Encouraging Organic Growth

Let me introduce you to Peter. Peter is a young Kenyan in his early 20s who has a very small business transporting people to their required destinations via his colourful bicycle taxi 6 days a week. With the ambition of owning a transport empire, he looks to large successful companies for his inspiration. He realises that to become big, he needs to be known. Unlike other people in Kenya doing the same business, Peter understands the importance of branding by wearing customised clothing, and has also innovated by encouraging his younger passengers to book his service online via email or Twitter.


Peter is a kind and passionate individual, dedicated to providing a quality, honest and reliable service to anybody who needs it. He treats every customer as if they were his first, using loyalty schemes, advanced-payments and even offering credit to remain competitive.

Despite all his hard work, Peter only earns an average of 400ksh (£3.24) per day. He wants to purchase his own motorbike so that his earning income will become significantly higher. However, a brand new motorbike costs 80,000ksh (£648) – well out of his price range. This is where I come in. One of the reasons I’m in Kenya is to work with an organisation that offers small loans to viable businesses with the potential to grow; so it kind of makes perfect sense for me to offer a considerable sum to Peter.

Before rushing into anything, we decided to plot his income into an Excel spread-sheet. Each month he has revenues of 9,600ksh and gets an extra 1,200ksh from another bicycle which he rents out to his best friend at a highly discounted rate. We realised that if he only saved 100ksh a day, by the end of the year he would be able to purchase 2 extra bicycles. Renting these out for 150ksh per day and putting the 300ksh into savings, Peter would have enough to purchase the motorbike he has always dreamt about by the end of the second year.

Saving more per day each year, with an aggressive growth strategy of continuously purchasing bicycles and motorbikes for the purpose of renting to other taxi drivers, Peter’s daily revenues could grow from 400ksh to 1,250ksh by year 3. By year 6, his yearly revenue could be well over 1,000,000ksh. Following the strategy we have mapped out, Peter could realistically be on course to have revenues of over 6,750,000ksh (£54,675) in year 10, owning almost 70 branded motorbikes and 20 bicycles.

Giving loans to micro-businesses can quickly accelerate growth, but sometimes it just isn’t necessary. I am sure that if Peter was loaned the money for a motorbike he could pay it all back on-time, but debt is a burden and it can become stressful if unexpected financial problems arise during the re-payment period. I will be encouraging Peter to use the 5 year detailed plan as a guideline for growing his business organically, without a loan. The modest plan (using worst-case scenario figures) should allow Peter to create financial stability for himself and his family, and offers him the fantastic opportunity to achieve his life-long goal of owning a Kenyan Transportation Empire.

Written By James Holden, 2013 Fellow