluster MSEs need to define the working relationship either as a loose network or one entity that intends to continue as so even past the current crisis. Forming a whatsapp group would be a good start to ease communication as well as for quick decision making.

Second, they must take stock of current status looking at issues as total capital available, liabilities, suppliers, customer behaviors as well as aggregate challenges faced to inform any intervention from government and other development partners.

Third, the cluster MSEs must pool all their capital deduct all debts owed as a group and use the remaining finances to source for supplies having economies of scale to request for bulk discounts and aggregate all the supplies at an agreed upon store. Why a store? One may ask.

The reason is the route to market must change in light of government directive of quarantine meaning chances of having walk in customers are slim hence the need for alternative methods of reaching the same customers.

The clusters must utilize e commerce as a tool for reaching their market. Adoption may vary from one location to the other, some may opt to set up a Facebook page where orders are done online and delivery done by  local boda bodas who pick items from central store and deliver to customer’s houses given they have local knowledge on direction and people who live in the area.

Similarly, others may use whatsapp group markets that exist in various parts of the country such as Syokimua resident market places to sell with delivery done by local boda boda with every trader selling from various platforms afterwhich profits is shared equally.

The eco system approach combined with eCommerce although unconventional  present an opportunity for MSEs to ride the coronavirus wave and is an idea worth to be tested.