It’s an open secret that new businesses in Kenya fail. It’s a global phenomenon though. It has little to do with any unique attributes of Kenyans; like being unromantic or other stuff people make up. Below are the 5 main reasons for this.
1.Poor management
Most new businesses owners not only lack experience but also lack expertise regarding managing business. This is true even if the industry is familiar to the entrepreneur. The result of this is poor management practices that cripple the business before wiping it out.
When managing a business an entrepreneur should pay attention to the functions of planning and coordination. Your business plan should be realistic in detailing the vision and goals. You should also anticipate problems and their solutions as part of strategic management. Lastly, coordinate activities of business for a smooth experience.
2.Lack of business systems
Related to management is the establishment of business systems. We covered, in depth, the importance of business systems. Basically, it’s about learning to get your claws off your business; when and how to do it. If you are unable to do this, the business will stretch you thin and collapse in you.
An aspect of setting up a system is recruiting employees. New businesses in Kenya fail because owners make poor recruiting decisions. The consequences of this include things like high employee turnover or employee fraud as an oxymoronic system.
3.Cash problems
Under-investment is a big problem for entrepreneurs. Leaving aside inability to raise the required capital, many entrepreneurs underestimate how much money they’ll need at the start. Sometimes this is because of ignorance while other times it’s because of arrogance. It doesn’t matter which of those is a root cause, if you live things hungry they die.
Remember planning? Be prepared to deal with this situation. One way is having an emergency stash like you do for your personal finances. Do also track your business’ money; you can use a range of software programs to help you undertake this.
4.Selling yourself short
Technical souls believe that marketing people get way too much credit; for things. That’s an issue for another day. Fact is, though, that even the best products need to be promoted; it’s a sad world. If you don’t place your products or services in the right manner there will be no revenues generated.
A prequel to having customers know that your business exists is the brand. First of all stick to your brand. This will help you sell the right quality to the right people at the right price. A physical representation of this is choosing the right location for your business.
5.Culture shock
It’s seems unbelievable that in a country where nobody can reject a bribe anything can be shocking. New entrepreneurs though can be shocked by how running a business turns out. Many actually expect to be successful fast in their get-rich-quick delusions. When this does not happen there perseverance wears thin and they wrap up.
Another shocker is how difficult it can be, for an entrepreneur, at the beginning. On top having to be everything in the business you have to be involved in administrative duties. Mundane administrative duties that never end; like housework. This goes against expectations of Friday afternoons spent wandering away after a week of signing off important stuff.
