Worst Businesses to Start in Kenya: Avoid These 13 Ventures

worst businesses to start in kenya

Starting your own business is an exciting and adventurous journey! But with so many options to choose from, it can be overwhelming to determine which type of business is the right fit for you. Unfortunately, not all business opportunities are created equal, and it’s important to know which ones to avoid. In this article, we’ll take a closer look at 13 worst businesses to start in Kenya if you’re an aspiring entrepreneur.

Whether you’re just starting out, or you’re a seasoned entrepreneur looking to expand, it’s crucial to do your due diligence and research before investing time and money into any venture. By avoiding the Kenyan business ideas listed below, you’ll save yourself from potential financial losses and disappointment, and put yourself in a much better position for success.

So, let’s dive in!

Table of Contents

Type 1: Pyramid Schemes – The Worst Business Model

pyramid schemes in kenya
Avoid DECI like Pyramid Schemes in Kenya as a Business

Pyramid schemes are illegal, yet they are still prevalent in Kenya. They promise high returns for little effort, but the reality is quite different. In this type of scam, new recruits are constantly needed to bring in money, and eventually, the pyramid collapses, and many people lose their hard-earned money.

Definition of Pyramid Schemes

A pyramid scheme is a type of investment scam that relies on the recruitment of new participants to bring in money. The scheme promises high returns for little effort and often involves making a small payment to join, with the promise of receiving a larger sum of money in return.

How they operate in Kenya

Pyramid schemes in Kenya often start with a charismatic individual who promises high returns for a small investment. The individual then recruits others, who must also make a payment, and the process repeats itself. The returns are paid to early participants, but as the pyramid grows, it becomes impossible to sustain, and it eventually collapses, leaving many people without their money.

Examples of Notorious Pyramid Schemes in Kenya

Some of the most notorious pyramid schemes in Kenya include ‘Milingo’ , DECI, and ‘MMM Kenya’. In both cases, many people lost their hard-earned money after the pyramid schemes collapsed.

Why they are not sustainable and should be avoided

Pyramid schemes are not sustainable and should be avoided because they are illegal, and they rely on the constant recruitment of new participants to bring in money. When the recruitment stops, the pyramid collapses, and many people lose their money.

In conclusion, if an investment opportunity seems too good to be true, it probably is. Aspiring entrepreneurs should be cautious and avoid pyramid schemes and get-rich-quick scams. It’s important to do your research and understand the risks involved before investing your hard-earned money.

Type 2: Matatu Ventures

matatu business in kenya
Matatus Business is probably the worst business to start in Kenya

Do you feel like jumping into the matatu industry in Kenya? While it may seem like a great way to earn some money fast, there’s a lot more behind starting your own venture than what meets the eye.

Let’s take a look at matatus, their business challenges, and why starting one may not be the best option for aspiring entrepreneurs.

What are Matatus?

Matatu is Swahili for public service vehicle (PSV). These eye-catching vehicles have become staples of public transportation in Kenya. They’re known for their loud music, vibrant graphics, and often jam-packed interiors. Starting a matatu business requires you to purchase and maintain your own PSV and acquire all necessary licenses before cashing in on any potential profits.

The Challenges of Operating Matatus

Unfortunately, becoming a successful matatu operator doesn’t guarantee you money or fame instantly. There are several significant challenges with running this type of business that include:

  • Competition: For starters, there’s fierce competition within the matatu industry as thousands of such vehicles run along the same routes each day. To stand out from your competitors, you’ll need to provide something special—whether that’s an unbeatably comfortable ride or better pricing options.
  • Cost: You’ll need deep pockets to begin your enterprise as buying and licensing the vehicle itself can set you back quite a bit—not to mention hiring drivers or conductors and covering maintenance costs down the line.
  • Safety And Security: Second only to customer needs comes passenger safety and keeping your vehicle safe from any force majeure incidents such as accidents or theft cases which could hurt more than just financially!
  • Government Regulations: Last but definitely not least is comliance with governmental regulations as well as taxes that must be paid according to local policies which can also be tedious beyond measure if not done properly!
  • Market Saturation: It’s important to note that due to so much competition, matatu routes are near oversaturated meaning it will require extra effort on your end to keep up with all other operators striving for customers attentions!

