10 Worst Business to Start in Kenya

Introduction:Worst Business to Start in Kenya

I remember the day I decided to become an entrepreneur in Kenya. The excitement, the dreams of success, and the hope of financial freedom were all I could think about. But as I sat in my small Nairobi apartment, sipping chai and brainstorming business ideas, I wished someone had warned me about the potential pitfalls.

If you’re reading this, you’re probably in the same position I was. You’re eager to start your own business, but you want to make sure you’re not jumping into a sinking ship. Well, you’re in luck! I’ve done the research, made the mistakes, and now I’m here to share what I’ve learned about the worst businesses to start in Kenya.

But before we dive in, let’s take a moment to acknowledge that even in challenging times, there are always opportunities for financial assistance. For instance, ZangCash Pay is an online platform in Kenya that can help you get money to pay bills, shop online, pay fees, rent, loans, and more. It’s always good to know your options!

Now, let’s get into the meat of our discussion. Are you ready to learn about the business ventures that could potentially drain your wallet faster than a leaky faucet? Let’s go!

Key Takeaways

Before we delve into the details, here are the main points we’ll cover:

1. Understanding the criteria for identifying poor business ventures in Kenya
2. Top 10 worst businesses to start in Kenya and why they’re risky
3. Alternatives to consider and tips for successful entrepreneurship
4. The importance of thorough market research before starting any business

Remember, if you find yourself in a financial pinch while planning your business, ZangCash Pay can be a helpful resource for managing your bills and expenses.

Criteria for Identifying Worst Businesses

Before we jump into our list, let’s talk about what makes a business “bad” to start in Kenya. It’s not just about low profits – there are several factors to consider:

1. Market Saturation: Is the market already flooded with similar businesses?
2. Regulatory Challenges: Are there complex legal hurdles to overcome?
3. High Operational Costs: Will the business drain your resources before it can turn a profit?
4. Changing Consumer Behavior: Is the industry becoming obsolete due to new technologies or trends?

Keep these criteria in mind as we explore the worst businesses to start in Kenya.

The 10 Worst Business to Start in Kenya

1. Taxi Business Using Expensive Loans

Remember when everyone and their uncle wanted to start a taxi business? Well, those days are long gone. Here’s why:

• High Competition: With the rise of ride-sharing apps like Uber and Bolt, traditional taxis are struggling to keep up.
• Expensive Loans: Many aspiring taxi entrepreneurs take out high-interest loans to buy vehicles, leading to crippling debt.
• Maintenance Costs: Keeping a taxi in good condition can eat into your profits faster than you can say “Twende!”

Did you know? According to a report by the Kenya National Bureau of Statistics, the number of registered taxis in Nairobi decreased by 15% between 2018 and 2020 due to competition from ride-sharing apps.

2. Bodaboda (Motorcycle) Business

While bodabodas are a popular mode of transport in Kenya, starting a bodaboda business can be a bumpy ride:

• Predatory Lending: Many bodaboda operators fall victim to high-interest loans with daily repayment requirements.
• Safety Concerns: The high rate of accidents involving bodabodas can lead to costly repairs and medical bills.
• Oversaturation: In urban areas, there’s often more supply than demand, leading to fierce competition.

3. Cybercafe Business

Remember when cybercafes were all the rage? Well, times have changed:

• Declining Demand: With the rise of smartphones and affordable home internet, fewer people need cybercafe services.
• High Operational Costs: Maintaining computers and paying for high-speed internet can be expensive.
• Technological Obsolescence: The rapid pace of technological change means constant upgrades are necessary to stay relevant.

4. Matatu (Public Transport) Business

While matatus are a Kenyan institution, starting a matatu business is no walk in the park:

• Strict Regulations: The matatu industry is heavily regulated, with frequent changes in rules and requirements.
• High Operational Costs: From fuel to maintenance to paying crew members, the costs can quickly add up.
• Intense Competition: Established players and new entrants make it difficult for newcomers to gain a foothold.

