The Investor Readiness Program Brings A New Dawn For Manufacturing Startup
As a business owner/leader, is your business viable for funding opportunities?
For Lyimmo Magani, this question began to linger in his mind when he noticed his funding requests to expand his business were either turned down or never replied.
Lyimmo is the founder and CEO of L’s Food Lab Ltd, a Kenyan-based manufacturing start-up. L’s Food Lab Ltd, which goes by the name brand Adisia, manufactures consumable products that include seasoning spices and sauces such as chill, ketchup, and mayonnaise.
When he founded L’s Food Lab Ltd in 2019, Lyimmo hoped to lead the company through a flawless growth trajectory. His dream was to acquire a 15% market share, create more jobs, and impact society through charitable programs.
However, along the way, Lyimmo faced setbacks in attempts to raise the funds he required to grow his business. He used to send out funding requests to investors and financiers, but they rejected, and others never replied. Lyimmo’s business, like most micro, small, and medium enterprises (MSMEs) in Kenya, was unattractive to funders and investors.
Lack of access to finance is one of the main challenges curtailing the growth of MSMEs. While formality (possession of formal business documents) is a requirement to access finance, most MSMEs operate within the informal sector and do not qualify for the minimum funding criteria by investors and financiers. This challenge means that MSMEs have continued to struggle with inadequate access to finance, causing most of them to die within the first few years of their inception.
“I went out there to look for funds to jump-start the growth of my business, but I could not convince any investor or financier because, as I realize later, my business was not viable for funding at the moment.” says Lyimmo Magani.
While browsing online for potential solutions to his business ailment, Lyimmo learned about Invest in Africa’s (IIA) investor readiness program. He knew his turning point had come and enrolled in the program. According to Lyimmo, the program enabled him to understand how he could bring order to his business to make it attractive to external stakeholders.
He says that “Through the IIA investor readiness program, I learned how I could effectively govern and manage my business, and the importance of rolling out structures like audited accounts, and financial projections”. He adds that the program enabled him to understand the business structures and processes gaps that needed attention for his company to be viable for external funding.
IIA is a not-for-profit organization focused on empowering MSMEs to grow and scale by improving their access to skills, finance, and markets. In the wake of the Covid-19 pandemic, IIA designed a business resilience initiative that included an MSME investor readiness program. The 8-month training and finance facilitation program was aimed at supporting MSMEs to comply with the requisite business frameworks to access growth finance from investors and financial institutions.
Three months after graduating from the program, Lyimmo Magani is pleased with the immense impact this has had on his business. Through the program, he developed a professional funding pitch deck that has kicked off promising funding conversations. Lyimmo has completed audited accounts for his business, predicting his revenue and profit margins. He has further developed a financing model which has enabled him to identify financial gaps and mitigation actions for his business.
By applying business governance lessons learned in the program, Lyimmo restructured his business model, necessitating him to employ more staff to fill the gaps he found. He says that the business has clear structures that can enable them to achieve growth milestones. “Right now, we can pitch correctly for funding, and I am confident that we will expand to manufacturing more than ten different products before the end of this year. I also believe that we will improve our market share to more than 10% in the Kenyan Market within two years,” adds Lyimmo.
IIA acknowledges the immense contribution of MSMEs to job creation and the economy. As such, the organization is keen to enhance the capacity of MSMEs to actively partake in trade by positioning them for market and finance opportunities. IIA has continued to implement initiatives, such as the investor readiness program, that align with its mission of empowering enterprises to create sustainable jobs.