Why Starting A Matatu Business May Not Be The Best Option?

With all of these factors in mind it may be safer—and smarter—for aspiring entrepreneurs looking into this industry as an investment option to consider all risks before making any decisions– thoughtful decisions

Type 3: Get-Rich-Quick Scams aka Wash-Wash Business

Starting a Wash Wash Business in Kenya is not advised for the ethical ones among us

Who doesn’t dream of easy money and fast success? Unfortunately, get-rich-quick schemes are very real. In Kenya, these scams are everywhere, so it’s important to stay alert and recognize their slick tactics. Keep reading so you can (hopefully) side step any financial disasters!

Common Tactics Used by Scammers

Get-rich-quick tricksters don’t play around when it comes to stealing your money. Here are some of the common practices they employ:

•Promising unrealistic returns – Be honest – who wouldn’t be tempted by a huge payout in record time? Yeah, that’s what these scammers count on.
•Pressure to invest quickly – Unexpectedly putting the pressure on is one way scam sites have you right where they want you; with no time for research or contemplation about the investment.
•Using fake testimonials – Pictures of people supposedly getting all this “easy money” makes it look legit…but sometimes ease just isn’t true and those photos are totally fabricated.
•Requiring large investments – Look at everything carefully before you invest any cash – especially if they ask for a lot up front! Not only do they stand to make more this way, but if it turns out to be fake, then all your hard earned refunding money will be far harder than it should be.

How They Target Unsuspecting Individuals in Kenya

Get rich quick schemes work because sources like social media, emails and word of mouth make them seem legitimate. People from all age demographics can fall prey to them too when looking for an easy win in life.

Why They Are A Bad Investment Decision

Investing in get rich quick schemes really isn’t great though – here’s why:

•It’s illegal – Most of these opportunities come with legal consequences attached., so watch out!
•You could lose your money – The whole point behind get-rich-quick strategies is that someone else walks away wealthy instead of you; and typically speaking – that someone else isn’t you…

•It’s a waste of time – Even if luck is on your side and you manage not to lose your cashola – investing in one still won’t yield any rewarding skills or experiences which other options would give you — making any time spent worthless in the long run.

Bottom line: If a business opportunity sounds too good to be true — chances are…it is! Probably a bad business idea.

Do yourself a favor; do something smart with your bank account instead of being embarrassed later on down the road (and poorer).

Take some necessary steps before signing up; conduct adequate research, look into past reviews from previous customers/investors & consult an economic pro before fully committing — And cross your fingers that whatever venture you choose doesn’t up like the quail business!

Type 4: Taxi Service Business aka Nairobi Uber

taxi uber business in kenya
Premium tears for those that start Taxi or Uber business in Kenya without a plan

Buckle up because an offline taxi business is not for the faint of heart! Before you take the leap into becoming a ride-sharing mogul, here are all the need-to-knows about owning a taxi service in Kenya.

Definition of Taxi Business

A taxi biz is owning and operating your own vehicle to transport customers from point A to B. Whether you’re behind the wheel or hiring someone else to do your driving, it’s still your business!

Challenges Faced by Taxi Operators in Kenya

• High cost of purchasing or leasing a vehicle – Taxis ain’t cheap, so getting on the road can be pricey.
• High maintenance and fuel costs – Keeping your car running smoothly is part of just about any type of car ownership but you’ll feel it more with taxis since they spend more time on the road.
• Regulation – The industry is heavily regulated and that means there’s extra hoops to jump through to make sure everything is kosher.
• Competition & Market Saturation – With companies like Uber and Bolt taking rising market share in the space, traditional taxi operators have found themselves being squeezed out.

