Looking after your hair

Hey, 

Looking for quality hair products from UK? Well we got you

We have all 3 products below in Nairobi – Just whatsapp 0721382386

Wholesale available

 

 

KES 1400

KES 1000

KES 1400

Importing stuff from China......maiden transaction, funny in a serious way!

The good news to me is that I have finally cracked it on how to source stuff from china and import them into UK. ( lesson learnt, be patient, dont be loyal to anyone business wise and just do it!)

This is well in line with my strong desire and ambition to limit the number of hours i have to have a boss bossing me around....plus the thought of being a millionaire doesnt mix well with being someone else 'bitch'! ok, employee?

so after trying to source what i really wanted to sell, it was finally that time when you send your hard earned money or that loan which you will pay back with all the sweat, blood and tears in your body to the chinese sellers. For me the decision on what to buy was simple, i am mad about this product and buy it all the time. so i know what i look for and what other look for plus i know the pricing like the back of my hand.....literally.

I used my favourite website - www.alibaba.com to source the suppliers and the goods.

It took me a month just to narrow down to 10 potential suppliers, and clever me I asked for samples.

The samples are free but with the DHL shipping of 50 dollars a sample, well it doesnt feel free. But whatever I did I was keen to make sure to have samples because trust me a medium size shirt to a chinese is not a medium size shirt to the rest of the world. You need to be absolutely clear on what the sizing is, initially i didnt know to only use cm or inches and yards. dont use Medium, Long, small etc even shoe size 39 means different things to an American, European, Uk and Chinese person. Be in the know what it is you are buying, for there is no use having the cheapest products in the market is there is no one buying them.

After 2 months, I was ready to order, Please remember i am a small man with a small order to make. This makes more complication than i ever thought it were possible. That is a story for another day.

After narrowing down who i will use, there is still the fear that they will run away with my money. Escrow is a saviour, but it doesnt always work ......according to me anyway.

As is the case with most transactions, I was required to make a 30% down payment for the production of the goods to start, that took a month. so now we are 3 months down!!!!! still no goods.
After the month - it worked out to be 5 weeks for the chinese - the conversation that followed was something like this

Chinese man: we have now completed the production.
me : so you want the 70% sending over?

Chinese man: NO!!!
Me:  ........WTF, you dont want my money??

Chinese man: we need to sort the parkaging first.
Me: Oh, LOL.

He then proceeded to send me a list of packaging options all of which were free......The options were like 22. I thought to myself that the  butcher down the road doesnt give me these options how come they give me so many options? I should have expected this as he had initially sent me 10 options of colour white....WTF....i know, There are at most three whites i thought. New white, Jik it now White and you know white!!!

Me: oh you just pick one as they are all free and just let me know when completed!
Chinese Man: am afraid you have to pick the option yourself

So i choose the packiging, polythene ( am thinking it is lighter than cardboard so cheaper for shipping)

A week later ( well 10 days from the end of production) he informs me that the packing is complete.
At this point am thinking, you A...hole you know it takes 3 working days to send money from wherever to China, why didnt you tell me this a couple days ago?

After sending the money then there was shipping, my goods were less than a container (LCL) so they are shipped together with load others shipments. This is not the cheapest way to ship goods but we all got to start somewhere dont we?

long story short, it took another 2 weeks before the good were loaded to the contairner and another 4 weeks before the goods got to my country port. Clearing goods is straight forward in UK, you apply for a license, you give the number to the agent and the whole process takes a max of 3 working day ( that includes the waiting time and you never have to leave your computer). The import VAT and Duty are 20% and 5% respectively if applicable and are charged on the invoice issued by the seller.....pretty simple process Except for the custom agent......... shop around.

Voila, that is where my process of shipping goods from China to UK is at......it is much simpler if doing it to Kenya ( if you know your way around the corridals) or very complex if no one is holding your hand.

For me, i never thought I had the balls to import anything commercial size on myself.....but i have almost done it, and next time  i will even be smarter. For me, having almost done it has somewhat given me the licence to do whatever that i know i am capable of...

