Factors and Indicators of Business Growth
Senior 1 · Entrepreneurship
Factors and Indicators of Business Growth
Lesson 2 of 5
25 min
In 2022 a beekeepers' cooperative in Kayonza District had 25 members and sold about 1.2 tonnes of honey a year, mostly in old bottles at the local market. By 2025 it had 60 members and sold about 4.5 tonnes, in labelled jars, to supermarkets and hotels in Kigali. (An illustrative case.)
Ask the chairperson what changed and she lists: members trained to use modern box hives; a new treasurer who kept proper records; a SACCO loan for a honey press; clean, labelled jars; a newly tarred road to Kigali; and more and more city customers asking for local honey. She also remembers the dry season of 2024, when fewer flowers meant less honey.
Think about it: which of these could the cooperative control, and which came from outside?
Definition
Factor of business growth: anything that helps (or holds back) the growth of a business.
Example: the new road that halves the time to reach Kigali.
Definition
Internal factor: a factor inside the business, which the owners and managers can control or change.
Example: training members to use modern hives; keeping good records.
Definition
External factor: a factor in the business environment outside the business, which it cannot control and must adapt to.
Example: customer demand in Kigali, the weather, a SACCO's lending rules, government policy.
Definition
Business environment: everything outside a business that affects it: customers, competitors, suppliers, lenders, government, infrastructure, technology, the economy and the natural environment.
Example: the roads, markets, laws and weather around the Kayonza cooperative.
| Internal factors (the business controls them) | External factors (the business adapts to them) |
|---|---|
| Management skills: planning, leadership, decisions | Market demand: how many customers want the product and can pay |
| Capital and reinvested profit: money kept in the business to expand | Access to finance: whether banks and SACCOs will lend, and on what terms |
| Skilled, motivated staff | Government policy: taxes, support programmes, Made in Rwanda |
| Product quality and meeting standards (Unit 7) | Infrastructure: roads, electricity, water, internet |
| Innovation and the technology the business uses | Competition from other businesses and imports |
| Marketing and customer care | Regional trade: the larger East African Community (EAC) market |
| Good records and financial management (Unit 5) | Stability, security, weather and climate |
Tip
The "next week" test. Could the owner change it by next week, with a decision and some effort? Then it is an internal factor. Must the owner simply live with it and adapt? Then it is external.
Worked example: sorting the cooperative's growth factors
| What happened | Internal or external? | Why |
|---|---|---|
| Members trained in modern box hives | Internal | The cooperative chose to train its members: skills and technology |
| A treasurer who keeps proper records | Internal | Management inside the cooperative |
| Clean, labelled jars | Internal | Product quality, decided by the cooperative |
| The SACCO agreed to lend | External | The SACCO decides; the records (internal) helped convince it |
| A newly tarred road to Kigali | External | Infrastructure built by government |
| More city customers want local honey | External | Market demand |
| A dry season in 2024 | External | Weather: it held growth back |
How much did it grow? Honey sold: , so almost four times as much. Members: times as many.
Warning
Applying for help does not make the help internal. A loan, a grant or a government training programme is an external factor, because someone outside decides whether to give it. What the business does with it (the skills learned, the press bought, the records kept) is internal.
CrashCourse, "Is Growth Right For You?: Crash Course Entrepreneurship #17" (about 11 minutes). Watch for the different routes to growth (new sources of income, lower costs, new people and skills) and the questions an owner should ask before growing. The examples are American.
Choose a business in your area that has grown in the last few years: a shop, a salon, a garage, a farm or a cooperative. List three internal and three external factors that helped it grow, and one factor that held it back. Share your list with a partner and check each other's classification with the "next week" test.
Practice
Sources and credits
Written by Ganzaa: the Kayonza cooperative case, the diagram, the tables, the worked example, the activity and the practice items. Names and figures are illustrative (2026).