5. Money Lending Business

Thinking of becoming a local Shylock? Think again:

• Regulatory Hurdles: The Central Bank of Kenya has imposed strict regulations on money lenders.
• High Default Rates: Economic uncertainties can lead to high rates of loan defaults.
• Ethical Concerns: The industry often faces criticism for predatory practices, which can damage your reputation.

6. Charcoal Business

While charcoal is still widely used in Kenya, the charcoal business faces significant challenges:

• Legal Restrictions: Deforestation concerns have led to strict regulations on charcoal production and transport.
• High Transport Costs: Bribes and corruption can significantly increase the cost of transporting charcoal.
• Environmental Concerns: Growing awareness of environmental issues may lead to decreased demand in the future.

7. Betting Firms

The betting industry in Kenya has seen a boom, but it’s not all winning tickets:

• Heavy Regulation: The government has imposed strict regulations and high taxes on betting firms.
• Ethical Concerns: The social impact of gambling addiction can lead to negative public perception.
• Market Saturation: With many established players, it’s hard for new entrants to gain market share.

8. Travel Agency

In the age of online bookings, traditional travel agencies are facing an uphill battle:

• Online Competition: Websites and apps allow travelers to book directly, cutting out the middleman.
• High Investment Requirements: Setting up a reputable travel agency requires significant capital.
• Vulnerability to Global Events: As we’ve seen with the COVID-19 pandemic, travel agencies are highly susceptible to global crises.

9. Political Blogging

While political discourse is always hot in Kenya, making money from political blogging is another story:

• Monetization Challenges: It’s difficult to generate consistent revenue from political content.
• Legal Risks: Controversial content can lead to legal troubles.
• Credibility Issues: With the rise of fake news, political blogs often struggle to maintain credibility.

10. Second-Hand Clothes Business

The mitumba business might seem lucrative, but it comes with its own set of challenges:

• Import Regulations: Government policies on second-hand clothes imports can change suddenly.
• Quality Control Issues: It’s hard to guarantee the quality of every item, leading to potential customer dissatisfaction.
• Competition from Online Retailers: E-commerce platforms like Jumia are capturing a significant market share.

 Quiz

Let’s test your understanding of the worst businesses to start in Kenya with a quick quiz!

1. Which ride-sharing apps have contributed to the decline of traditional taxi businesses in Kenya? a) Uber and Bolt b) Lyft and Grab c) Ola and Didi
2. What is a major challenge facing the bodaboda business in Kenya? a) Lack of customers b) Predatory lending practices c) Shortage of motorcycles
3. Why are cybercafes declining in popularity? a) People prefer libraries b) Rise of smartphones and home internet c) Government regulations
4. Which regulatory body has imposed strict rules on money lending businesses in Kenya? a) Kenya Revenue Authority b) Central Bank of Kenya c) Nairobi Stock Exchange
5. What environmental concern is affecting the charcoal business in Kenya? a) Air pollution b) Water contamination c) Deforestation

(Answers will be provided at the end of the blog post)

Alternatives to Consider

Now that we’ve covered the worst businesses to start in Kenya, you might be wondering, “What should I do instead?” Here are some alternatives to consider:

1. E-commerce: With the growing internet penetration in Kenya, starting an online store could be a viable option.
2. Agribusiness: Kenya’s agricultural sector offers many opportunities, from urban farming to value addition.
3. Tech Startups: With Nairobi being dubbed the “Silicon Savannah,” there’s potential in the tech industry.
4. Education and Training: There’s always demand for quality education and skills training.
5. Green Energy Solutions: As Kenya moves towards sustainable energy, businesses in this sector could thrive.

Remember, success in any business requires thorough research, planning, and execution. Don’t forget to consider your skills, passions, and the market demand when choosing a business venture.

Tips for Successful Entrepreneurship in Kenya

1. Do Your Homework: Conduct thorough market research before starting any business.
2. Start Small: Test your idea on a small scale before making big investments.
3. Network: Build relationships with other entrepreneurs and potential mentors.
4. Stay Flexible: Be ready to pivot if your initial idea doesn’t work out.
5. Manage Your Finances: Keep a close eye on your cash flow and avoid unnecessary expenses.