Please note i have made a mistake that is costing me around £300, but there is no way out. So, just bite the bullet and run with it. I am smarter of the process now

Moral of the lesson, it is so possible...... i almost did it! ( got to get the goods from the port to the house havent i?)

........taxes, taxes, taxes

I am well in the process of starting my online business and the truth be told, it is much simpler if you know exactly what you are selling, your target customer, your pricing and where to get the damn goods from. I just cannot believe it that it never occured to me to start one.....much easy when you actually decide to start one. Just be away you got to spend loads of time online, not selling but trying to figure things out......e.g. sourcing suppliers!

anyway, everything has been going smooth ( still trying to source the stock though) until i got the wind of the Import tax and Duty. Where i live, the tax man is super efficient. There is no way of getting round it (I wasnt thinking of not paying tax) but i suppose i was not aware of how high the import VAT and Duty is in UK. I thought the entire tax to get the goods in would be 20%, now it turns out to be 25% ( 20% VAT and 5% duty).... of course you still have to pay for the other small amounts like documentation, port security and etc etc .......the invoice is not to your choosing but you got to pay for it. If you dont pay for the Vat and the goods have to be destroyed, then you loose your time, the value of the goods and the cost to destroy them goods ......yes you pay for that too, it cost them something and since it were goods you gonna pay!

You kidding me right??

UK is one of the most high Tax countries going!

Buy Chinese from China Online!!!!.....Aliexpress.com

You don’t have to go to china to buy Chinese!

Ok, if you have read my blog, by now you know that I have a passion for business and I just don’t have the bank for it. Oh yeah, broke is the word but I refuse to let it put me down!

For those who already travel to china, I think this is a great thing to do. It is pretty obvious that the online prices given by these Chinese guys are much higher than the actual price of the goods on the ground. I have a friend in China – they Chinese and got no interest in dealing with buying and selling stuff – and they from time to time tell me how much they buy stuff on retail ( not wholesale) and this price is normally lower than the wholesale price listed on some of these websites. Clearly there are many entrepreneurial people out there. But my logic is that a flight to china and back is KES 110,000 approx. and as a business person you have to recoup this figure from your wares. This then means that if you don’t go over and buy the goods at a much higher place, you can still compete with these big wigs that fly to china to source their wares. That is just me thinking

Disclaimer: I have nothing against those who fly to china for sourcing; I just cannot afford it and have had to look for an alternative way to get the stuff

There is a good shipping agent in china for Kenyan stuff – they charge 29,000 shilling per cubic meter. Very expensive if you are shipping a bed or a sofa set from china but if shipping leggings, pants etc. the price is pretty good I think – obviously if you can get it cheaper why not? They also offer a sourcing service, where you tell them what you want and they go buy and then ship it over for you. They charge another 50USD for this service, the only problem with this; you get the same shit everybody is buying and thus you have to hustle harder to get noticed.

The guys are also very Kenyan, nothing bad if you don’t mind it. But after 3 weeks I am still waiting on the price of an item I requested pricing for…… sometimes I think I will just go to Facebook and look for Kenyan living in China – the only thing is that your hard earned cash may as well go to water the watering holes of China…… and thus I like Aliexpress.

I will include a few products I have bought from them for my EBAY here…..

High waist Leggings, love these!

Candy Colour Mini Skirt

www.aliexpress.com
my ebay

To join Aliexpress you will need a credit card and they only send the goods to the address on the credit card. They don’t send to P.O Box address at all. I live in UK now and I receive my goods OK ( except for one instance and the system refunds you anyway) but I still have not worked a way to get the good from China to Kenya from online without all these problems……. Food for thought, anyone?

Yoghurt Making supplies .......online address in Kenya!

http://finken.co.ke/index.php?option=com_content&view=article&id=27&Itemid=30&limitstart=4

Ok, for so many of you looking to start or grow your business, here is some information and a site link that may be of good use for you. Please note i havent talked to these guys or even used their products. However, i have had a look at their website and this is the most information i have seen on a site re Yoghurt and milk production supplies.

