A Kenyan Entrepreneur has four skins; setting up the business, looking for clients, delivering and chasing after payments.
Being an entrepreneur in Kenya is not easy. It is like every system in this country hates entrepreneurs; from Kenya Revenue Authority to the House on the Hill. Being an entrepreneur in this hopeless country should be added to 1000 ways to die.
Stats from the Kenya Bureau of Statistics (KNBS) showed that five years to 2016, 2.2 million entrepreneurs/SMEs shut down their businesses. Nobody seems to get scared of such stats in Kenya. They are used to billions getting lost. What is 2.2 million?
The stats meant that at least 450,000 entrepreneurs/SMEs were exiting the Kenyan market annually, 30,000 monthly, and 1,000 daily. Ironically, the same stats show that at least 1,000 businesses are registered daily in Kenya. Imagine that.
Despite the fact that entrepreneurs/ SMEs employ about 86 percent of Kenya’s population, and contribute about 45.5 percent to GDP, it is always ailing and on verge of breaking down. The sector has a myriad of challenges that old the bold dare to face.
A Kenyan entrepreneur has four skins or layers. The thickness of these layers vary but the end result is almost the same for almost all of them. Let us have a look at these skins:
Skin 1: Setting up the business
Setting up a business in Kenya is not a walk in the park. Millions have ended up giving up before even kicking off. The requirements and the kickbacks one has to pay, end up eating up the investment before even one finds out where to set up the business.
The cost of doing business in Kenya is out of this world. One must always budget for corruption too for without “knowing people”, you will never set up a meaningful business. No wonder so many investors are opting for Rwanda and Uganda.
Getting the required permits and certificates, as well as rent for a place you intend to set up the business, will dig a huge hole in your pocket before you even set up. In other words, the chances of your business failing before it starts are always high.
Skin 2: Looking for clients/customers
Those in the retail sector have little trouble finding customers/clients. Despite the challenges that come with competition, it largely depends on the niche one targets. Despite the challenges, most of their customers pay in cash and at a go.
But this country is hell for suppliers and those in the service industry. Anyone who supplies a service in this country is like a gambler, banking on elusive hope. Finding clients depends on who one knows and how much one is willing to give. “I have this deal, but you must give me Ksh *** once it is done.”
So, you end up getting a deal worth 200,000 shillings but only 80,000 shillings are yours. 120,000 goes to oiling lazy hands that “gave you the deal” with the hope that they “will remember you” when another deal comes up. It is man-eat-man-society.
Skin 3: Delivering
Most clients are demanding, especially those who pay less. Someone will pay you 30,000 shillings but demands a service or work worth 100,000 shillings. Most small clients are the most toxic in demanding the most while spending so little.
Those in the service industry will tell you that most Kenyan clients have a habit of “forgetting” the deliverables within the contract they drafted themselves to want you to deliver miracles. They develop sudden amnesia as soon as the contract is signed.
Skin 4: Chasing after payments
This has to be the thickest skin. If you have a weak skin 4, then you have no business doing business in Kenya. Most Kenyan clients have a problem paying as soon as work is done. As soon as work is done, they suddenly turn into literature experts in giving you wonderful promises on an unknown future.
As an entrepreneur, you must have skill in collecting debts. You must be ready to forego some debts however painful it might be. Some clients can frustrate you to the point of driving you into depression.
At which skin level are you?