What is the Best Business to Start in Kenya

As a developing country, there are numerous business opportunities in Kenya with a good return on investment. Hence, this article will focus on what is the best business to start in Kenya.

Various factors come into play when choosing the type of business to undertake. Some of these include the startup capital, location, regulations, competition, and skills. These elements ensure you only settle with a venture that you have a competitive advantage on.

Hence, if you are on the hunt for a business opportunity in the country, you need first to understand your strengths and abilities.

1. Financial Services Business

Kenya is a financial services leader in this part of the world. Some of the record-breaking products such as M-PESA have put the country on the global map and created thousands of jobs.

Due to this, the country has managed to create a great environment for the financial business players. Some of the factors in place are progressive regulations, complete value chains, and adequate skilled labor.

These factors make this sector a key potential area to start a business. Depending on your capital and abilities, you can start small businesses such as an M-PESA agent, or bank agent to a larger business such as distributorship or even a Fintech.

Starting a business in the Kenyan financial services sector requires capital of as little as 50,000 Kenyan shillings with no limit to the upside.

As the country develops, so will this sector making it a lucrative area for the next decade and beyond to invest in.

2. Automotive Business

With the country growing at an average of 7% per year, the disposable income among the citizens is also increasing. This is creating a new group of middle whose appetite for cars is insatiable.

This makes the automotive business among the areas on what is the best business to start in Kenya. As the country’s economic growth continues, so will this sector as income grows.

There are various types of businesses that can do in the automotive sector. Some of these include

• Car dealership
• Car wash
• Garage
• Spare parts shop

Again, the key determinant to the right type of business is the earlier factors we discussed such as capital and skills. A car dealership is the most capital-intensive in this list as it involves buying and selling cars. It also requires you to have a good understanding of the international car markets and importation regulations.

Car wash on the other hand is among the less capital intensive on the list. All you need is washing equipment, a strategic location, and access to water.

The car garage business involves offering car maintenance and repair services. It is a fact that cars will always need repairs. Hence, as long as you have the right skills, you can never go wrong in this business.

The spare parts business is also a key sector in the automotive dealership. In this, you target to supply the garages with the key parts to carry out their jobs.

This industry can only grow in the future making it among the right sectors to do business in.

3. Farming

Perhaps this is the most lucrative sector in the country with almost 25% of the country’s GDP coming from the sector. It is also among the highest employer sector in the country.

Food is a basic need and hence the demand will always be there. There are a lot of businesses that you can do in the farming ecosystem. Some of these include;

• Becoming a farmer
• Supply of farm inputs
• Farming consultant

Becoming a farmer is perhaps among the easiest business to get into. However, you need to evaluate your strengths to determine the nature of farming. Some of the key elements to consider before venturing into the farming business are the availability of land, skills, and location.

If your strength is not farming, you also have the option of doing farm inputs and machinery business. This business is big in the country due to the immense demand for these items. Farmers will always need items such as fertilizers and pesticides.

Others will require machinery from the heavier ones to the small farm tools. Hence, the amount of startup capital will also play a key role in determining the farm inputs to supply.

Due to the complexity and scientific nature of farming, consultancy services are also in huge demand. These include skills such as extension officers, farm preparation, and construction services. Hence, if you have the skills in either of these services, you can tap them in creating a business opportunity.

As the country’s population expands, so will the need to farm products. The good weather in the country also allows for farming cash crops for export. An example of these includes tea, coffee, and horticulture products.

4. Technology Business

Kenya is a leader in the creation and adoption of technology on the continent. This makes the country the right investment destination for the technological services business.

The high population of young people, increase in digital literacy and high internet penetration have made it a key niche where you can do business.

Some of the businesses you can start in this sector include

• Selling of computer accessories
• Internet provision
• Software development

Selling Computers and related accessories is less capital intensive in this group. it involves targeting consumers that need devices such as personal computers and mobile devices. This business has demand across the country. Other items that can work include printers.

The demand for internet services has also created a huge market in the area across the country. Most of the current internet providers remain unreliable and expensive. Penetration levels are also low meaning there is a huge chance and opportunity for growth.

Such a business requires substantial investment both in the infrastructure and resources. Hence, if you have a big capital base, this is a business worth doing.

Software development has become the new goldmine as services continue to go online. This is a highly skilled sector that requires the development of software meant to solve real-life challenges.

This business is also capital intensive and needs good marketing skills to penetrate the market. On the upside, the rewards are good if you manage to scale your business.

Conclusion on what is the best business to start in Kenya 

The above sectors are an indication there are a lot of areas to invest in Kenya. The combination of both a huge population and favorable government policies makes it easier to make a good return on investment in the country.

You just need to evaluate your strengths, skills, and the capital requirements to understand where you fit.