1st-Dec-2025 • Faith Chebet • SME Profitability Strategies
Small and Medium Enterprises (SMEs) in Kenya play a vital role in driving the economy forward. However, achieving and sustaining profitability can be challenging for many entrepreneurs. To help you navigate this landscape, we've compiled some top strategies to boost your bottom line.
One of the most straightforward methods to increase profits is by minimizing costs. This could involve negotiating better deals with suppliers, optimizing energy usage, or reducing waste in your operations. For instance, a Nairobi-based bakery reduced its electricity bill by 20% by switching to LED lighting.
Increasing revenue can be achieved through various means such as upselling, cross-selling, and improving customer service. A well-known example is a car dealership that offers customers extended warranties or additional insurance products during the sales process.
Cash flow is the lifeblood of any business, and improving it can significantly enhance profitability. Strategies include offering discounts for early payments, extending payment terms to suppliers where possible, and implementing efficient accounts receivable processes.
Leveraging technology can help streamline operations, reduce costs, and open up new revenue streams. This could involve adopting a business management platform like Lipabiz, which offers features such as inventory tracking, invoicing, and payments processing.
Diversifying your product or service offerings can help insulate your business from market fluctuations and attract a broader customer base. A Mombasa-based retail store expanded its product range to include electronics, which proved popular among younger customers.