Why Starting a Taxi Business May Be the Worst Business Advice

It’s no secret that starting a taxi business comes with endless amounts of hurdles but it doesn’t mean entrepreneurship isn’t right for ya! Still interested?

Make sure you crunch numbers like crazy before diving in and come prepared to face some real competition (yikes!). Last but not least – find ways to differentiate yourself from other online taxi operators out there and make yourself stand apart from the crowd!

Type 5: Grocery, Cereals or Mama Mboga Business

cereals grocery business in kenya
Avoid the Cereals and Mama Mboga business in Kenya unless you do proper market research of your area

Are you thinking of starting a grocery store business – AKA a Mama Mboga business – in Kenya? It certainly sounds like an exciting prospect, but there are a few challenges to keep in mind before taking the plunge. Here’s a breakdown of all you need to know.

What is a Grocery or Mama Mboga Business?

A grocery store or Mama Mboga business is simply a retail store that sells all sorts of yummy and useful items, from fresh produce to toiletries. These stores are usually owned and operated by families within local communities – so they’re run with lots of love!

Challenges Faced by Grocery Business Owners in Kenya

It can be tough out there for mama-mbogas! With so much competition from larger stores that offer better prices and more selection, small businesses have to do everything they can to stay in the running. Plus, prices on everyday staples are always going up and down, making it hard to plan finances effectively.

And finding credit isn’t easy either – which makes buying big batches of stock or upgrading your store almost impossible.

Competition and Market Saturation

To make matters worse, most places in Kenya are already flooded with small grocery stores – which makes it difficult for new ones to gain traction. What’s more, as supermarkets continue becoming more popular shopping spots amongst people looking for convenience, mom & pop stores really feel the strain.

Time to Think Twice?

With so many obstacles standing in the way of success for grocery entrepreneurs in Kenya, you may want to think twice before jumping into the biz! While it’s definitely an exciting venture if handled with carefulness and thoughtfulness – don’t forget about all the potential risks involved too.

Type 6: Is Mpesa Business a Profitable Business?

Are you considering beginning a business with M-Pesa? Before engaging in this increasingly common way of generating income, it’s important to take certain factors into consideration. Running an M-Pesa business brings with it both opportunities and challenges. Understanding them is essential.

What is an Mpesa Business?

An M-Pesa business means that you get to be an authorized agent for the popular mobile money service. This includes Safaricom, Telkom Kenya or Airtel Kenya. You will handle transactions like cash deposits, withdrawals, bill payments, and even money transfers!

Challenges with Being an Agent for Mobile Network Operators

Being an M-Pesa agent is no easy task – with so many agents competing for customers, it can be tough to make a name for yourself and keep your customer base steady. Plus, representatives are responsible for keeping any money held safe at all times – a major risk! Additionally, there’s not always enough business to go around if the market is oversaturated with fierce competition from too many agents.

Should You Start Your Own Business?

If you’re hoping for a quick return on investment then maybe opening your own M-Pesa agency isn’t right for you. Running this kind of business isn’t just filled with competition but can also take time and hard work before seeing any real success. Plus, the risks associated with having large sums of cash on hand should definitely be taken into consideration.

Before taking the plunge into this form of entrepreneurship, do your research and make sure it’s something that aligns with your interests, skillset, and values!

Type 7: Hair Salons and Spas

starting hair salon in kenya
Too many hair salons in Kenya. Competition is stiff

Starting a hair salon or spa business can be a great way to get into the growing beauty and wellness industry — but it also comes with a host of challenges. Let’s take a look at what makes a hair salon or spa business unique, the hurdles salon owners in Kenya face, and why this type of business may not be right for everyone.

What is a Hair Salon or Spa Business?

At its core, a hair salon or spa business provides services like styling, coloring, facials, massages and manicures. This kind of business can range from small, one-person operations to large and successful multi-location businesses.

Challenges Faced by Hair Salon and Spa Owners

Running any kind of business takes effort — but running a hair salon or spa requires more than that.