The site sells Cultures which i believe are a key ingredient to yoghurt production. They also do have a few more supplies such as packaging and although am not sure how much they cost - they are located in Westlands, so i guesse this is a good starting point of guessing how much they would be charging in their premiums.

Remember, you dont need the state of the art technology to start a yoghurt making operation. At present a small yoghurt ( 250 ml) goes for 90 shillings; a liter of cow milk goes for 25 shilling from farm gate. For this process to work you would need a fridge. As the process takes about 8 hours in the fridge, a small fridge costing 25k shillings would be great - you might need to rethink your power issues. If you have had a look at my blog you will notice backup power in Kenya is an issue and is also very expensive.

The market is not an issue as far as you are priced right, just walk around Nairobi and see how many people are walking about. The place is crowded, the shops are overpriced. You might need to geta few vendors in the market or roadside but it is very much doable if you ask me.

You dont need to be near or in Nairobi to do this, Nakuru and Kisumu are also heavily populated towns and most people would be looking for cheaper snacks or lunch thanks to the economy.

Anyway, above is the link, have a look and do a simple google on how to make Yoghurt......

Happy yoghurt making!

Cost of Air Travel from Kenya ......a Luxury and thus you got to pay for Aids programs!

I am loyal to my country but am also very extremely loyal to my wallet!

I recently been watching the whole discussion by NACC that we should tax air time more and air travel to support HIV aids projects.

Here is my beef with this approach, Communication and Air travel (Read Tourists) make up a good deal of total tax revenue in the country as well as a good number of employment opportunities for all alike. Targeting to make these two more expensive by taxing them more, in my view is going to lead to fewer jobs and maybe fewer tourists.

After all communication is one of the indicators used to determine the attractiveness of a foreign investment. Am sure coupled by the numerous lapse in security, Kenya will become even more undesirable for foreign business if the expats cannot travel or communicate cheaply.

We now live in a global community, whilst it is cheap to produce goods and services here than in most western countries, there are more countries attracting foreign investments other than Kenya. For instance, ten years ago who would have thought Rwanda would be a hive of foreigners. But with Kagame, that is all changed. Burundi used to be in the same shoes as Rwanda but they aren’t even closely related when it comes to foreign investment. 

Anyway, my opinion (my opinion) is that KACC people just want the money for their projects without considering what the knock off effect is on the entire economy. They seem to have forgotten that in February a prospective foreign investor said he couldn’t start a 24 hour call centre in Kenya due to security issue.

Sale of refurbished computers in Kenya

My simple research shows me that you can buy a refurbished computer for up to 30,000 shillings. This is pretty expensive in view that it is basically a used computer and its technology is at least 3 years old. 

Most of these computers are sourced from big companies who change their computers every 2 to 3 years to keep up with technology. They basically lease a laptop as you would lease a car. Why you may ask? For a big company with over 5,000 laptop users this would mean a heavy capital outlay which they may or may not be able to claim back all the VAT on depending on the country of operation tax rules. Most of them would like to have good profits and the best way to do it is by expensing the computer costs; the only way to do it is by leasing a laptop for 2 years. 2 years down the line the computer goes back to the owner and the company gets new ones. Obviously they don’t change the computers all at once but rather on a continuous flow.  

The owner of the computer would have recouped all the costs of the computer from the lease payments and will have no real profitable use of the used computers. After all, technology has moved on in the western world. They however know that poor African cannot afford the new computers and this is their secondary market where they make a few more coins out of the already used computers. They really don’t have to refurbish them, but their main client wouldn’t like their information all over Africa. So they would need to change the client specific hardware and ensure that there is no software and data on the computers before they ship them over. At this stage, the computer costs £65 each which amounts to 9,000 shilling or so depending on the foreign exchange rate. So how come the refurbished computers in Nairobi are going for 30,000 shillings? Surely taxes and shipping is not that much, or is it? This is a high profit margin business and with social media it turns out that you dont need a shop front to do it.....

