Starting a business can be exciting. You have an idea, you can already imagine the customers, the money and the freedom that could come with it. But before you spend your savings or announce your new business online, it is important to pause and ask yourself a few questions.
1. What problem am I solving?
A good business should solve a real problem or meet a real need. Ask yourself: Who needs this product or service, and why would they choose to pay for it?
Don’t start with only what you want to sell. Start with what people need.
2. Who is my customer?
Be specific. Saying “everyone” is not a business strategy. Think about your ideal customer’s age, location, income, lifestyle and needs.
For example, a business selling affordable work-wear may target young professionals in Nairobi rather than everyone looking for clothes.
3. What makes my idea different?
There may already be businesses offering something similar. That doesn’t mean you should abandon your idea. Instead, think about what you can do differently — better customer service, convenience, quality, pricing, location or a unique experience.
Researching similar businesses is an important part of business planning.
4. How much money do I actually need?
Calculate your starting costs before spending anything. Consider equipment, stock, licenses, marketing, transport, packaging, rent and other expenses.
Also ask yourself: How long can I operate before the business starts making money?
Having realistic numbers is more useful than simply saying, “I need capital.”
5. Can I test the idea first?
You don’t always need a huge investment to find out whether people want your product.
Try selling to a small group, taking pre-orders, creating a simple social media page or offering your service to your first few customers. Testing your idea can help you learn before committing more money.
6. Do I understand the market?
Take time to research your industry, competitors, prices and potential customers. For entrepreneurs in Kenya, resources such as the Kenya National Bureau of Statistics (KNBS) and Kenya Revenue Authority (KRA) can provide useful information about the economy, businesses and tax requirements.
Entrepreneurship involves more than having a good idea. You need to understand the environment in which that idea will operate.
7. Am I prepared for the reality of running a business?
Running a business can mean long days, uncertainty, difficult customers and months when things don’t go according to plan.
Ask yourself whether you are willing to learn, adapt and keep going when the initial excitement fades.
As entrepreneur and author Eric Ries writes, “The only way to win is to learn faster than anyone else.”
You don’t need to have everything figured out before you begin. But you do need to begin with your eyes open.
Good business planning doesn’t guarantee success, but it can help you make better decisions. So before you jump into one of the many business ideas in Kenya, take a step back, ask these seven questions and build from there.
Useful Resources
- Kenya Revenue Authority (KRA): Information on tax obligations and registration.
- Kenya National Bureau of Statistics (KNBS): Economic and business statistics for Kenya.
- Business Registration Service (BRS): Information on registering a business in Kenya.
- YouTube: How to Start a Business in Kenya — useful for beginners researching the practical steps involved in setting up a business.