New customers – not government contracts – key to growing a small business

Jeffrey Manu

Jeffrey Manu

After 10 years starting and building businesses in Africa, there is one question I ask every entrepreneur I work with: Do you have effective lead-generation and -conversion systems in place?

In my experience, very few startups answer this question with a yes. Having started my own businesses, I know how hard it is to access and retain new customers. But there are a few steps that I’ve found help in developing a strategy for doing so.

Step 1: Define the market in which you can create the most value

First, identify who wants and is willing to pay for your product. Is your ideal customer a female corporate banker who lives 30km away from her office? Is she actively looking for a brand new vehicle? Would she rather own an SUV or a compact car?

Second, decide on what your message, positioning and differentiation will be. This is about defining what you do, but also what sets you apart from other similar businesses and demonstrates that you know your ideal customer better than they do. Are you the safer option? The cheapest? The one who delivers in 3 days?

Third, find a way to distribute your message and product to them. Some businesses use websites and social media, such as Twitter, YouTube and Facebook, to get their message and products to their customers. Other options are traditional retail outlets in good locations, and physical advertising such as billboards or flyers.

The most profitable businesses are geniuses at using multiple distribution channels effectively. So ask yourself what forms of distribution will give your customer easy access to your message and products. It’s a process with three parts: market segmentation, positioning and distribution.

Step 2: The importance of new customers

If you increase the number of customers, the number of things that each of them buys, and get them to make purchases more often, your growth will be exponential.

The below equations demonstrate this:

Let’s set the following values:

Price of product: KSh.100
Number of customers: 100
Number of times each customer buys from you in a year: 1

KSh.100 per product X 100 customers X 1 = KSh.10,000 per year.

Now let’s increase the price and customers by just 20%, and turn a single-purchase customer into one who buys something twice a year:

KSh.120 per product X 120 customers X 2 purchases per year = KSh.28,800 per year.

Notice how your annual revenue has more than doubled.

Step 3: Increase sale volumes

Now it’s time to figure out what makes customers buy more from a business. Firstly, allow your customers to return or exchange their products if they’re not satisfied. It makes the purchase less risky for them. We have found out that businesses that set up an offer that allows customers to return goods sold at a later date if they are unsatisfied can double their revenue in just 12 months.

Secondly, our research has shown that customers buy more from businesses that they feel they know a lot about. The lesson here is to educate the customer on what the benefits of your product or service are. Too many businesses talk about when they were established and how many branches they have, instead of educating their prospective customers.

Thirdly, try increasing your prices. Most business owners scrape by because they’re afraid of what people will say if they charge more. If you are providing value, you can justify raising your prices if you need to. Customers will be willing to pay, provided that you use the above strategies to market and help them understand the business.

Finally, build partnerships. You can’t expect to produce everything on your own, but there are often products that make sense for you to sell with your core business. Find someone who does it well and enter into a partnership.

For example, one business we worked with was a spare-parts dealership in Accra. The business owner specialised in used car parts but found out that he could make more money by providing value-added products such as batteries and oils. He contacted local distributors and got them to supply him with their products in a joint venture with a profit-share agreement. Today business is so good that he is considering opening another branch in Lagos.


Business growth is easy once you have a carefully conceived plan and you carry it out. None of the businesses we’ve worked with are solely government contractors, though not having access to public procurement is an excuse that many businesses use. African businesses are growing using traditional strategies to increase customers and revenue.

Jeffrey Manu is an entrepreneur and marketing strategist. He founded and builds marketing systems and advertising campaigns for business owners. He also runs STEM-based boot camps for African youth.