Customer service In Kenya....my experiences!

Firstly I have worked in Customer Service and the saying that ‘customer is King’ was clearly upheld where I worked. It was clear that you were not allowed to have your mobile phone during office hours, couldn’t go on the web not unless it is company portal and had to pick any phone calls by the third ring. We were also supposed to operate within a given service level, for instance, if the customer requests for X, X should be delivered in X1 format (not unless customer specified otherwise) and in X2 days. If for whatever reason, you were not able to deliver the X in X2 days then you need to provide a good explanation why, in most cases, this wasn’t a problem as most customers are rational and human and can understand a thing such as system failure. The reasoning behind the above service level agreement is that the customer is expected to pay their bills on time and for them to do so they need to have full disclosure. 

Back to the Kenyan Case, Ken chic has a meal deal which is basically an addition of the cost of chips and cost of Chicken without a discount whatsoever. I can see why they would do this as the stuff would profit if there were a discount applied, but this is only because Ken chic doesn’t want to invest in a good point of sale software. If you ask for Ketchup which is clearly on the picture used to advertise the meal deal they tell you they don’t offer Ketchup as they have clearly stated. But if you still want a free one you can help yourself from the one on the tab that looks to have been made a month ago or pay 5 shillings to get what looks like a professional packaged product – still tastes the same. 

The same goes for Naivas and Tuskys, go to the counter and they don’t bother to look up and try act interested in what you may want to buy. The assumption is that they are doing you a favour. In Co-operative and Equity bank, the tellers all have their mobiles phones with them and at times you have to wait for a good 2 minutes for them to notice that you are there to be served. At the end of the teller tables is the manager/supervisor also very busy texting or doing something she clearly shouldn’t be doing. 

Probably one of the most interesting encounters I have had to date is the post office. I had a registered mail coming in, and even though the online tracking clearly showed they had my letter the lady said ‘if you don’t have the blue slip, please don’t waste my time’. She told me she wasn’t paid to go through many letters (5 on the table) to check which one had my name and tracking number on it. Once an Mzungu comes with a similar request, she bends over just as UK does for EU without a question. 

It seems like Kenyans are complacent of the bad customer service and most of them will not complain on this. After all you are paying for a service; you should be served with some level of importance. Kenyans are ‘nice’ people they don’t want to claim about the poor customer service, but lo I have complained and often will make someone feel uncomfortable about it to make my point heard. I don’t think I alone can make a difference but I do know if someone had a business and they wanted loyal customer, try good quality customer service. It is known to work! Simply having someone bag your stuff in the supermarket will not do it. Having someone treat you like a number whilst checking out will make someone think twice about going back to that shop; but where else do you go to as they are all the same?

Now that Thika road is opened up, will Nairobi food prices be cheaper?

One cannot help but assume that as the road network is much better along Thika road, the commodity prices should be cheaper. The food price is on the up, whilst this has to do with inflation, the middlemen are the only people cashing in on the advantage of better road network.

 

A cabbage in a Nairobi supermarket is going for 120 shillings, yet the farmer in Nyeri only gets 30 shillings at best. So where is the 90 shillings going? I don’t see why the middlemen and the supermarket guy need to go for 300% profits. This forms a cycle, the farmers don’t get good enough return on their produce, they stop producing, the prices shoot up and they go back to farming. The govt have made storage facility for the grains but a similar model should be made and applied for the horticulture field. Failure to this the food prices will always fluctuate and there will always be a risk for drought. 

4 potatoes sell for 20 shilling in the same supermarket whilst a sack goes for 2,500 shilling in the Marigiti market – clearly if you don’t have the ball for it, you will not want to go to Marigiti but this doesn’t justify the ridiculous pricing of food by the middlemen. However, this makes me believe the popular belief that Mama Mboga makes more money than most white collar employees. She works Monday to Monday and could make up to 2,000 shilling profits a day; this tallies to 60,000 shillings a month with no means of taxing her.

