The Mitumba industry has stood the test of time as one of the most lucrative business opportunities in the country, currently employing over two million Kenyans in the country.
Due to its large contribution to the economy, the Mitumba business continues to take in new entrepreneurs every year, ranging from suppliers to transporters and vendors.
While launching a Mitumba business can be quite profitable , there are some mistakes that may hinder your entreprise from taking off, and without the right approach , you may lose time and resources trying to recover from the setbacks.
Here are some common mistakes business people make when starting a Mitumba business and how to avoid them.
1. Poor Market Research
Before staring any business, detailed research is paramount as it helps you understand market dynamics and customer demographics to help you decide what niche to venture in. Failure to conduct research leads to stocking unsellable items as you do not understand local demand or preference.
To mitigate this, ensure that you identify factors that set your business apart from the rest , such as the goods you intend to sell, the location of your enterprise and the customer demographics such as age and income capacity.
2. Inadequate sourcing
Relying on unreliable suppliers or failing to ensure quality can affect business reputation and customer trust. This can also arise when you are too trusting of your supplier who dabbles in unscrupulous deals, duping you into getting substandard goods.
Make sure that you have direct links to reputable and reliable suppliers and inspect the commdities in-person while still at the warehouse or supply centre to avoid purchasing undesirable items.
3. Pricing Issues
Setting prices too high or too low can impact your sales and profitability. It is important to balance affordability with profit margins so that you do not exploit your customers and at the same time avoiding incurring losses.
It is also important to educate yourself on the various categories of second-hand commodities so that you can price your goods accordingly. Mitumba items are categorized into grades depending on quality and condition, and the categories include Grade A (excellent condition), Grade B (good condition), Grade C (noticeable wear), Grade D (heavily worn), and Cream (premium condition).
4. Lack of Proper Storage
Poor storage conditions can damage the clothes, affecting quality and sales. Ensure that you store your items are tucked away in a storage facility protected from natural elements such as rain and sunshine to prevent damage, maintain quality, and ensure they remain appealing and sellable to customers.
Ensure that there are safety measures in place in the event of emergencies such as fire and floods.
5. Neglecting Customer Service
Customers are the essence of the business and treating them poorly can drive them away, impacting repeat business and referrals. It is therefore best to be alert on how you interact with your clients as well as keeping in mind their demands and preferences to grow your customer base.Great customer service propels marketing of your business, increasing reach and bringing in new clients.
6. Failing To manage Finances Well
Inadequate bookkeeping or mismanaging finances can bring up cash flow issues and potential business failure as you fail to account for where you are gaining or losing money.
The mitumba business can be very unpredictable as profit margins differ depending on the target clientele , so managing finances is important as it aids in understading how to manouver business operations such as restocking, or saving up for emergencies. In the long run, you are able to scale and grow the business.
7. Ignoring Legal Requirements
Entrepreneurs who do not adhere to regulations such as permits and taxes set themselves up for failure as it leads to troubles with authorities. Ensure that you comply with the County Government’s law and regulations and obtain the requisite licences and permits to avoid legal problems and consequent closure of the business.
With the right business strategy, the Mitumba business can be extremely profitable, as the demand for thrift items is always high due to the vast variety and uniqueness. Following the above guidelines is a sure way of ensuring that your business picks as soon as it launches, and to help you avoid setbacks that stiffle the growth of your business.
