Why most small businesses in Kenya barely survive long enough

According to the Kenya National Bureau of Statistics (KNBS) figures, only 10 per cent of SMEs are able to stay afloat after ten years of their start something which has been majorly attributed to lack of the know-how in the running of the enterprises.

Proper information on how to run businesses can avert the death of over 75 per cent of Kenyan SMEs which do not survive barely five years after their inception.
According to the Kenya National Bureau of Statistics (KNBS) figures, only 10 per cent of SMEs are able to stay afloat after ten years of their start something which has been majorly attributed to lack of the know-how in the running of the enterprises.
“Most of these SMEs are started with unclear focus due to lack of training or mentorship on various issues such as how to identify markets and management of finances among others leading them to immature closure,” said Victor Otieno, managing director of Viffa Consult, a Kenyan based management consultancy with of developing SMEs in Africa.

Wrong reasons for starting a business

A good number of Kenyan entrepreneurs have wrong reasons or misplaced reasons as to why they want to start a business. Majority of them start with the primary goal of either to make a lot of money, not to answer to anyone apart from themselves not looking at the fact that this are benefits that come after a longer period of your business being successful.
The best reason one would decide to start a business would be having passion, love and strong belief in the business venture you want to get into. And you have done a proper investigation that your product will fill a market gap.
You need to have determination, patience to be able to make it in the business world. Every time you get a challenge it should give more motivation to grow.

Poor Management
Many businesses report business failures as a result of poor management as the main reason why their businesses fail. Many new business owners do not have the technical know-how to run a successful business. This ranges from getting the best market for the product at hand, knowledge to run a business this is because a big percentage of business owners just decide to start a business with no relevant experience or having someone to coach them through.
To be able to have a long business lifespan it is advised that young or new upcoming entrepreneurs need to get basic training on how to run a business, one could either go for relevant classes or get professional consultants who will take you through the required steps to make your business successful.
Poor management is not just on the line of not having the required skills; it also encompasses a business owner neglecting his or her business. Every young business enterprise needs a lot of care, planning and control of everyday activities.

Insufficient Capital

Having constant cash flow is very important for a business. Business owners need to ensure when they are making a projected cost of a business. Most new business owners mostly do not look at the operating costs of their business. This is because they work on the assumption that their businesses will pick up immediately and they will make big sales not thinking that their business will need some time before they make commendable sales.

The Wrong Location

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Location is an important factor to consider when setting up your business. The wrong location would mean the death of your business no matter how good you run it. Some of the factors to consider when setting up your business is who are your customer, location of your competitors, the security of the area, if your business really relies on human traffic it would be important to locate your business where you could maximum human traffic.
One important thing to note is if your business does not have constant human traffic the ideal location for your business would be at home. This will help you reduce on the rent costs.


Expansion of a business does not really translate to business success this is one thing many business owners get wrong. So many businesses go under as a result of expanding their enterprises too fast.
Having an established customer base and constant cash flow is one of the factors to consider before deciding to expand your business. You need to have careful review and research before you decide that you want to expand your enterprise. One really needs to consider if their business will continue to run smoothly before you decide to expand. It would be quite sad if you expand your business only for it to completely run down two-three months later.
Victor continues to add before one decides to take up any business venture, he or she needs to well informed and educated in the sector or get professional help so as to make sure your monetary investment does not go to waste.

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About Kuza Biashara

About Kuza Biashara

Starting a business is a leap of faith even in the best of circumstances. We at Kuza Biashara are focussed to encourage these daring small business owners who have the potential to innovate and change the world by contributing to the nation’s economy and livelihood.