Insights on Driving Business Growth in Emerging Markets

On our Grit & Growth episode with professor Stephen J. Anderson, we learned how small businesses in Africa were able to grow and scale through three different studies that took place over the last five years.

Darius Teter , executive director of Stanford Seed and Grit & Growth host, chatted with Anderson about how African entrepreneurs benefited from different interventions, and we're excited to share key learnings from their conversation below:

1. Remote coaching works. The study with 930 Ugandan businesses, ranging from 2-10 employees, had a randomly assigned marketing expert, consultant, or former entrepreneur for six months. Data showed that the companies that received coaching increased sales by up to 50 percent.?
2. Coaching on your value proposition has the biggest effect. Anderson advises entrepreneurs to ask themselves, “What am I offering? Who am I offering it to? And why should they buy from me?” It encourages you to think about your business model, think about the strategic shifts that you might have to make in the value proposition, and coaching or access to coaching helps you do that.
3. In-person classroom training increases profits. The study of small businesses in South Africa showed that those who received tactical training for 10 weeks — whether finance and accounting or marketing — increased profits by about 25 to 30 percent.??
4. Networking with other entrepreneurs enhances learning. “We’re social beings,” explains Anderson, “and we still want to network. I learn a concept, I take it out to my business. I come back a week later and share what worked and what didn't work. I'm also going to hear from 10 or 15 other entrepreneurs. And so I'm going to learn the theory from whatever the instructor's telling me, but I'm also going to learn practically from others.” Peer and experiential learning drove this method to success.
5. Entrepreneurs need to delegate to scale. Anderson’s study of hundreds of businesses in Nigeria proved that to scale up, you need to let go. The goal here was to try to test the entrepreneurial boundary, the boundary of these constraints on time and resources as an entrepreneur. Anderson says, “Providing entrepreneurs with access to the expertise they need, that they can insource or outsource, grows the team, the managing team, and eventually grows the sales and profits of those firms.”
6. Try not to hire family or friends. Anderson urges entrepreneurs to think hard before they hire and to look for ways to professionalize their workforce with the specific skills they really need to grow the business by outsourcing experts.

Listen to the full episode with Stephen J. Anderson to hear more about each study and their findings, and get inspired to move your own entrepreneurial journey forward.