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10 Reasons Why Most Kenyan Business Fail

Kenya is currently a business destination point for many people looking to start one type of business or another in Africa. This migration is a result of the country’s abundant human, natural, and material resources.

Kenya is one of Africa’s fastest-growing economies, with a robust GDP that is expected to rise steadily in the coming years. Small business opportunities abound in the country, and start-ups can be found around every corner.

Most people do not consider failure when they start a business. However, starting and operating any business in Kenya carries the risk of an unfavorable outcome, which occurs more frequently than most people realize.

According to SBA research, a significant percentage of business start-ups fail within the first year, and by the tenth year, only about 33% are still doing well. These figures could be discouraging for anyone considering starting a business in Kenya.

Although there are numerous reasons why organizations fail, many new business owners frequently make the same mistakes. Here are ten of the most common reasons for business failure and how to avoid them.

1. Lack of Business Foresight

Many people who start a business in Kenya aren’t in it for the long haul, but rather to find work. This is due to the country’s high unemployment rate. Many entrepreneurs do not plan for the future because they have this mindset.

An enterprise that is not built to outlast its founder will fail because its goal is immediate gratification rather than long-term growth.

With no plans to save for the future, the majority of the business’s capital will be spent on subsistence, and a desire to continue may emerge when it is too late to save the failing company. A successful businessperson must have a long-term strategy in place.

2. Under-delivery of  Business Value

People want to buy products or services that are useful to them. You won’t be able to build a customer base that wants to buy from you if you can’t demonstrate that what you offer is worth their money. Rather than sharing facts and figures, share the outcomes of doing business with you to demonstrate value.

Customers will buy your solution if they see that you can assist them in resolving a problem. Adding unique value to your business will create a buzz that will attract and keep the money crowd. Also, aim to under-promise and then over-deliver. This will encourage satisfied customers to return.

3. Inability to identify the appropriate target audience

A solid sales strategy includes targeted marketing. If the right people can not see your products or services, your business will fail. If you can’t connect with the right demographic for your business, it means you don’t know who your products/services are for. Your business will not be able to grow or thrive unless you;

  • Understand who your intended audience is.
  • know where to meet them.
  • know how to pique their interest.

Market surveys, focus groups, and e-mail campaigns can help you better understand and connect with your target audience. Knowing what they want, as well as how and when they want it, will help you tailor your business for long-term success.

It is also critical to keep track of your leads and try to convert them into clients. Check out our lead management tool.

4. A lack of originality and passion

In Kenya, there is a tendency to simply copy and paste other people’s successful business ideas. Starting a business because your neighbor is doing the same may not result in the same level of success for you. How can you succeed if you are unaware of the challenges that the other person has faced and overcome?

While it is not a bad idea to imitate a successful competitor, it is necessary to learn from them by understanding how they got to where they are. Doing proper research and due diligence will allow you to keep your business thriving for a long time.

Overall, it is preferable to select something in your area of expertise and then improve it. This will give you the skills and the passion you need to succeed.

5. Ineffective Sales Funnel

An effective sales funnel that converts interested prospects into buyers or clients should be a top priority for any business owner. After tools like good copy, blogging, and social-media paid ads make visitors aware of your business, you must maintain their interest until they complete a sale. This procedure can be automated. An effective sales funnel will;

  • Assist in the development of a relationship with your customers.
  • Tell them what you’re up to.
  • Make a pitch for your products or services.

A successful business also incorporates several other automated business tools to avoid an overwhelming amount of work. Using automation, CRM (Customer Relationship Management) software, financial audits for businesses, and analytics results in an optimized workflow that promotes better sales.

6. Inability to Build Trust

A business that is not perceived as transparent or authentic will fail. If you lose a customer’s trust, you will also lose their money. As a result, it is critical to prioritize being trusted to be honest, credible, and transparent.

This is the fundamental tenet of branding, which is critical for organizational growth today. A good reputation will add more value to your goods and services over time, cementing your position as a trusted brand in the Kenyan marketplace.

7. Failing to keep up with the competition

Staying afloat in Kenya’s highly competitive business space can be difficult if you can’t stay relevant. Despite the presence of larger corporations in the same niche, small businesses must compete with one another and find a way to stand out.

Consistently updating your knowledge and developing a distinct and adaptable marketing strategy will help you stand out from the crowd.

8. Lack of Financial Discipline

The primary goal of running a business is to make a profit – to make more money than you spend. As a result, the ability to control your expenses is critical to running a successful business.

Paying for frivolous and personal matters should not be a part of your company’s budget. Financial illiteracy is one of the most serious threats to new businesses in Kenya. A good financial plan, proper auditing, and tracking business expenses will keep your spending to a minimum.

9. Ineffective Leadership in Business

Many Kenyan entrepreneurs enter the business world with little to no knowledge of how to manage business demands. Luck can only take you so far and will not sustain your business for many years.

Even large corporations can struggle to find the right people to provide strategic and effective leadership for the teams that help them succeed.

Having a trusted mentor, using available resources to learn how to lead effectively, or having a board of seasoned advisors is the solution to this problem for any business that is serious about long-term success.

10. There is no corporate culture.

The establishment of company culture is critical for the long-term success of any organization. A successful organization must have a clear vision and mission statement that represents what it provides. Having such a solid foundation will allow entrepreneurs and employees to run the business consistently.

This ensures longevity because adhering to core values over time results in a brand that customers can recognize and trust. A team that is working toward a common goal will also connect better.

Inclusive

company culture will increase employee loyalty and retention, resulting in better and more consistent sales.

Don’t let yourself become a Grim Statistic!

An unbreakable business strategy will help you avoid the pitfalls that send many Kenyan businesses into a tailspin in their first year of operation. In this digital age, following best practices will give you consistent success and ensure the steady growth of your organization.


Are you a new or established business in Kenya? Do you want to be a part of the digital organization landscape in East Africa’s booming economy for many years to come?

At Feels Good Company, our team of experts creates cost-effective, customized content that increases your visibility, traffic, and helps you convert leads into measurable success. Contact us today for a value-added copy that will keep you at the top of your business niche for many productive years!

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Kelvin K.

Kelvin K.

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