• June 1st, 2012
  • Posted by athanne

The Challenges of Running a Small Business in Kenya

300x250 2 The Challenges of Running a Small Business in Kenya

Starting and operating a Small Business in Kenya includes a possibility of success as well as failure. Because of their small size, a simple management mistake is likely to lead to sure death of a small enterprise hence no opportunity to learn from its past mistakes. Potential clients perceive small businesses as lacking the ability to provide quality services and are unable to satisfy more than one critical project simultaneously. The challenges of running a Small Business in Kenya include,

  • Lack of Education,
  • Infrastructure,
  • Improper Financing,
  • Lack of Experience
  • Competition
  • Poor Security
  • Hawkers

 

 The Challenges of Running a Small Business in KenyaLack of Education as one of the challenges of running a Small Business in Kenya

Lack of Education is one of the factors that affect running of a Small Business in Kenya. Those entrepreneurs with larger stocks of human capital, in terms of education and vocational training, are better placed to adapt their enterprises to constantly changing business environments. Only a small proportion of the business owners have reached university level or above.. It can be proved that Small Business in Kenya owners are dominated by people with relatively low levels of education.

 

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Infrastructure

Another challenge that has posed running of a Small Business in Kenya is Infrastructure. It relates to provision of access roads, adequate power, water, sewerage and telecommunication which has been a major constraint in the development of Small Businesses in Kenya.

Improper Financing as a challenge to running  a Small Business in Kenya

Improper Financing is yet another challenge in running a Small Business in Kenya. Most of these owners lack enough capital to run their business and also lack of collateral to give to banks when they need to take loans.

 

Lack of Experience as a challenge to running  a Small Business in Kenya

Lack of Experience is a challenge to running  a Small Business in Kenya. There is need to improve ways of gathering customer information for the purpose of personalized marketing and service. The more a business owner knows about its customers, the better they can meet their needs, thus the more successful a business will be.

 

Competition as a challenge to running  a Small Business in Kenya

Competition has proved to be yet another challenge facing the running of a Small Business in Kenya. Large scale companies tend to attract more of the clients in their area of specialization. This poses as a challenge because small business owners spend a lot of time fighting for the clients attention and this time could have been used in expanding the businesses.

 

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Poor security as a challenge to running  a Small Business in Kenya

Security threats pose a great challenge to Small Business in Kenya and many business owners and managers employ various means to help prevent or deter would-be criminals. They are forced to make use of security firms or guards to safeguard their businesses which can be very expensive.  Most of them close early to avoid thugs while others opt to carry their stocks home while some sleep in their business premises as a security measure. This implies higher cost of doing business as they respond to the security challenges.

Hawkers as a challenge to running  a Small Business in Kenya

Hawkers pose as a challenge to running a Small Business in Kenya their businesses. As a response to this challenge, business owners have been forced to sell cheaper than the hawkers.  Competing with hawkers on price is debatable since hawkers are known to sell cheaply.  Selling of a variety of goods was also said to be a strategy employed by small businesses to counter the challenge posed by hawkers.

More reading can be found in Business Training in Kenya

Conclusion and Recommendations on running of a Small Business in Kenya

First small businesses in Kenya should have a ‘global outlook’. Businesses of all sizes across the globe can interact and share information, technology and products.

Small businesses in Kenya should consider what global trends are affecting availability of resources, increasing or decreasing demand for products or service and where there is an unfilled need one might be able to meet.

Government should provide information on ongoing business trends.

There is also need to get trained in an area that is relevant to the business carried. This survey has clearly shown managers with relevant training run successful businesses compared to their untrained counterparts.

There is need to improve ways of gathering customer information for the purpose of personalized marketing and service. The more a business owner knows about its customers, the better they can meet their needs. All these information gives a better understanding on running of a Small Business in Kenya

 

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