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The Worst Businesses To Start In Kenya

Best to avoid them

BY Mercy Kipchilat

Feb 07, 2023, 07:35 AM

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In a country where the rate of unemployment is ridiculously high and the cost of living is almost unaffordable, starting a business seems to be the only way to survive and beat the system. However, starting a business is not easy.

Choosing a business to invest in can be a nightmare because one bad decision could result in you losing your money and starting all over isn't easy.

If you are looking to start a business, here is a list of some of the worst businesses to start in Kenya that you should avoid at all costs.

1. Matatu Business

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Going into a matatu business could be the worst business decision you ever made. Even though there is always money pouring in, the catch is, there is a lot more pouring out. 

First, there are the daily bribes to the men in blue. It's the norm. In fact, no one is shocked anymore by the vice. And, if a temptation to be a patriotic Kenyan takes hold of you and you decide not to give the police their "cut", you will rue the day you were born. They will manufacture charges out of the thin air, and increase your suffering tenfold. Smart matatu owners have learned to simply give the police what's theirs- allegedly.

Apart from the bribes, you will also have to contend with Sacco fees, parking fees, constant repair costs, and the matatu crew who will rob you blind without a moment's notice. Crazy right? All sorts of characters will seem to be benefiting from your business investment except you!

So, forget about the matatu business and keep looking. Word on the street is, it's for money “washers” anyway.

2. Betting Firms

Betting firms may seem lucrative but please, save yourself from blood pressure and heartaches and desist from investing in one, unless of course, you have deep pockets as it is one of the worst businesses to start in Kenya. 

First, there is the prohibitive taxation by the government. Betting firms are currently charged at over and above what other businesses are charged.

Then there is the cutthroat competition. With many betting firms mushrooming all over both online and physically, it's only logical that only the big fish, will take a huge chunk of profits, and you along with other small fish will scramble over leftovers.

Finally remember you will also need to bribe government officials constantly, and you will need to live with the societal judgement that you are profiting from other people's destruction. 

Is it really worth all the hustle?

3. Tendering To The Government

Tendering with the government, especially the county governments should be included in the 1000 ways to get blood pressure, and die as it is among the worst businesses to start in Kenya. 

To start off, getting a tender is not a walk in the park. You will have to literally know people to "push" for you, from the inside if you want to stand a chance.

Next, you will need to have a verified company, which in itself has a list of requirements, as long as the letters of the alphabet. 

If you are lucky enough to get a tender, be prepared to sink in a huge capital investment. 

Now, assume that you have completed the project successfully, your next phase of disappointment, and agony begins- payment. You will be taken in circles by arrogant government officials, with excuse after excuse. Remember suppliers will be at your throat, demanding for what is theirs.

Forget about the flashy lifestyles of a few tenderpreneurs, the reality is much different, government tenders will leave you flat-broke and in debt. 

4. Cyber Cafes

Cyber cafes were once profitable businesses but now they are among the worst businesses to start in Kenya. The advancement in technology, especially smartphones, laptops, and cheaper internet bundles has rendered them obsolete. 

Why go to a cyber cafe when you can do close to everything with your phone? Be it downloading documents, sending applications, scanning documents, and even payment of services. 

5. Bookshops

Photo by Stanislav Kondratiev
Book shops have also suffered a tragedy similar to cyber cafes: technology.

There are thousands of e-books and online libraries that cost a fraction of what bookshops charge. In most cases, you may only need internet bundles to download your newest read from your app. 

So, bookshops are closing down but at least there will be more trees.

6. Colleges

The high cost of overheads while running a college is what makes it not so lucrative as a business.

To start off, you will have to pay salaries to tutors and support staff which will significantly eat into your earnings. Next, there is the cost of renting the premises, electricity bills, printing costs, taxation, and a dozen more bills which will see your profit margin dip even further.

Another challenge that makes colleges one of the worst businesses to start in 
Kenya is stiff competition. There is always a college coming up around the corner. But for every college opened, three more are closed down. 

Established colleges are however doing much better but in essence, they are all struggling especially since the entry grade to the university was lowered to a C+.

7. Travel agency

While travel agencies seem to be mushrooming everywhere at any given point, investing in one, might not be the best idea.

It's ridden with competition and as with many businesses, the more established ones will hedge out the upcoming ones with better deals and offers.