How to Start and Manage a Profitable Business in Kenya

With the rise in unemployment levels and the COVID-19 pandemic rendering many people jobless, there has been an increase in business start-ups in the country.

According to data from the national companies registry, the number of business names registered between July and September 2020 rose by 95% compared to the same period in 2019.
The pandemic reminded us of a very vital aspect of financial stability, which is to always have an alternative source of income.

That said, starting a business is relatively easy, especially now that people can register and set up a business online. The difficult part however, is in running the business to ensure that it becomes and remains profitable.

According to Christine Atieno, an entrepreneur who runs a successful online business, there are five key points that every business owner should consider when planning to set up a business.

The Market Demand of the good and service.

The easiest way to fall out of business as soon as you launch is by offering a service that is either oversaturated in the market or lacks demand. It is advisable to conduct a market research study to determine if at all there is demand for the product and if there is enough supply to meet the demand or not.

Your target audience.

Many businesses tend to target the entire population and this is where they go wrong. Businesses should always define who their target audience is, in great detail. They should know the gender of the audience, the age group, their economic status, their location, where they spend most of their time, the online sites they frequently use etc. This will enable the businesses to better target the customer and create products and services that best suit this customer. Ultimately, this increases their chances of making higher sales.

The funding and budget required.

As you test the viability of the business in the market, it is advisable to use the least amount of capital as possible. Do not be in a hurry to invest in expensive products when you are still young in the business. Start small and scale up as you rise. Many small businesses, in a bid to compete with the already established ones, may choose to invest in expensive packaging or setting up an expensive website. This makes the start-up cost very expensive and eventually, they will struggle to break even and probably shut down their business altogether.

The taxes that you will be required to pay.

For every busines or service offered, you will be required to remit a portion of your income or profit to the government in form of taxes. In Kenya, many businesses disregard the issue of taxes. However, failure to be tax compliant will be very detrimental to your business in the long run. Once discovered, the heavy fines that you will incur for not remitting your taxes may cost you your entire business and force you to shut down.

The competition in the market.

As much as it may be a difficult task, it is vital for businesses to closely monitor their competitors. As a business owner, you should always strive to offer a service or product that has a unique aspect that sets you apart from your competitors. This is what becomes your unique selling point. In addition to this, you should always strive to introduce new aspects that will continue setting you apart, whilst remembering that your competitors are also watching you and working to outdo your unique aspect.

If you are planning to start a business, keep these aspects in mind as you create your business plan. If you are already in business, it is not too late, you can revise your business strategy and include the above aspects to boost the performance of your business and ultimately chart a new path for yourself.