Kenyan taking Shortcuts in Business,

There are many people in Kenya taking shortcuts in Business. The idea of using something cheap and of low quality is only very prevalent in Kenya. Even the KEBS sign no longer signifies basic quality.

For instance, take shampoos in Kenya. The most popular shampoo in the market is nice and lovely at the moment. Having a closer look at the shampoo it is just but a basic shampoo that dries your hair and has lather on it. There is the claim of proteins and oils in it, but if you don’t add oil by someone hasn’t come up with a better Kenyan made affordable shampoo. The reason may lie in the fact that most manufacturers will not sit and watch you bring something better in the market. They will do whatever it takes to get their products cheaper or make yours not stocked in the supermarket shelves.

The quality issue runs deep with clothes and shoes alike. Most of the Bata shoes nowadays are from China despite the fact they still claim to be a Kenyan manufacturer who employs local people. Well they do employ local people but with all the years they had of a shoe market monopoly they should be able to produce better quality shoes than the overpriced plastic ones they source cheaply from China.

This is the same for the so caller Vision 2030 Juakali ventures. I have blogged about Flamingo enterprises in Nakuru; they basically are a big shop stocked with Juakali stuff which in most cases costs more that the factory manufactured good which have been tested. They sell a 200 egg incubator for 156,000 shilling, the same is sold by China importers for around 140,000 shilling and a 240 egg incubator goes for 65,000 shillings by Eco chick. Whilst clearly information is power in making informed decisions, clearly the juakali pricing is irrational and there is no quality justification at all.

Kenyan Chicken farming information ----Incubators

Well, if you want to make money in Kenya as a chicken farmer, you need an egg incubator. This is because you can control your chick supply and the cost of the supply. There are many sources of fertilised eggs. Dorep and Kenchic being one of them. You just need to once in a while get good eggs/chicks from these organisations to start the breeding yourself. 

I woke up positive, the day was bright. I think the sun is up at just before 6 and goes down at almost 7 in the evening. I suppose this is what we would call summer, but then again the sun crosses the equator twice a year I think 

Anyway, I made a phone call to go see the state of the art automatic incubator which I was proud of. I made it there about 1 hour late but I did let the guy know he didn’t have to wait for me, but he insisted on waiting for me.  

The state of the art incubator cost KES 65,000 and is the cheapest in the market. They all kind look the same. They are basically a box with a thermal stat and water tube at the bottom couple trays to hold eggs and an on and off switch. They have painted it blue which I suppose is supposed to show a professional job. The machine operates on a normal 100 watts bulb and a computer fan. Clearly the KES 65,000 (approx £500) is too much for this box. At one point I thought of saying this is a cheat, and then I remembered this is something Mike would actually build for me. Why buy one expensive one, whilst I could have mike make one for me and maybe build a business around it? Obviously I would change a few things, but I would not include a mini computer. The fact is that this is a machine which could be used to eradicate poverty. Better yet use it together with the DOREP farmers.  

I also collected eggs from DOREP offices for incubation. Am not sure an Incubator is the way forward without a power backup, plus the machines are just a heavy capital outlay for what they are.

Starting a Business in Kenya------other steps!

Following on from my previous 5 posts on steps to start a business, this is the final post on that specific series although i could revisit the topic in future. Please make sure to read the other 5 steps. 

Other Steps….

To be able to open shop, you would need to make sure that you have sufficient documentation to avoid the city Askari from invading you business and penalties that go hand in hand with this. Be sure to acquire the correct business licence for the business. Similar businesses will hang their licences on display and can get the office of registration from the licence. You don’t need to pay someone to do this for you but you might need to queue up in a certain government office for long hours to get your licensing. Bear in mind that Kenya is known for its slow processing of licenses and you might need to factor this into your planning stage to avoid frustrations. Ideal get your licensing sorted out before you move into your rented premises to avoid dead rent.

