Kenya has various incredible opportunities for aspiring entrepreneurs. With Kenya’s unemployment rate at 5.4 percent, many people are looking to start businesses to fend for their families. However, not all business ideas are created equal; some are not worth the effort. This guide will explore some of the worst businesses to start in Kenya, providing valuable insights to help you make informed decisions and avoid potential pitfalls.
1. Traditional Print Media
Traditional print media, including newspapers and magazines, has been facing significant challenges globally due to the rise of digital media. In Kenya, this sector is no exception.
The demand for print publications has steadily declined as more people turn to online sources for news and information.
The cost of production, distribution, and declining advertising revenue make it challenging to sustain a print media business. Entrepreneurs in this field must adapt by developing a robust online presence and diversifying their revenue streams through digital advertising and subscriptions.
2. Betting Firm
While sports betting and gambling are widespread in Kenya, the industry is heavily regulated. The government has imposed stringent rules, such as high taxes and advertising restrictions, which can make it challenging for new betting firms to establish themselves.
Moreover, public sentiment towards gambling has varied, and changes in legislation can drastically affect the industry. It’s crucial to navigate the legal landscape and consider the potential consequences of social and regulatory shifts.
3. Offline Taxi Business
Traditional taxi businesses face stiff competition from ride-sharing platforms like Uber and Bolt. The market for traditional taxis has dwindled due to these app-based services’ convenience and pricing advantages.
Additionally, the high costs of acquiring and maintaining a fleet of vehicles and dealing with regulatory issues, such as licenses and permits, can make running a profitable offline taxi business challenging.
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4. Political Blogging
While political blogging can be an effective platform for discussing important issues, it also has diverse challenges in Kenya. The political landscape can be polarized, and bloggers may face legal and personal risks if their content is controversial or offensive.
Government regulations can also affect online content, and potential changes in legislation may have implications for freedom of expression. If you choose this path, be prepared for the legal and security risks associated with political commentary.
5. Professional Photography
While the demand for photography services remains high, the availability of state-of-the-art smartphone cameras has made it more challenging for professional photographers to stand out. This has led to talented photographers vying for a limited pool of clients.
To succeed, you’ll need high-quality equipment and marketing skills to stand out from the competition. You should also diversify your services, such as offering videography or specializing in niche markets, such as weddings or corporate events, where high-quality images are essential.
6. Pet shop
Pet shops can be a challenging business in Kenya due to various factors. The pet products and services market is relatively small compared to other countries. Many Kenyans do not prioritize pet ownership, and the cost of importing or breeding certain pets can be high.
There is also limited awareness and demand for specialized pet products and services, making it a challenging business to start. There may also be legal and ethical concerns related to the sourcing and treatment of animals.
7. Tender Business
Starting a tender business in Kenya can be quite challenging for several reasons. The primary downside is the high level of competition.
Many established companies and well-connected individuals already dominate this market. Winning government tenders, in particular, often requires political and bureaucratic connections, making it challenging for newcomers to break in.
Corruption is also a significant issue in the tendering process, which can be discouraging for honest entrepreneurs. Payment delays and disputes can also pose financial risks to a tender business.
8. Matatu Business
The matatu business can be profitable, but it comes with numerous challenges. One of the most significant issues is the industry’s lack of regulation and safety standards. Matatus are often associated with reckless driving, overloading, and road accidents.
The government’s efforts to regulate this industry can result in frequent crackdowns, fines, and the impounding of vehicles. Fuel and maintenance costs can be high, and passenger competition can be fierce. Moreover, unpredictable changes in fuel prices can impact profit margins significantly.
9. Insurance Company
Starting an insurance company in Kenya can be highly capital-intensive and competitive. The insurance sector is already saturated with well-established companies, both local and international. Building trust and credibility takes time, and new entrants may need help to gain market share.
The regulatory requirements, such as minimum capital thresholds and compliance with complex legal and regulatory frameworks, add to the challenges. Additionally, fraud and false claims are prevalent in the industry, negatively affecting profitability.
10. Music Shop
Running a music shop in Kenya can be challenging due to the shift towards digital music consumption. The declining sales of physical music formats like CDs and DVDs make sustaining a traditional music shop challenging.
High piracy rates also impact the profitability of selling music. To succeed, music shops need to diversify their offerings, such as selling musical instruments or music-related services, which can require additional investment and expertise.
The rise of affordable personal devices and widespread access to the internet has significantly reduced the demand for cybercafes. Many people now have smartphones or laptops, making it more convenient for them to access the internet at home or on the go.
Computer equipment maintenance and replacement costs can be high, and the need for regular updates and security measures can be challenging for cybercafe owners. Moreover, the potential for illegal activities (e.g., cybercrime) within cybercafes can lead to legal issues and increased regulation.
12. Movie Shop
Running a movie shop faces challenges like a music shop, with declining physical media sales. The popularity of streaming services like Netflix and the prevalence of online piracy has made it difficult for traditional movie shops to compete.
Licensing and copyright issues can also pose legal risks for movie shop owners. Diversifying into selling or renting other forms of entertainment, like video games, may be necessary for survival.
Characteristics of a Good Business in Kenya
To avoid venturing into any of the worst businesses to start in Kenya, it’s vital to understand the characteristics of the good ones. Here is what to look out for:
- Availability of Resources: A good business in Kenya should have access to the necessary resources, including skilled labor, raw materials, and infrastructure, to operate efficiently.
- Scalability: The business should have the potential for growth and scalability. This means it should be able to expand its operations and increase its market presence over time.
- Competitive Price Point: The pricing of the product or service should be competitive and align with the local market’s purchasing power. It should offer value for money and be affordable to the target customers.
- Solving a Problem: Successful businesses in Kenya often address specific problems or needs in the market. Whether through a product or service, the business should provide solutions that add value to customers’ lives.
- Alignment with Skills: The business must align with the owner’s or team’s skills and expertise. This will increase the chances of success as the business owners can leverage their knowledge and experience.
- Right Timing: Timing is crucial. A good business should enter the market at the right time. This involves understanding market trends, demand patterns, and economic conditions to launch or expand when opportunities are favorable.