The Importance of Market Research

I can’t stress enough how crucial market research is when starting a business in Kenya. Here’s a simple table to illustrate the key aspects of market research:

Conclusion

Starting a business in Kenya can be a rewarding experience, but it’s crucial to choose your venture wisely. By avoiding the pitfalls we’ve discussed and doing thorough research, you can increase your chances of success.

Remember, entrepreneurship is a journey, not a destination. Even if your first venture doesn’t work out, each experience teaches valuable lessons that can lead to future success.

We’d love to hear about your entrepreneurial experiences or thoughts on business in Kenya. Have you encountered any of these challenges? Do you have success stories to share? Leave a comment below and let’s start a conversation!

And if you’re facing financial challenges while planning your business venture, don’t forget that ZangCash Pay is here to help. Whether you need assistance with bills, online shopping, fees, rent, or loans, ZangCash can provide the financial support you need to keep your entrepreneurial dreams alive. Apply Now and take the first step towards financial freedom!

FAQ Section

1. Q: Is it impossible to succeed in the businesses listed as “worst” in this article? A: While success is possible in any industry with the right strategy and execution, these businesses present significant challenges that make them riskier for new entrepreneurs in Kenya.
2. Q: How often should I conduct market research for my business? A: It’s recommended to conduct thorough market research before starting your business and then continue to monitor market trends and customer feedback regularly, at least quarterly.
3. Q: Are there any government programs to support entrepreneurs in Kenya? A: Yes, the Kenyan government has several initiatives to support entrepreneurs, including the Youth Enterprise Development Fund and the Women Enterprise Fund.
4. Q: How can I protect my business idea when doing market research? A: Consider using non-disclosure agreements when discussing your idea with potential stakeholders. Also, focus on validating the market need rather than revealing all the details of your solution.
5. Q: Is it better to start a business alone or with partners? A: Both approaches have pros and cons. Partners can bring complementary skills and shared resources, but also potential conflicts. Consider your personal situation and the specific needs of your business idea.

Quiz Answers:

1. a) Uber and Bolt
2. b) Predatory lending practices
3. b) Rise of smartphones and home internet
4. b) Central Bank of Kenya
5. c) Deforestation

Remember, while these businesses may be challenging, with the right approach and financial management, success is always possible. If you need help managing your finances while starting your business, consider applying for ZangCash Pay for assistance with bills, online transactions, and more. Your entrepreneurial journey starts with smart financial decisions!

 Sources, Facts, Citations, and Statistics

1. Kenya National Bureau of Statistics (KNBS): Reports indicate that nearly 20% of businesses fail within their first year due to various factors such as lack of capital and poor management.
2. World Bank: Highlights that regulatory challenges significantly impact SMEs in Kenya, making it crucial for entrepreneurs to understand the market landscape.
3. Business Daily Africa: Discusses the rise and fall of specific sectors and provides insights into what entrepreneurs should avoid.

References and Resources

1. Bizz.ke: Offers a detailed overview of businesses that are failing or have high risks associated with them.
2. Nairobi Diary: Provides an analysis of market trends affecting new businesses.
3. Money.ke: Insights into the economic landscape for entrepreneurs focusing on risky ventures.

Links

1. Bizz.ke – Comprehensive article analyzing the worst businesses based on market conditions.
2. Nairobi Diary – Overview discussing various sectors struggling within the Kenyan economy.
3. Business Daily Africa – Articles on business trends and challenges faced by entrepreneurs.

Citations: [1] https://nasonga.com/worst-businesses-to-start-in-kenya/ [2] https://businessinkenya.co.ke/posts/worst-businesses-to-start-in-kenya/ [3] https://nairobidiary.co.ke/worst-businesses-to-start-in-kenya/ [4] https://marketing.ke/worst-business-to-start-in-kenya/ [5] https://tribune.co.ke/worst-businesses-to-start-in-kenya/ [6] https://bizz.ke/post/worst-business-to-start-in-kenya-12-worst-businesses/ [7] https://money.ke/worst-businesses-to-start-in-kenya/ [8] https://www.tuko.co.ke/facts-lifehacks/432120-worst-businesses-start-kenya-the-top-10-list/