Upfront costs can include investments in equipment, supplies and rent for your commercial space — plus you’ll need to hire skilled stylists and aestheticians who won’t leave after just one job.

Additionally, competition in this industry is tough because there are so many similar businesses vying for customers.

Is Starting A Hair Salon Or Spa Business Right For You?

Before investing time and money into starting a hair salon or spa business, it’s important to research the market carefully along with competitors in the area — then weigh potential costs against possibility benefits. You’ll also want to pick something that aligns with your skillset… after all, it’s always easier when you’re doing something you love!

While starting a hair salon or spa business may not be something everyone is up for taking on — there are plenty of other amazing opportunities out there!

Type 8: Political Blogging

Startups In Kenya
leave political blogging to the politicians

Starting a political blog may seem like a good idea, especially during election years when there is a lot of buzz around politics. However, this type of business can be difficult to maintain and may not be the best option for aspiring entrepreneurs.

A political blog is defined as a blog that focuses on commentary, analysis, or discussion of political events, issues, or news. Political bloggers often have strong opinions and use their platform to voice these opinions. This can make them a target of political backlash and censorship, especially in countries where free speech is not fully protected.

In Kenya, political bloggers face many challenges, including:

  • Threats of legal action: Political bloggers may be sued for defamation, hate speech, or spreading false information.
  • Censorship: Political bloggers may have their content censored or taken down by the government, relevant authorities or social media platforms.
  • Cyber attacks: Political bloggers may be targeted by cyber attacks, such as hacking or malware, in an attempt to silence their voices.

In addition to these challenges, the competition in the political blogging industry is high, with many well-established bloggers already dominating the market. As a result, it may be difficult for a new political blogger to gain a significant following and monetize their platform.

Starting a political blog may not be a viable option for aspiring entrepreneurs for several reasons:

  • Lack of stability: The political landscape can change rapidly, and a blogger’s views may become unpopular overnight. This lack of stability can make it difficult to maintain a steady income from the blog.
  • High risk Low Rate on Return: Political bloggers may be at risk of legal action, censorship, and cyber attacks, which can have a significant impact on their livelihoods.
  • Limited monetization options: There may be limited opportunities to monetize a political blog, as advertisers may be wary of associating themselves with controversial content.

Type 9: Insurance Agency

So, you’re thinking about starting your own insurance agency in Kenya? Awesome! But before you dive into the business, there are a few important things to consider.

What Is an Insurance Agency?

As an insurance agency, you’ll serve as a middleman between insurance companies and their customers – and for that role, you’ll receive commissions from the policies sold.

Seems like a great opportunity, right? Sure it does – but don’t get ahead of yourself just yet. There are some challenges that this type of business face – let’s take a closer look.

What Challenges Do Insurance Agents Face in Kenya?

First of all: competitiveness. There are plenty of experienced pros already operating in the market and making waves.

Secondly: regulations. To run legally, you must be licensed and meet certain requirements set by the government.

And lastly: money! Not exactly the best news – commissions can be quite low, so earning good money won’t be easy!

Should I Open an Insurance Business?

Now here’s something else to think about: getting started is probably not going to be easy either. The barriers to entry can really add up; licensing fees and training can make things expensive before you even start selling anything.

On top of that, growth in this industry can be slower than average…so it may take more time than usual before your agency makes some real profit. Finally, attracting potential clients might prove tricky as well – lots of marketing needed to make sure everyone knows where to find ya!

But hey – don’t get discouraged just yet! Overcoming these obstacles is definitely doable and a lot of people out there are going through similar situations every day. All it takes is dedication and hard work – plus some optimism – wasn’t gonna leave that one off the list!

With enough determination who knows what could come outta this journey? Your career could actually end up way better than expected 😉

Type 10: Photography as a Good Business

Are you seeing a whole lot of potential for an awesome photography business but you’re also overwhelmed by the competitive market? Don’t panic yet! Starting a photography business can be really challenging, especially here in Kenya, but if you have the skills and determination to push through, you can make it work!