Secondly, you would need to know the source of your inputs. If you are starting an kiosk, you need to know where your unga and maziwa comes from as well as if you need to arrange for your own delivery or there is a delivery service. You would also need to determine the cost and opportunity cost of such a delivery service. When choosing a supply, you need not be loyal to any if none of them are giving you credit facility.  

Thirdly, you will need to consider you process set up. For someone looking to start making sausages needs to consider the layout of the table. For instance, the raw meat and the cooked hams shouldn’t be on the same kitchen table due to contamination. You would also need to bear in mind where the storage is such that staff aren’t moving about too much in the kitchen which could be a safety hazard.

Fourthly, consider your labour needs. At the start this would be hard to gauge as you dont know how the take up of the business will be. The best thing for you to do is engage temporary labour i.e. you have not committed to pay them a monthly wage. After a month or so, or when you have substantial orders you might want to take on full time or permanent staff as their jobs would be justified for

Good luck with your business start up - hope that you found this information helpful in any way.

Starting a business in Kenya ....Step 5!

First customer,

First Customer; you can only make a revenue by selling your products/services. By this stage you would mostly have sold a few products to friends and family. These groups are in most cases your support system and also the first customers.

However, you need more customers to break even. They could be total strangers or repeat trade from your initial sales. Your main focus is to get some new customers and not so much to breakeven. You should have determined the selling prices and such small but important details such as packaging, receipts or not receipts. My word of advise here is to maximise any opportunity to advertise, you don’t need to have a big budget and neither do you need to have a billboard. Figure out how to reach your target consumer. For instant, for the young Kenyans, facebook and other social media would prove a useful and free tool. Don’t also forget to sell yourself and your product. If you don’t believe in you product, chances are nobody else will.

Use Google Trader to post items for sale for free. If doing this be sure to clearly state your price, your location and other contact details you may have. The advantage of this link is that it is free at the moment.

Other Free advertising chanels that will get you noticed is www.nairobi.dealfish.com
As is with all adverts remember to include all the information; dont fall into the trap of most kenyan sellers who dont put the price on the web. The intention of your advert is to draw customers and the best way to do so is to provide full information on your products before hand.

Starting a business in Kenya ....Step 4!

Follow on from Step 3 (Last week)

Location, Location, Location!

Choose a location for your business.  A majority of businesses in Kenya are in urban areas. This might be a prime location and thus a premium rent would be needed to secure such a space. As a business start-up being realistic on what costs to incur would indicate that a cheaper location would be more appropriate. For a non service business e.g. manufacture of furniture, doesn’t need to be in an urban area. However, having a shop front in Urban area might be advisable due to human traffic and purchasing power of city dwellers.

Rural areas do present opportunities for cheaper labour, rent and overheads such as water and power. However, there would be an added cost of transportation and security. For a shop front however, a location with high foot traffic would be more appealing. You can share a shop front or boutique with another business start up with complimentary business and hopefully not competing. For instance if you are a shoe seller you could partner with a cloth seller as the two go hand in hand. Be careful in choosing your partners in business and don’t give away your secrets even though they may seem friendly.

Note you dont need to start with the best location in town to make it in business, there are many businesses which started in back alley and have made it to the top of the chain. Consider the cost element and your capital to make this decision.

Starting a business in Kenya ....Step 3!

Following on from step 2!

Value your business. In most cases if not all, no one but your parents would be willing to advance you any monies towards a business idea if you have not already started. For Equity bank and many other SMEs, they would want you to be operational for say 6 months. The financial institutions would like to be sure that you are in a position to repay any monies advanced. As such they would like to see the statements you would have drawn to determine if your business is profitable/viable or not. Whilst professionally drawn up accounts aren’t necessary, basic records clearly showing sales and expenses should be expected. Don’t be tempted to understate the costs, after all not many businesses are profitable in the first 2 years of operation. Understatement of costs may signal your naivety in business and could work to your detriment.

