Almost every one in five Kenyans now recognize that the cost of living has gone through the roof. To add insult to the damaging injury, there’s no cear indications that things may be better in the short term. The National Treasury recently made the situation look even bad. In the published government budget, experts see it as imposing more new taxes and raising existing ones. Could be these insistent cricusmtances forces us to deeply think about starting own business in Kenya.
Now, an adamant president William Ruto has insisted that the budget has to be approved as is. According to him and his administration, the budget is teh only surest way to deliver on the campaign pledges. These developments point to the fact that relying on salary alone can’t help much. Smart Kenyans remain out there scouting for business ideas and means of raising seed capital.
A properly established and structured business in Kenya make passes as a possible way to create wealth. Business people too have their fair share to deal with an underperforming economy worsened by sometimes unpredictable tax obligations. But this notwithstanding they still can adjust to get a margin, even if not so much.
Time to rethink your 8am to 4pm job as a Kenyan worker
It’s never too late to consciously decide and create a business that becomes an extra income stream. To become financially free never comes so easy. One needs to carefully analyze the market needs to get the best business idea. The decision is best to save you from plunging into debts and unnecessary loans.
You can agree that a morning to evening office job in Kenya at best places you on a payroll. Such jobs also make you more qualified to get bank loans or other credits. This possibility of loan advancement to employed Kenyans using their payslip as a guarantee may be a score for them. But on the flip side, it puts them at the risk of loan entrapment.
Design your own bottom-up in tune with the current administration
If the Kenya Kwanza administration invoked bottom up economics as a creed, maybe its version for personal financial security is business! business! business stupid. Instead of borrowing a loan for consumption and asset financing, choosing to do it for a viable business star up may just be the greatest choice you make in many years.
The trouble with starting a business in Kenya is that so many with great ideas don’t know exactly how to set up strong businesses that can operate across generations. You see business giants make presentations in front of champions of industry in shows like the KCB Lions Den or Shark Tank to pitch their ideas and wonder what that’s all about? They get to move the investors to trust their ideas or small businesses with the top dollar. All this is in the spirit of raising seed capital or expansion investment.
Shark Tank, Lion’s Den don’t accommodate all but other sources of business capital still exist
Whatever business idea you may have, it may turn out to be the most reliable source of income even more than your regular job. In times of widespread financial distress and turbulent economic indicators, some of the most unexpected of business ideas turn out to thrive and flourish. Yours may be that type of business. Don’t despite that idea because someone may be ready to put their money into it.
As a smart entrepreneur, its not a must to be formally trained but you can of course self train and see the trends in the business environment. To traditional to some of the less conventional sources of financing, you may get to fund your idea into a business that ends up providing employment to the many unemployed but qualified youth. Let’s explore some of these sources of funds to finance your own business ideas.
Funds from personal savings
Successful business people like Warren Buffet, Elon Musk, Jeff Bezos who rank in Forbes may tell you that the best asset for any entrepreneur is the idea itself. A cogent and clear business idea accompanied by a plan makes you supreme but with some own savings, you graduate to supreme pro max, if such a title exists.
It may not be easy to save up sizable finances from an already overloaded payslip to start up your own business . But if you really believe in the idea, at least it must dawn on you that before anyone puts their money in your idea, you must yourself believe in it so much as to sacrifice a saving for it.
Crowd funding in Kenya
The woes about how badly off people are around you may deceptively push you to thinking that there’s nobody to give out money to business ideas. If that was the case then the country and large businesses such as Safaricom plc and KCB that keep registering profits yearly would have already come to a grinding halt. In fact, the many brand new high end cars around would not be common scenes anymore.
Look here, you must create the business idea in such a way that’s compelling and not possible to ignore. Someone would advise that you ought to make the business appear as the best thing to have ever happened after sliced bread. When someone sees the value in it, they will be willing to put their money in it and trust that it won’t sink.
Crowdfunding sources/platforms in Kenya
Check out some of the popular crowdfunding platforms in Kenya and identify the best for you. It’s possible to use multiple sources as well provided that it’s not overambitious.
Approach and pitch to angel investors
You may already identify with the tag name ‘Angel’ as it portrays an entity that confers only good news to you as a business person. These investors keenly analyze the prospects of your business and see its life way ahead of time. Convinced that the returns will likely be tops, they put their money in it and without a hurry wait for the finances to grow.
You may not always have to seek an investor but through establishing a strong personal brand, the investor will without a doubt be willing to bet on your idea. The advantage here is that such people have great expertise when it comes to doing business thus through their help, it wouldn’t be tough going about your business. Nonetheless, you wouldn’t want to lose a part or the whole business which you have worked for years.
Make Sacco societies your trusted partners for your investment
The so-called ‘merry go round’ and ‘chamas’ have already gained a lot of popularity in Kenya over the years. The requirements for obtaining capital through Sacco societies is an active membership record and the amount of savings in your account. Also, most of the Sacco societies offer loans with favorable interests.
Stake your personal assets for your business sake
This is one of the most efficient ways of raising capital to start a business. People own property and items which are of significant value and sometimes they don’t really need them. Also, cutting down on living costs like moving into smaller living spaces or even walking to work instead of driving serves a great deal in raising capital.
Loans from digital lenders
The use of digital lending platforms have proven to be one of the fastest, efficient and flexible ways of acquiring loans. Just from a click of a button, one is assured of the preferred loan amount and with very friendly interest. The eligibility criteria slightly differs for different Digital Lending Platforms but the most fundamental one is the national identity number.
Important things to consider when sourcing for your Business capital in Kenya
The current stage of your business
Businesses grow in several stages; inception, growth and maturity. So, depending on the stage which your business is in, only specific financing will be available. In this case, when venturing into business it will be difficult to obtain capital through means such as bank financing because they require one to have reached a certain milestone.
The interest charged and equity ratio
When taking a loan where interest rates are applied, it is prudent to evaluate their interest rates for easy and efficient payment.
Assessing the stage in which the business is and the period for which you need the capital makes decision making easier on what type of financial requirement is needed.
General terms and conditions that apply
Before signing any funding document, one has to first understand its contents since it can attract very harsh legal implications. It is therefore wise to consult professionals such as lawyers to be on the safe side.