Pathways to Profits — Marketing vs Finance Skills Training for Cape Town Entrepreneurs

Business Bridge, working with a World Bank research team (Stephen Anderson, Rajesh Chandy and Bilal Zia), ran a randomised controlled trial with 852 small business owners in Cape Town, South Africa. Participants were randomly assigned to a 10-week marketing-skills course (270 firms), a 10-week finance-skills course (266 firms), or a no-training control group (316 firms), with outcomes measured at 6 and 12 months.

At the 12-month endline, marketing-trained firms increased profits by 61% and sales by 64% relative to control, expanding through higher stock investment (costs up 66%) and roughly one additional hire per firm (a 57% rise in employment). Finance-trained firms achieved a comparable 41% profit gain, but through cost discipline rather than growth — their costs did not rise significantly above the control group.

The results come from a single Cape Town trial rather than a multi-site replication, and the marketing group's profit gains rode on a large increase in spending and inventory risk that could reverse if sales had not held up — a reminder that 'growth' and 'efficiency' training create different risk profiles for small firms.

Read the full analysis: https://andeglobal.org/publication/pathways-to-profits-identifying-separate-channels-of-small-firm-growth-through-business-training/