For the Cooperative bank of Kenya, the minimum period of account operation prior to advancement of loan is 6 months. They would also need to see that the account is active; as such you need to make daily drawings and deposits. It is advisable to start the business on a small scale until you are able to have some orders/customer to present to the bank. You don’t need to start the biggest spa treatment in town to make it. The trick here is to deposit all your daily takings even though it means you go to the ATM and withdraw the following morning. This way the business development manager in the bank can see that you have actually been making sales and that you are not just claiming to be in business.

For Co-op bank the relevant bank account is Haba na Haba to qualify for an SME loan. Even though you dont need a loan, you might want to take a small amount at the start, this will cost you interest rate but it will earn you credit worthiness with the bank for future loan reqirements.

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.

Starting a business in Kenya ....Step 1!

I have been researching and documenting the steps of starting a business. In the next couple of weeks I will be blogging about all the 5 steps. These are my findings but then again there is no one agreed formular on how to start a business.

For most of us, the ideal dream is to be own boss if we aren’t already there. However, having the passion to start a business and actually getting the business going are two very differing aspects. Below I list the steps into starting a business. 

Step 1

Idea and product formulation phase; in this stage, you should come up with an Idea which you perceive as unique and one capable of making a business. Don’t fall into the trap of following the band wagon like most of us Kenyan do. Don’t buy a plot just because your friends have. Do substantial research around the idea, the proposed market and target customer to determine the viability of the idea. A good starting point is in a line of experience. For instance for someone who works for a bakery, knows of the business models and the costs and revenues involved could be better suited to start own bakery delivery bread or cakes at a cheaper price rather than investing in Jewel cutting for instant. Don’t hesitate to start a competing business as your employer; chances are they too started their business in the same way. Don’t be afraid to ask other traders, you might find a solution to their problems. Also remember, whilst we envision our business to be successful making a lot of money you must watch all your cost whilst not compromising on quality. Don’t invest in a saturated business area, for instance don’t open a mobile phone or clothing boutique in Moi Avenue not unless yours is very different. However, you could become a wholesale in the same area targeting small start-up or businesses which might not be able to raise enough cash to bring in a big load from the suppliers (for the case of imported supplies). Don’t be afraid to trail other blogs to see what other aspiring entrepreneurs are in search of.

Next week -----------------Step 2

Wool Business......there is money to be made!

Knitting Needles and Knitting wool

Moro, Kinangop and other cold places are key zones in the country for wool production. Having visited a couple farmers in Nakuru area I do know that the wool business is big in Kenya. If you go on Alibaba you will find 3 or so adverts on Kenyan wool which is greasy and at best doesn’t look appealing. The fact is, this is the minority of the market segment in wool trading in Kenya

In Nakuru I have discovered than Indian Merchants are controlling the wool trading and market. They sponsor middle men who then buy the wool from the farmers at low prices; they wash the wool and sell it to large wool yarns and carpet manufacturers abroad without using Alibaba. The middle man sell the wool at 200 shillings a kilo in the black market (this is where I get my wool from) so the farmer get at most 100 shillings a Kilo. This amounts to less £1 per kilo of wool. The same kilo is then sold at $10-$20 once shipped out. This is more like 800 Shillings for a kilo.  The Indian merchant sells the wool in tons. For a single ton (1000 kgs) he stands to make a profit of approx 700 shilling a kilo and less the shipping of say 50 shillings a kilo, he would still make 650,000 per a ton of wool. Now this is some good money for an investment of 200,000 shilling. Clearly you do need to obtain some documentation such as the Certificate of Animal health from the ministry of agriculture – but that only costs you 50 shilling a shipment. With the shipping cost being approx £4 a kilo by air and $600 per m3 then the guys do make even much more money that they are putting in the system.

As a result of this practice, they not only export the jobs abroad but also make it impossible for fair competition for wool in the country as they have a tight grip of the wool producing area.

A kilo of Merino wool goes for £12.20 wool off www.alibaba.com from China - and this is the cheapest in the market. Of course this is degreased, washed and combed wool ready for spinning and felting etc. Just think of it unwashed raw wool in kenya is going for £1.00 from the brokers meaning you can get it cheaper than that off the farmers directly ......i admit am crazy about wool, so this might not be for everyone.

combed wool socked in vinegar for 30 minutes ready for dyeing

raw washed wool ready for combing or carding.