Defining Photography as a Business

We all know that a photography business involves taking pictures to preserve memories and tell stories. But did you know that there are many more aspects to this beautiful craft? On top of having an eye for composition, photographers need to invest in good equipment, master technical skills such as lighting and editing, and acquire the know-how to run their business successfully.

Challenges Faced by Photographers Here in Kenya

The market for professional photographers here can be quite saturated; after all, almost everyone now owns cameras or smartphones! It’s not hard to find local photographers offering similar services so you need to find ways to make your business stand out from the crowd.

Another obstacle is acquiring quality equipment. Professional camera sets don’t come cheap so if you decide to take up this profession, it would be wise to start saving up! Additionally, mastering the technical skills necessary for producing high-quality photographs requires time and effort.

Market Saturation & Competition

Because there are quite a few photographers around, you will definitely face a lot of competition when trying to promote your business so make sure that your portfolio stands out if you want people to choose your services over another photographer’s. In other words – make sure they notice YOU!

Is A Photography Business Right For You?

Lastly, before jumping into starting YOUR own photography business – do spend some time contemplating whether this is truly the right path for you personally.

Do create a well-thought-out plan outlining how (and why) it could work. Starting any kind of business takes hard work, dedication and A LOT of learning along the way – so make sure you’re totally ready before diving in head first!

All things considered though – if photography is what speaks to your heart then go for it full force! And we suggest that once you do get started – don’t forget about our tips on competing with other professionals: research your competition thoroughly and showcase what makes YOU unique when marketing yourself accordingly. Good luck!

Travel Agency Type 11: Is it Right for You?

Starting a travel agency might sound like a great idea. After all, who doesn’t love to go on vacation from time to time? However, starting a travel agency is not for the faint of heart! Let’s take a closer look at exactly what a travel agency does, why it can be challenging to start one and if it may be the right fit for you.

What Is A Travel Agency?

A travel agency specializes in making arrangements for people to go on vacations and business trips. They act as intermediaries between clients and travel suppliers such as airlines and hotels. By offering services such as booking flights and organizing tours, they make getting away much easier!

The Challenges for a Travel Agent

Unfortunately, there are many challenges that come along with running a successful travel agency in Kenya. There is stiff competition and extremely thin margins. Additionally, clients can often be hesitant to book through agencies due to mistrust and the lack of government regulation in this sector.

Lastly, as more people turn to online booking platforms like Booking.com or Expedia for their travel needs, it’s becoming harder for traditional agencies to keep up with demand.

Is It The Right Choice For You?

Starting a travel agency requires hard work, dedication and money – but it could have huge rewards if done correctly.

If you decide this is the path you want to take with your business venture, make sure that you spend plenty of time researching the industry thoroughly before diving in headfirst! Also consider what kind of niche you’ll be able to create within the industry and how best you can market your own unique services that set your agency apart from other competitors out there.

With careful planning and good old-fashioned hard work – starting a successful travel agency just might be possible!

Type 12: Shylock Business

A shylock business, also known as a loan shark business, is one to definitely avoid. While it may seem like an easy way to make quick money, it is illegal and can have severe legal implications.

Shylock businesses operate by lending money to individuals at high interest rates, often targeting vulnerable people who are unable to get loans from traditional financial institutions. These businesses are illegal in Kenya and participating in one can result in severe penalties, including imprisonment.

Moreover, shylock businesses prey on the vulnerable, exploiting them for their own financial gain. This type of business is not only illegal, but it is also unethical and can have a negative impact on the reputation of the individual involved.

In conclusion, a shylock business is not a viable or sustainable option for aspiring entrepreneurs in Kenya. If you’re looking for ways to make money, consider starting a legal and ethical business instead. This will not only benefit you financially, but it will also help you maintain a good reputation and avoid legal repercussions.

