A couple of months ago, I started on a thrilling business adventure: establishing the first-of-its-kind matching service.
This groundbreaking platform offers organisations, including the one that I work for, a pathway to finance, access to knowledge, mentorship, and partnerships to mitigate the risks associated with growing and scaling an enterprise.
The harsh reality is that a significant percentage of enterprises fail within the first year, and by the tenth year, only about 33 per cent remain operational, as revealed by research from the Small Business Administration (SBA).
Additionally, the research suggests that partners and investors struggle to identify and establish investment-ready enterprises due to the complexities involved in negotiating a deal and the high search and transaction costs.
These daunting statistics underscore the significance of the matching service, which aims to address the challenges faced by entrepreneurs by enhancing the investability of their ventures.
By doing so, they increase their chances of survival during the critical stages of development and strive to foster more accurate matching between the demand and supply sides.
Array of tools
A similar approach was deployed by Oxfam for its Enterprise Development Programme (EDP), an innovative initiative linking investors with rural, remote enterprises with limited existing capacities but immense potential to create social and economic opportunities for women.
The program offers a diverse array of tools, including training and support, to strengthen early-stage enterprises.
At inception, Matching Service received an overwhelming response, with over 70 plus applications from entrepreneurs across Kenya. After a rigorous selection process, we selected 10 enterprises with incredible potential and passion.
Enterprises prioritising social impact operate differently from conventional businesses, and thus they require unique support and partners.
Take, for example, Camilah Mwangima, the founder of Elation Space, a digital platform focused on creating awareness of mental health, and Isaac Kasyoka, the founder of MS Kenya, advocating for patients with Multiple Sclerosis disorder.
These remarkable initiatives hold great potential to positively impact many lives, but their success is measured by the positive social change they create rather than immediate financial returns.
Given their longer-term horizon and the complexities of addressing social issues, social impact enterprises face challenges in achieving financial sustainability.
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It may take them seven to 10 years, or even longer, to reach a point of financial break-even. During this time, they constantly need to adapt their products, services, and initiatives to ensure they meet their impact and revenue goals effectively.
To effectively support and foster the growth of such enterprises, it is crucial to match them with investors, partners, and stakeholders who demonstrate patience and understanding of the inherent challenges and timeframes involved.
Change in society
By providing such patient support and adopting a more socially-conscious approach organisations like Emerging Leaders Foundation- Africa among others will play a significant role in helping these enterprises drive meaningful positive change in society.
This transformative journey will culminate in a highly anticipated Matching Day, where we will showcase the growth and impact achieved by these enterprises through our matching development program. It will be an excellent opportunity for partners and investors to witness the potential of these ventures firsthand.
The time is ripe to focus on entrepreneurship, which plays a pivotal role in driving economic growth and development. Governments, policymakers, the private sector, and civil society should make a concerted effort to build the capacity and invest in sustainable enterprises capable of achieving significant social impact.
As we continue to build and refine the Matching Service, our commitment remains steadfast in ensuring its effectiveness, responsiveness, and adaptability to the needs of entrepreneurs. We are thrilled to embark on this transformative journey, united in our mission to create a brighter future for young women and men in Kenya.
The writer is an Associate at Emerging Leaders Foundation-Africa