The end product, hand dyed wool ready for spinning or felting

Have a look at www.etsy.com to find out how much wool goes for in UK and USA for the big demand by the hobbists.

also check out my other blog www.spunandknittedwool.blogspot.com on inspirations on how to process wool for the hobbist market.

Naivas ....'saves you money'!........clearly NOT!

The price of extension leads in Naivas

I don’t know how I feel about Naivas. I know that you need money to make money and these guys clearly do have some money. There is Naivas everywhere you turn in Nairobi.

The shops are overstaffed and their staff don’t wear uniform. I personally think that supermarket staff should be uniform for easy of identification by customers. Imagine if you were to go ask a fellow shopper where you can locate a bar of soap and she happens to be Wanjiku from Nyeri? Anyway, this is how Naivas like to do

As part of my own amusement I like to look at certain item prices and blog about them for no apparent reason. Last week I went shopping for a mosquito Net. The cheapest was 450 shillings whilst the most expensive was 2,050 shilling. I am not sure what the difference is apart from the fact that one is medicated and blue whilst the other is non-medicated and white. The fact is that such price differential is just unjustified; the quality looked the same. The cheaper one (which I bought) was made in Kenya whilst the other was sourced from China. It begged the question how come some Charities advertise in the UK media that it costs £10 (1,300 shillings) to buy a net for a disadvantage poor African? I wonder why cannot they buy the nets from the Kenyan Companies and am sure if they bought in bulk they would get each at 300 Shillings.

The other item of interest was the power extension cables. Each go for 1,500 shillings and if you are lucky you can get one for 2,400 shillings. I cannot help but think that I buy the same thing in IKEA at £4 less than 600 shillings. As the taxes are higher in UK than they are in China and Kenya I would expect the same item to go for less than 700 shillings; but I am sure Mr Naivas pocket are well lined with the shillings.

Anyway there is my rant at Naivas – ‘saves you money’ is the tag line!

Where to sell your chickens in Nairobi?

If you have started rearing or thinking of starting rearing chicken, the most important question is where do you sell your birds and for how much?

For most, this is a daunting aspect that can make or break your business plan. The bottom line is that People in Nairobi  and other Kenyan urban areas do not farm and they somehow have to buy all the meat they need. The market is there, it is just not streamlined and you might need to think outside the box to actually get access to it. Dont be afraid to join forces with other farmers who are in the same dilema about the market.

I have done some sketchy observations on the chicken meat/live bird distribution in Nairobi. Nairobi because this is where the biggest market is, you will find that most of the rural dwellers do actually have a few birds which they keep for their happy occassions.

Chicken Business! Source - Internet!

First, the road side sellers are a good supply chain.
Secondly, if you live near Nairobi, for instance Thika or Kiambu dont be afraid to approach Hotels and offer them free delivery. They will need you to supply a sample before they can order

Thirdly, approach butcheries, they might be willing to stock chicken if you can deliver on a regular basis as per their needs. Whilst one butcher might only be willing to buy 10 chickens a day, 10 butchers on the same area each buying 10 chicken a day amounts to 700 chickens a week. If you are aiming to sell chicken on a regular basis, you would need to reflect this on your growth cycle. For instant if you make one delivery a week of 100 birds, you should be have approx 120 day old chicks every week to ensure the continuity of the supply.

A day old chick from Muguku goes for 78 shilling and 80 shillling for the Kenchick type - these mature in 5-6 weeks. They weigh around 1.2 - 1.8 kgs when slaughtered depending on the feeding

The dorep and Kenbro type mature at 6-8 weeks and can weigh up to 5 kilos depending on how you feed them. One day old chick goes for 90 shillings and if you dont get a market at 2 months you can grow them to layers. They would start laying at 5 months if well fed. They lay until they are 18 months old when ideally you would sell them for meat.