Starting a business in Kenya [2024 - Edition]

From tourism to tech, the possibilities to start successful businesses are vast. This blog post explores some top business ideas suitable for the Kenyan market, highlighting essential considerations such as bookkeeping, taxes, and certifications, and provides a guide on how to register your business using the eCitizen platform.

Top Business Ideas for Kenya for 2024

Here are the top 5 ideas:

1. Travel Agency

You can create a travel agency that specialises in reviewing and booking foreigners into Airbnbs. Your services would entail assisting travellers in finding the best Airbnbs based on their preferences and needs. You can also consider providing additional services such as airport pickups, travel itineraries, and local guides as most Airbnb owners are not interested in this additional but very important services.

To get started, you need to partner with local Airbnb hosts to offer exclusive deals and packages and provide personalized recommendations and customer support to ensure a smooth travel experience.

Estimated Startup Cost: KSh 20,000 - KSh 50,000

2. Tour Company

Your tour company will focus on offering comprehensive tour packages including rides to national parks. You could start by organizing a tour to the Nairobi national park. After a few trips, you will be able to offer guided tours, wildlife safaris, and adventure activities to other places like Ngong Hills or Mt. Kilimanjaro hikes.

You simply need to higher a nice 4x4 to provide comfortable transportation, print out some knowledgeable guides, and curate post-experiences that highlight the unique wildlife and natural beauty of Kenya. You may include additional services such as photography packages to boost your margins.

Estimated Startup Cost: KSh 50,000 - KSh 150,000

3. Human Content Writing

Your offer would be writing high-quality content and blogs for businesses. You can focus on creating engaging and informative content for websites, blogs, and social media platforms. While you can utilize AI tools for research and initial drafts, the key emphasize would be on the human touch to add a unique voice and personality to the content.

You need to highlight how a human writer can create more relatable and authentic content, separating it from AI-generated content that often lacks emotional depth and creativity.

Estimated Startup Cost: KSh 5,000 - KSh 15,000

4. Social Advertising

Build your own advertising agency on popular platforms like TikTok and  monetise using platforms like Wowzi. Your task would Develop and manage advertising campaigns on TikTok via Wowzi, and other social media platforms.

Creating content for TikTok is not easy, but at least with Wowzi, you will not only be able to earn but also be able to provide comprehensive analytics and reporting to track the effectiveness of campaigns.

Estimated Startup Cost: KSh 20,000 - KSh 80,000

5. Social Ecommerce via WhatsApp statuses

This entails advertising on WhatsApp statuses and converting viewers into customers. Your task will be hunting for unique products on platforms like Jumia then advertising them on your WhatsApp status updates. When your viewers engage, you can go ahead and purchase the product and ship to them as a middle man.

You will need to develop strategies to maximize engagement and conversions from WhatsApp status.

Estimated Startup Cost: KSh 5,000 - KSh 20,000

Key Considerations for Starting a Business in Kenya

1. Importance of Good Book keeping

Good bookkeeping is critical for any business. It helps track income and expenses, monitor cash flow, and make informed financial decisions. Proper records are also essential for tax purposes and financial audits. Invest in reliable accounting software and consider hiring a professional accountant to ensure accuracy and compliance.

Some of the recommended book keeping tools are:

1. Zoho Books
2. Quick Books
3. Uhasibu

2. Compliance with Kenya Revenue Authority (KRA)

All businesses in Kenya must comply with tax regulations set by the Kenya Revenue Authority (KRA). This includes registering for a Personal Identification Number (PIN), filing tax returns, and paying the required taxes. Non-compliance can result in penalties and legal issues. Stay informed about tax obligations and deadlines​.

Ensure you also familiarise yourself with eTims.

3. Certification by Relevant Authorities

Depending on your business type, you may need certifications or licenses from relevant authorities. For example, a travel agency might need certification from the Ministry of Tourism, while a food truck business would require health and safety permits from local health departments. Ensure you obtain all necessary certifications to operate legally​

4. Accessing Capital through USSD Lending Apps

USSD lending apps like M-Shwari, Tala, and Branch provide quick access to loans, which can be useful for starting or expanding your business. These apps offer short-term loans with flexible repayment terms, making them an accessible option for many entrepreneurs. However, be mindful of the interest rates and ensure you can manage the repayments.

Common Questions About Starting a Business in Kenya

1. How Do I Choose the Right Business Idea?

Identify your interests and skills, conduct market research, and assess the demand for your product or service in the market. Analyze the competition and consider the startup costs and potential profitability.

2. What Legal Requirements Must I Fulfill?

Register your business through the eCitizen platform, obtain necessary permits and licenses, comply with KRA tax requirements, and ensure you have health and safety certifications if required.

3. How Do I Access Funding for My Business?

Explore various financing options such as personal savings, bank loans, angel investors, venture capitalists, and crowdfunding. USSD lending apps can also provide quick access to capital for small-scale businesses​.

4. What Are the Costs Involved in Starting a Business?

The costs vary widely depending on the type of business. For example, starting a mitumba business may cost as little as KSh 1,000, while a food truck could require up to KSh 2,000,000. Always conduct a detailed financial analysis and create a realistic budget for your startup.

5. How Do I Market My Business Effectively?

Develop a strong online presence through a website and social media platforms. Utilize digital marketing strategies such as SEO, content marketing, and social media advertising. Traditional marketing methods like flyers, newspapers, and radio ads can also be effective.

6. What Should I Consider When Hiring Employees?

Ensure you comply with employment laws, offer fair wages and benefits, and provide necessary training. Hiring employees can help scale your business, but consider the associated costs and manage your team effectively.

How to Register a Business in Kenya Using eCitizen

Types of Business Entities in Kenya

1. Sole Proprietorship: Ideal for individual entrepreneurs. It's easy to set up and manage but has unlimited liability.
2. Partnership: Formed by two or more people. Partners share profits and liabilities.
3. Limited Liability Company (LLC): Offers limited liability protection to its owners. It's more complex to set up but provides better security against personal liability.
4. Public Limited Company (PLC): Suitable for large businesses that want to raise capital from the public. It's more regulated and requires higher compliance.

Steps to Register Your Business

1. Create an eCitizen Account: Visit the eCitizen portal and create an account if you don't already have one.
2. Name Search and Reservation: Use the eCitizen portal to search for and reserve your business name. This step ensures your business name is unique and approved by the Registrar of Companies.
3. Fill in Business Registration Forms: Depending on your business type, fill in the necessary registration forms provided on the portal.
4. Upload Necessary Documents: For a company, you'll need the Memorandum and Articles of Association, among other documents. For a sole proprietorship or partnership, you'll need ID copies and a passport photo.
5. Pay Registration Fees: Fees vary depending on the type of business entity. Payments are made online through the eCitizen portal.
6. Receive Certificate of Incorporation: Once your application is processed and approved, you'll receive a certificate of incorporation for your company, or a certificate of registration for a sole proprietorship or partnership