Welcome to Entrepreneurship month in this blog. You are in in the right page!
According to the Cambridge English online dictionary, an Entrepreneur is defined as;
According to Investopedia;
An entrepreneur is an individual who, rather than working as an employee, founds and runs a small business, assuming all the risks and rewards of the venture. The entrepreneur is commonly seen as an innovator, a source of new ideas, goods, services and business/or procedures.
I am very excited to go through the key components of a business venture this month of August 2018 in a series titled the spokes of the wheel called Entrepreneurship;
Where does one get an idea to begin a business?
How does one select the target market for ones goods and services?
Where does one get finances to begin a business?
And what about the legalities of doing business in Kenya?
How does one manage the day to day finances of a business in Kenya?
What about Marketing of the products, what should one bear in mind?
Last but not least what are the key elements of a Business Plan?
Join me in this journey in a month dubbed, “Wacha niKwambie ya Bizna” which is slang Kiswahili translated loosely to “Let me tell you of Business” in a month where we will be soaring in Entrepreneurship.
Have you been dying to begin a venture, it could be a business or a social entrepreneurship yet you seem to have no idea.
Where do people get ideas you wonder as you scratch your head?
Let me help you out:
Do you have something that you are passionate about? A hobby an interest for example?
Do you talk to your family, friends or colleagues?
Uh, huh. You are on the right path.
Do you look at things that are not working well in our society and you are challenged to make them better?
During your travels, remember our focus on Travel a few months ago? ( http://www.wachanikwambie.com/…/an-interview-with-wanjiru-…/) Do you pick something from other cultures and geographical locations?
Are you curious, always eager to learn new stuff?
Are your eyes and ears open to what is trending or what may be on the horizon to trend?
All these are sources of ideas for ventures.
We are not done yet.
Do you have a notebook where you jot down ideas as they come to mind, ensuring that they are never forgotten?
Are their current products or services in the market that you can improve on?
Do you surf the internet to generate new ideas?
Do you know that where there is a will there is a way?
So pray tell me why you do not have an idea for a venture yet if you answered, “Yes” to any of these questions.
Now that we have an idea to begin a business, the next step is to determine the target market.
The choice of target market is very important for any product or service. An entrepreneur’s product or service should be able to fulfil the needs of a given target market.
The following factors can be used or one to know who the target market of ones product or service is;
Marital status, etc.
One can decide to use a marketing research professional to know the best target market for ones goods or services or on the other hand gain information from family, friends or colleagues, observation, authority marketing publications, etc.
Finances for a start up
So you have a business idea, you have defined the target market for your business. For most business ideas to take off, funds are needed;
Even if one wishes to obtain funds from someone else, one must show their commitment to their business venture by pooling some amount of funds on their own.
These are wealthy or retired company executives who invest in fledgling firms owned by others. A start up can gain from their wealth of knowledge and experience, network and also financial capital.
Business incubators or accelerators
These are running enterprises that offer support to new businesses. They are willing to share their facilities until the fledgling enterprise gains wings to fly. They may also offer support in terms of administration, technical and logistical resources.
These institutions own a stake in your business in exchange for the capital they will put into it. Being business men themselves they seek return on investment. They contribute financial capital, experience and knowledge.
Is money obtained from family and friends. One should appreciate the money that they obtain from family and friends to begin a business and should not take it for granted as it may be pooled from their own personal savings. Some friends or family may request for a stake in your company depending on how much they have invested in the business.
Government grants and subsidies
Every once in a while the government will offer funds to support new businesses. For one to be eligible for these funds they must show the benefit of the project, relevant experience and expertise to run the business, duly fill application forms and provide necessary documentation.
Banks are not normally very helpful to start ups mainly because of their high risk. They will not lend money on an idea. One must provide a business plan. Most banks in Kenya insist that an organization should have been running for a few years to be eligible for a bank loan. The business must have financial records to show profitability of the venture. In addition one must offer security that is an asset to back the loan application. Young businesses should shop around for the best bank to meet their need; different banks offer niche products and service.
Legal checklist for doing business in Kenya
So you are considering beginning a business in Kenya, to make it a legal entity consider the following:
What legal structure will it take?
Will it be a sole proprietorship? A partnership? A limited liability partnership? Or a company?
Have it registered.
Ensure that you have the required business permits; some are general and others are sector specific.
Reserve a name for your company legally.
Protect your intellectual property rights using the services of a lawyer.
Legally tax registration will have to be done at the Kenya Revenue Authority. This will ensure that taxes such as Value Added Tax, Pay As You Earn obligations and other tax obligations of your business are covered.
Register your company with the National Social Security Fund (N.S.S.F) for your employees as statutory contributions need to be made for their retirement.
Register also with the National Hospital Insurance Fund for purposes for medical cover offered by the government for your employees.
To ensure that you have met all statutory legal requirements required to open a business in Kenya it is wise to engage the services of a lawyer. It is also wise to have a company lawyer who you can consult from time to time on legal matters concerning your business.
We will take a pause for now and continue at the end of this on the day to day running of finances of an organization and marketing of its goods and services. Have an enterprising week, will you?
August 2018 – Wacha niKwambie ya Bizna
Soaring in Entrepreneurship
© Kwambie Nyambane,
Lead Writer and Founder
The writer of this article is a Business Development Professional in a leading bank in Nairobi Kenya. By night she is a Wellness and Lifestyle writer. She holds an MBA in Marketing from the University of Nairobi and is passionate on a matters Entrepreneurship. The Small and Medium Enterprise (S.M.E.) segment is a key driver of the economy of her native country, Kenya.