Building sustainable business development services: empirical evidence from Kenya

Abstract

The aim of this study was to explain sustainability of Business Development Services (BDS) in Kenya. The study was conducted through the use of Grounded Theory methodology on eleven BDS providers, two BDS facilitators and one donor agency and four small enterprise (SE) entrepreneurs. Data collection and analysis took 12 months spread between the months of May 2008 and August 2010. The study established that BDS Providers venture into business for different motives. The motives were classified into three as extrinsic, intrinsic and philanthropic motives. The study established that there are BDS Providers who venture into and sustain their businesses mainly for intrinsic and philanthropic motives. The study showed that while it is true that BDS Providers strive to recover costs and possibly make profits, this is not the major reason why some stay in business. The study showed that there are multiple conceptions of “sustainability” depending on providers’ strategic response; background characteristics; start-up motives; ability to identify and close gaps; situational forces; perception of the business and the meaning attached to business. These multiple conceptions of “sustainability” affect the way continuity is pursued and sustained. BDS becomes sustainable in the traditional economic sense of covering costs when the provider manages to identify and fill at least 9 specific demand and supply side gaps. The gaps relate to awareness, value, trust, quality, capacity, willingness to pay, appreciation, ability to pay and perception. BDS Providers identify and close the gaps in their market using a number of strategies. The strategies were client, product, price, simultaneous collaboration and competition, trial and error and diversification which differ by situational context. The study showed that filling some of the gaps requires collaboration among service providers. Filling other gaps require the action of the industry as a whole. The study further showed that perception of the providers is a major factor that influences how they do business and whether they stay in business. The study offers a number of theoretical contributions which have both theoretical and practical implications. First BDS philanthropy suggests that evaluation of performance and/or success should not be based purely on mercantile principles but should also combine the socio-cultural impact of the business. It also suggests that the measure of success should not be generalized across business sectors or within a business sector. Philanthropic motives may also justify spending public resources on such people because they have a mission to impact on others. Regarding perception, the study recommends that policy makers should take a deliberate effort to improve perception of potential opportunities in small-scale businesses.