How to Start a Business in Kenya with Little or No Capital

The ultimate guide to starting a small business in Kenya with small capital

Starting a business can be a life changing endeavor if done properly. Many people shy away from the idea because it seems too risky, and there’s no denying that it is, but the potential rewards outweigh the risks.

Can you imagine what your life would be like if you had your own successful business generating seven figures a month, having the freedom to work on your own schedule and taking vacations whenever you please?

That’s what a successful business can do.

Many self-made millionaires and billionaires living their best lives attribute their success to the businesses they built, not to being employed.

This articles will look at 6 realistic steps you can take to start and grow a business in Kenya if you have little or no money. You can also check out these fantastic business ideas that you can start with a small budget. 

Starting a Small Business in Kenya

Step 1: Define your Vision

A vision is a definition of success, where you’d like to be years in the future. Take some time to envision what success would look like for your business.

What sort of impact would it have to your community, to customers, to employees? How would you reward yourself for its success? How will you upgrade your family’s quality of life?

Write down your vision on a piece of paper, save it on your computer and on your phone. Whenever things get challenging, take a look at it to remind yourself why you’re doing what you’re doing.

Your vision should be the reason you wake up early, put in hours of hard work and go to bed late in the night. It should be personal. Here are some great examples of vision statements.

Step 2: Conduct an elaborate market research

Taking the time to do some careful research will tell you whether the business is worth pursuing or not. More often than not ideas sound better in our minds than they actually are.

You’ll need to research your business’ viability and whether there’s a market for, access to raw materials; if you’re opening a physical business, you’ll need to research locations; if you’re opening a restaurant, you’ll need to research your dishes.

Every little aspect of the business has to undergo some sort of research. Always assume that you don’t know anything and you’re looking for answers.

You’re research should make it clear whether there’s a gap in the market that your business can realistically fill or you have to go back to the drawing board. The last thing you want is to waste your precious energy building something that simply has no chance of success.

Step 3: Bootstrap your early growth

Lack of funds is one of the main obstacles that prevents people from starting a business in Kenya.

Bootstrapping means to completely disregard this lack of capital and start your business using only the resources and expertise that you have available at hand.

Whether that means working from home instead of renting an office, doing the work yourself instead of hiring, using social media for marketing instead of spending money on a full blown ad campaign, using your savings to pay for small expenses instead of borrowing money, etc.

This step takes the place of fundraising because you are only counting on what you’ve got. The advantage of bootstrapping is that you will have no loans, no shareholders or investors that own a stake in your company.

Remember that this is only a short term strategy that’s meant to help the business get off the ground without relying of outside capital.

Most self-made millionaires and billionaires that come from humble beginnings can attest to the power of bootstrapping.

Related: 40 Small Businesses to Start with Little or no Capital

Step 4: Test the market with a simplified version of your product

The only way you can truly know whether a product makes sense is by actually building it (or a version of it), and then placing it in front of prospective customers to see what their reaction will be.

For example, if you’re planning on opening a restaurant, you can prepare all your menu dishes and then serve it to your friends and family to get their opinions.

If you want to open a shoe shop, you can first try sell the shoes on social media and online marketplaces to see if people would actually be interested.

This is an important step because it eliminates the risk of wasting resources to build an entire business, only later to find that it’s not going to work. Testing the market also allows you to collect useful feedback that you can use to improve the quality of the final products.

In the example of the restaurant, if you find that people are commenting on how small your portions are, then you know it’s something you have to address before opening to actual customers.

Step 5: Start building your brand

If the results from your market research are positive, congratulations, you’re ready to start building a real company.

A successful market research is your assurance that you’re on to something; the ground has been cleared and you can go all in.

The first steps are to register the company, get a logo, a website, social media pages and professional email addresses. Besides company registration, all these other tasks can be achieved either free or inexpensively.

Getting a Logo

Head over to Fiverr to get a professional graphic designer to design you a logo for you for just $5. Fiverr is the most popular marketplace in the world for professional services. Use this link to get 20% off your first order.

Getting a website

Websites are absolutely fundamental, they are your little piece of real estate on the internet. The first place that modern consumers go search for products or services they need is the internet, a website makes it easy for people to find you.

You can get your entire site built for you for free at Free Web Design. You will also get a free domain e.g. www.your-domain.com and 5 custom emails e.g. [email protected].

It doesn’t matter what products or services you’re selling, a professional website and email make you look credible, and that instills confidence in your prospective customers.

Registering your company

The company registration process is actually very simple and straight forward. Here are the requirements for registering a company in Kenya:

• Proposed company name
• Objectives of the company
• Names of the shareholders and directors
• Contacts (Postal address, email and phone Number of the shareholders and Directors
• Number of shares that will be held by each shareholder
• Physical address of the company
• Copy of ID / Passport of the Shareholders and directors
• Passport photos of the shareholders and directors

Once you have registered business, you have a website and social media pages, your products have been successfully market tested, it’s time to start spreading the news!

Step 6: Marketing

Marketing is a creative art form that can be carried out in a myriad ways. Since our goal is to start a business in Kenya with little or no capital, we’ll take the growth hacking route.

Growth hacking means to achieve rapid business growth within a relatively short time, and by using whichever means necessary.

Traditional marketing approaches usually have a broad focus and uses text-book tactics to achieve their goals. Growth hacking is simply doing what you have to do (in an ethical sense, of course), very few rules apply. The only thing that matters is growth.

There are so many marketing resources that can be leveraged to reach millions of prospective customers without breaking bank. Social media is just one.

Check out this article to learn how you can get up to $500 worth of online advertising credit free.

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Brand building is an ongoing process will last the lifetime of your business. Even the largest companies in the world like Google and Amazon and still pouring billions into building their brands.

Have fun with it, try out different marketing tactics, if one thing doesn’t work, don’t despair, just try another.

Dedicate the first year of business to growth over profitability. Continue bootstrapping until you can afford to hire or outsource some work. Revert any little income generated into the business. When things get tough, have a look at your vision to remind yourself why you’re doing it in the first place.

Building a business in Kenya is not an easy task, more so if you’re doing it with little or no capital, but in the end it will all be worth it.