Guest Post By Patrick Kenyi
Starting a business can be a very exciting and liberating experience. However, that can all come to a screeching halt because of a simple mistake or detail that was overlooked. This article highlights 10 mistakes to be avoided when starting a business in Kenya.
- Failing to Prepare a Business Plan
A written business plan is absolutely paramount when starting a business. It serves as a blueprint that guides your actions, while enabling you to track your progress. Furthermore, it helps to secure financing for your business should you need it.
Many aspiring entrepreneurs make the mistake of failing to prepare a written plan, doing things as they come to mind. Using this approach is risky as it leaves plenty of room for mistakes and forgetting. Furthermore, it is very difficult to track your progress over time relying on memory alone.
- Failing to Conduct Market Research
It is very important to understand the market before launching your business. This will give you an idea of what is wanted, rather than what you think is wanted.
Failure to conduct adequate market research can be very costly down the line, potentially causing the business to shut down. For example, you may invest heavily in equipment, staff, etc. only to produce a product that people don’t want, resulting in heavy losses.
Therefore, it is vital to conduct research, and even test your products/services before starting a business. Not only will this give you a great understanding of the market, but it will also let you know where improvements could be made.
- Failing to Acquire Proper Documentation
Starting a business without the proper documentation can lead to a very quick and potentially expensive downfall. These include the business permit, fire safety certificate, food/health related permit, etc. The documentation required depends on the kind of business.
It is therefore very important that you familiarize yourself with the documents and follow the legal procedures. The information can be found online.
- Starting with Inadequate Funding
Starting a business is usually not a cheap endeavor. Furthermore, most businesses don’t make profits for a while after launching. Therefore, starting a business with insufficient capital can lead to serious problems later on.
To prevent such issues, you will need to determine and secure the funding required to get things going. This amount should cover both business and personal needs during the startup period. There are several profitable businesses that can be started in Kenya even with a small budget.
- Trying to Do Everything Yourself
Running a business usually involves so many tasks that you simply can’t do it all yourself. Even if you had all the skills required, you would still be limited by time and exhaustion.
That is why it is important to share the responsibilities with others. Not only is it more efficient to work as a team, but it also gives you access to a wider pool of knowledge and skills.
- Mixing Business with Friendship
When starting a business, it is important to draw the line between business and personal matters. Keeping things professional helps to avoid interpersonal issues later on. In fact, many businesses have been brought to their knees because of internal issues between friends.
It may seem like a good idea to work with your friends at first. However, this has often led to disputes over ownership, task delegation, decision making, and so on. Additionally, it is more difficult to challenge or criticize close friends.
- Neglecting to Sign Contracts
Signing a contract is crucial if you intend to work with other people. This is because written contracts are tangible, thus carrying more weight than verbal agreements.
Even though you trust the people you’re working with, things could always take a turn for the worse. Countless relationships have ended on a very bitter note. It is therefore advisable to protect yourself in case things go downhill.
- Getting Too Attached to The Idea
It’s great to love what you do, but also very important that you understand things don’t always work out as planned. A huge mistake that many entrepreneurs make is sticking to a failing plan rather than adapting to the circumstances.
- Undervaluing Your Products
Many entrepreneurs make the mistake of pricing their products too low, or even giving them away for free to gain market share. Although it is done with great intentions, this can quickly lead to a downward spiral as people exploit your kindness.
Such marketing tactics should be carried out carefully, and according to a well-developed plan. It is also vital to ensure you can afford such a campaign before implementing it.
- Underpaying/Overpaying Yourself
Figuring out a fair amount to pay yourself and your partners can be a tricky, but essential, process. Underpaying or overpaying yourself, or others, can lead to disputes, lack of motivation, a poor reputation, and possibly even legal problems.
