What could be the worst business to start in Kenya right now? Well, with taxation at a record high, the list could be longer than you thought. Starting a business is a thrilling pursuit and as entrepreneur you need to know what to venture into and what not to venture into. A very valid reason for the existence of worst business to start in Kenya right now could be over taxation but let us not forget there are business that have gone under over time with or without taxation. Reasons could be consumers found an alternative, reputation got ruined or maybe just some external economic factors such as depression.
This is not a blog post to monger fear, spread fake news or negativity against certain businesses, this is a blog post meant to enlighten and act as a reminder that there are cautionary tales that serve as a stark reminder of the risks involved in starting a business. Let’s explore the worst business to start in Kenya right now or even some that used to be profitable but are no longer profitable and why they could spell disaster for aspiring entrepreneurs.
So what is the worst Business to start in Kenya right now?
I have sampled 5 risky businesses right now but the list could be longer.
Car and Motors
Being a developing nation, Kenya does not manufacture cars, it’s only capable of assembling. Hence starting a business heavily reliant on imported goods like cars and motors can be risky due to currency fluctuations, import taxes, and customs regulations. High transportation costs and potential delays at ports can also impact the supply chain. Import tax is normal for any commodity not just cars and motors but with recent increase in tax for any imported goods and the amount of money involved in the nature of this business makes it harder to venture into the business of cars and motors right now.
Tours and Travel
While Kenya is known for its vibrant tourism industry, tours and travel is among the worst business to start in Kenya right now. Not just over taxation but businesses solely dependent on tourism can face challenges during economic downturns or global events that impact travel. Diversification or contingency plans may be necessary for businesses tied to tourism.
Pyramid Schemes
Pyramid scheme is a blanket term for any business that promises ambiguous profits for instance a triple return on investments—which is not ideal. Such business have existed in Kenya before and Kenyans have become skeptical. Some of the most recent examples are aim global and public likes which ended up scamming Kenyans their hard earned money. And that is the thing with pyramid schemes, they have ruined their reputation as such you won’t start such a business and last even two days before Kenyans are on your neck.
Pyramid scheme is definitely up there as the worst business to start in Kenya because promising quick wealth by recruiting members rather than selling a legitimate product or service will just not work in Kenya I am sorry if you have been thinking about this. These schemes are inherently unsustainable and often lead to financial ruin for those involved and with hard economic times who do you think will fall into the trap of losing the little they have?Furthermore,engaging in such ventures not only jeopardizes your financial stability but also your reputation.
Betting and Gambling
Aside from the heavy taxes on betting activities in Kenya, the betting industry lack proper regulation and just a slight changes to these regulation may ruin your entire business. Starting a business in sectors without proper regulations or oversight can lead to legal issues.
Selling Eggs in Wholesale
While selling eggs is deemed to be profitable, selling eggs in wholesale is one of the worst business to start in Kenya right now. Kenya import most of its eggs and with increase on tax of imported goods it’s not easy to run this business on wholesale basis. Taxation and competition by small scale farmers all have a hand in affecting the wholesale business of eggs.
As a businessperson, you purchase a tray of eggs for Ksh 330, anticipating a resale at Ksh 450. However, when your stock is halfway, small-scale farmers start selling eggs at Ksh 280. Consequently, you lower your selling price to clear stock. If done on a retail basis, price fluctuations have a smaller impact because consumers prefer buying in smaller quantities during financial constraints. Eggs are not a staple in Kenya, so when prices rise, people opt for cheaper foods. Imagine consumers choosing more affordable options during tough economic times when you have 100 trays in stock.
While the viability of a business idea can depend on various factors, including local market conditions and economic trends, these 5 businesses have been heavily affected by taxation in Kenya. It’s crucial to note that the tax adjustments don’t necessarily make these businesses impossible to run successfully because just like with inflation, consumers will always adjust.
Entrepreneurial spirit will often urge you to venture into anything profitable but hey not all business ventures are worth pursuing. It’s essential to conduct thorough research, evaluate the market, and make informed decisions to maximize the chances of success. The 5 are just a fraction of the worst business to start in Kenya right now. Businesses are affected by a lot more than you think—right from politics, emergence of alternatives, wars to poor marketing.
