Starting a business in Kenya ....Step 2!

Step 2

Planning stage; in this stage as the potential business owner you would need to translate the passions for the business and the outcome of the idea research in stage 1 into cash flows and projections. You might need to get someone not heavily invested in the idea emmotionally to look at the figures. Please note that you will need to seperate your passions and ambitions for the business with the actual reality as determined by the market research. Having conducted a thorough market research would make this stage more comprehensive. Don’t leave out any costs including paying your own wages. By including all costs you would ensure that you don’t under fund your business leading to cash flow problems. A common trap in this stage is not to set aside you passion for you business idea and the reality.

Start off with the fixed regular costs such as business licence, rent, wages and domain registration from online businesses. To work out the Wages, you would need to research how much a person in a similar job is paid, don’t underpay your employees just because the job market is flooded by unemployed youth. Be sure to get the best staff for the job and compensate them fairly to minimise the possibility of high labour turnover. Obviously the first employee of the business will be you. Whilst you might want to pay yourself, you need to do so more so for tax purposes. If the business cannot pay your efforts and time, you would need to reconsider the model.

You would also need to have defined a business model at this stage. In the recent years there is a move towards social enterprising where your products are bought at a premium if they are produced fairly. For social enterprising you might want to publicize your operations with a blog or some other online means. The customers tend to be westerners who would rather buy the products than give cash aid which might not be spent in their intended ways.