Type 13: Tender Business

If you’re looking to become an entrepreneur in Kenya, there’s one type of business you should definitely stay away from: the tender business. T

his type of business involves bidding for government contracts, sometimes using unsavory tactics such as bribing officials or engaging in unethical practices. Not only is this practice illegal, but it can also land you in prison if you’re caught.

Moreover, the tender industry is highly competitive and ruthless. A lot of people try to win contracts by playing dirty, which can have a detrimental effect on their personal reputations as well as on the economy as a whole.

So, if you’re hoping to make it big as an entrepreneur in Kenya, we suggest steering clear of the tender business. Instead, look for opportunities that align with your values and skills—not only will it be better for your finances and reputation, but it’ll keep you out of legal trouble too!

Conclusion

Congratulations on making it to the end of this informative article! By now, you have a clear understanding of the 13worst businesses to start in Kenya. Starting a business can be an exciting journey, but it’s important to do your due diligence and research to ensure that you’re choosing a viable option.

It’s understandable that some of these businesses may seem attractive because of the promise of quick profits or popularity. However, it’s important to consider the long-term sustainability, competition, and potential ethical and legal implications of the business you choose to pursue.

We encourage you to pursue a business that aligns with your skills, interests, and values. This will increase the chances of success and ensure that you enjoy the journey. Remember, success takes time and hard work. Be patient, stay focused, and never give up on your dreams.

As a final note, we wish you all the best in your entrepreneurial journey! May you find the courage to take that leap of faith and start the business of your dreams. We are rooting for you!

 FAQ’s : Worst Business Ideas

Q: What are the most common types of businesses to start in Kenya?

A: If you’re looking to launch a business in Kenya, some of the most popular choices include Pyramid Schemes, Matatu Ventures, Get-rich-quick Scams, Taxi Businesses, Grocery or Mama Mboga businesses, Mpesa Businesses, and Hair Salons and Spas.

Q: What is the best type of lucrative business to start in Kenya?

A: When choosing which business is best for you in Kenya, it really depends on your particular interests and skillset. Do your research and evaluate the market demand and competition for each option before making your final decision.

Q: What are the key elements to keep in mind when launching a business in Kenya?

A: It’s essential that you consider several key elements when starting any business in Kenya. Think about market demand, competition levels, capital investment requirements, legal aspects involved, and your own abilities and experience.

Q: What resources are available to help me start a business in Kenya?

A: You can access many helpful resources while setting up shop in Kenya! The government offers agencies that can aid you on your journey along with entrepreneurship programs and mentorships. Additionally, there are networks specifically geared towards small businesses you may want to join.

Q: What is the role of technology in starting a business in Kenya?

A: In this digital age we live in now – technology can be an absolute game changer when it comes to getting your dream venture off the ground! With technological advancements come increased opportunities like improved communication channels between customers and yourself as well as powerful online marketing strategies that can take your company from local to global with ease. Plus – technology will also make it easier for customers to conduct remote transactions with you.

Q: How can I access financing to start a business in Kenya?

A: If you’re looking for some financial assistance getting started – there are quite a few options available including loans from banks and microfinance institutions plus government programs too. You could also explore crowdfunding methods such as angel investing or venture capital if those suit your needs better than traditional loans do.

Q: What are the challenges of starting a business in Kenya?

A crunch on capital flow into new ventures could potentially be an issue during startup phases – so having enough funds on hand may prove challenging at times! You might also find there’s higher market competition activity than what was initially expected or legal processes may take longer than anticipated too. These days hiring quality labour can also be tricky due to lack of resource availability so bear this all mind when you embark on launching something new!

Q: How can I increase my chances of success when starting a business in Kenya?

A great place to start is by doing extensive research into potential target markets before beginning work on any product development or service offerings for them! Additionally putting together an actionable business plan that considers various scenarios should definitely put you one step ahead but do leave room for flexibility if needed later down the line too!

Seek advice from veterans within the industry whose advice has real value – plus build yourself up an encouraging support system so no matter what tries coming along -you have people who got yo’ back honey!

 

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