Worst businesses to start in Kenya


Kenya is a great place to live and work, but one thing that can make it difficult for new entrepreneurs, is the fact that there are many businesses that are more risky than others.

In this article, we will list 12 of the worst businesses to start in Kenya and why they’re so risky!

Starting an M-pesa business

Though once a lucrative business,the M-pesa agent business is no longer a great one because of over saturation of the market.This has resulted to low commissions that may not even be able to cover your overhead costs.

Another challenge of starting an M-pesa agency is fraud. Fraudsters have perfected the art of hacking and stealing money from M-pesa agents.You have to be constantly alert or all your earnings can be wiped out overnight.

Building a grocery store in a Nairobi’s high-density area .

In Nairobi’s high-density areas such as Kibera,there is a mama mboga in every corner. Therefore it is very difficult to build a successful grocery store as you might not be able to compete competitively in terms of price as they don’t have any overhead and running costs that you might incur.

A clothing boutique

If you’re not an fashion designer, your clothes will likely be very similar to what’s being sold in stores already.And with so many people starting their own online shops these days, it may be difficult for customers to find you amidst all that competition.

Cyber café

Nowadays every one has a smartphone .They can regularly go online from the comfort of their homes and do not need to visit an internet cafe to do this.For you to succeed ,you’ll have to keep your prices low and be content with a small customer base.

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Printing company in Kenya

The risk here is that you’ll only receive work when other companies are out of ink or paper supplies.This means your profits will depend on your ability to predict when the companies will need your services.

Beauty salon or spa

These are very competitive fields to break into as there is a beauty salon in every corner in your town.To succeed, you have to be very aggressive in marketing and offer exceptional services so that customers can refer each other and keep coming back.

Food delivery service

This is both a high-risk and low-profit venture. The risk here is that you’ll have lots of competition, because everyone’s struggling with rising prices on groceries and cooking oil at the same time.

The other issue is that the margins on this business are low: you’ll be operating at very thin profit margins.

A construction company

Since construction is such a high-risk industry, it’s not an easy decision to start one of these companies in any country – and even more so if you’re doing it in Kenya.

The risks here include investments of high capital, uncertainty about the availability of manpower and challenges in getting customers who are willing to pay your fees.

A major challenge in this kind of business is lack of infrastructure as you’ll need access to equipment like bulldozers or cranes that’s not always easy (or possible) to find when starting up a construction company.

A home bakery

The challenges in starting a home bakery is finding customers who are willing to buy from you instead of choosing another option that they are accustomed to.

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Another challenge is the cost of power.Electricity cost has tripled over the years and this might eat into your profits.

A transport company that specializes in moving freight

This is a risky business especially if there is too much supply and not enough demand at a certain point.This will cause you to incur operational costs even when the fleet of vehicles are not running.

A shylock business

This is another business that you ought to avoid. If a person who owes you money suddenly dies or defaults you will have a hard time selling their pawned items as very few people are willing to buy used goods as they have the notion they might be stolen.

A clothes factory

In Kenya,majority of people don’t wear traditional clothing anymore. They prefer second hand clothes commonly known as ‘Mitumba’ .The risk here is that the demand for those types of garments will be too niche to support your business because people prefer Western fashion over anything else.

Conclusion

The list of businesses that are most difficult to start in Kenya is quite extensive.

If you’re considering a new business, it’s worth doing some research before deciding what type of venture is best for your skills and experience level.

A thorough examination will help you avoid the heartbreak and disappointment that come with starting something only to find out later that this industry really isn’t right for you or your company.

If there are any pitfalls we missed on our exhaustive list, please share them with us in the comments below!

We’d love to hear from other entrepreneurs who have their own horror stories about getting into an industry they didn’t know enough about beforehand.

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