This Business Starting Guide Can Change Your Life.

You've probably thought about starting a business in Kenya but how to go about it became the impediment. 

You probably want to start a business in Kenya but are unsure if your idea or your product would work; if it doesn't, you lose your hard-earned capital.

You probably would like to start a business in Kenya similar to one you really admire - just because you see a lot of customers there or you think they are making a lot of money.

A short story about Mr. Titus.

Growing up in Central villages of Kenya, there was a guy we called Mr. Titus. 

Mr. Titus was a primary school teacher who also owned the biggest shop in the small village I grew up in.

He walked briskly and smoked Embassy cigarettes, a sign of well-being and prestige. We respected and admired Mr. Titus and as kids, no one dared mention his name without the salutation: Mr.

We literally admired his lifestyle, which made me dream that one day, I'd want to own a store just like Mr. Titus's.

Today, I do not own such a business because, over time, I have discovered that almost anyone with access to the internet can start and succeed in business in Kenya.

In this detailed guide on how to start a business in Kenya, You'll learn:

• How to completely disregard the so-called business plan before you start - and succeed

• How to test if your idea is going to work before you waste your hard-earned money

• How to outperform existing businesses that only exist just because they copied another business

• How to get paid before you even have a product by customers begging you for more.

• Registering a proven business model in Kenya (Legal requirements)

For the purpose of this article, I will use beauty and cosmetics as the business example.

There are common stories like:

I tried so many businesses for so long before I got something that stuck. Ever heard such stories?

Steve Blank is an Ivy-League school professor at Stanford University who coined together a business model that works and never fails - eliminates the trial-and-error gamble.

Steve noticed that most successful entrepreneurs only succeeded past their 40s after so many mistakes (other than outlier college dropouts like Zuckerberg & Bill Gates) until they put the customer first.

Is Business Plan a Sham?

A traditional business plan demands you write your guts out about how you think your business should be run.

It starts with complicated financial planning and if you have a big idea but little or no capital, according to the traditional business plan model, your idea is dead on arrival.

Steve Blank proved that a business plan should only be written as an operating document for an existing business and never before the first contact with the customer. 

The traditional business plan ends with a marketing plan but Steve flipped that upside down and he wants you to start with discovering the customer first.

 Starting a Business in Kenya: The Customer Development Model.

To successfully navigate through your business journey in Kenya, you've got to first understand the Kenyan market's unique characteristics and consumer behaviors.

You're not just starting a business; you're stepping into an intricate web of cultures, traditions, and distinct consumer patterns.

It's a market that thrives on authenticity and quality, particularly for beauty and cosmetics businesses.

In Kenya, the beauty and cosmetics industry is growing rapidly, giving you a unique opportunity.

Starting a beauty and cosmetics business in Kenya requires a deep understanding of the local market trends and the ability to offer high-quality, authentic American products that can stand out on the shelves.

Let's now assume that the cosmetics/beauty business is a lucrative business in Kenya. This assumption is called a business hypothesis - a tentative answer to a question that has not been proven yet.

Before you jump in signing expensive leases, borrowing loans to start a business, and making all your friends your enemies because of how much you owe them, Steve wants you to first, test if your idea is going to work or not.

1. Customer Discovery

In fact, these four steps pronounce Steve Blank's book called "The Four Steps to Epiphany".

This book changed my life - literally. I wasn't starting a shipping business, I had started an e-commerce website but I listened to what customers needed more. How to ship US products to Kenya, fast and affordably. That's how Kentex Cargo was born.

In the first step, Steve wants you to get out of your building, go to the streets, and talk to customers to find out if they would buy what you're thinking of selling to them.

Until you have overwhelming  "YES" that they'd buy your product, you shouldn't start. 

While you're talking to them, find out what else they'd want to buy or additional features they would want to have.

If such new products or features were not in your initial hypothesis, Steve wants you to quickly adjust or pivot to exactly what they want.

Because I love digital marketing and it is easy to collect data from millions, I prefer using social media platforms to collect data - for the first step - customer discovery.

Here is my method of doing it and you should copy/paste it...

1. Define Your Hypotheses:

• Start by clearly defining your initial hypotheses (assumption) about your product or service, including who your target customers are and what problems your product would solve.

2. Identify Relevant Groups:

• On Facebook, search for and join relevant groups that align with your target audience and product. These can be industry-specific groups, hobbyist groups, or communities related to the problems your product addresses.
• On Instagram, look for relevant hashtags and follow accounts that your target audience engages with.

3. Engage in Conversations:

• Actively participate in group discussions on Facebook by sharing insights, asking questions, and offering valuable information related to your product's domain.
• On Instagram, engage with posts using relevant hashtags by leaving thoughtful comments and liking posts. This can help you start conversations and build relationships.
• Follow those who are asking questions specific or related to your hypothetical product... this is a superpower. 

Do this right now... go on ANY social media and follow one specific topic/account - doesn't matter. 

If for example, you go on Instagram and follow beauty stores, by the time you have followed 10 of them, IG starts suggesting even more for you.

On your Facebook, go do the same - follow the same as you did on Instagram - you'll notice they'll suggest even more you never knew about.

Do the same on TikTok - follow or view content - say on how to cleanse acne face. You'll notice the algorithm will start bringing you more and more acne content.

Try it on Twitter - they all use machine learning - you start following and commenting on certain topics, more is poured on your timeline.

... and so are ads.

Can I get paid for spilling the beans?

4. Create and Run Ads:

• On both Facebook and Instagram, create targeted ads to test your hypotheses. You can use Facebook Ads Manager for this purpose.
  • Once you have about 200-400 followers, Meta AI and machine learning technologies will start understanding who you're trying to reach - and they'll bring them in mounds. 
  • It is better and safer to spend a few hundred of dollars to test if your assumption is true than to open stores, buy inventory only to lose everything, and close down with no sales. You're buying data.
• Define specific demographics, interests, and behaviors to ensure your ads reach your intended audience.
• Run multiple ad variations with different messaging, images, or offers to see which resonates most with your potential customers.

5. Collect Data and Feedback:

• Monitor the performance of your ads and track key metrics like click-through rates (CTR), conversion rates, and engagement levels.
  • I like selling a vanity product at discounted prices promising to deliver in X- days for pre-orders. Apple does that for their iPhones.
• Pay attention to comments, messages, and feedback from users who interact with your ads or engage with your posts in groups. This qualitative data can be invaluable in understanding customer pain points and needs.

6. Iterate and Refine:

• Based on the data and feedback you gather, iterate on your hypotheses and marketing strategies. Use agile methodology to quickly change, adapt, or pivot.
• Adjust your target audience, messaging, or product features as needed to better align with your customer's preferences and pain points.

Boom!

7. Scale Your Efforts:

• Once you have validated your hypotheses and refined your approach, consider scaling your efforts on Facebook and Instagram.
• Increase your ad spend and expand your reach to a broader audience while maintaining the same iterative approach to optimize your data.

8. Build a Community:

• As you gain insights and validate your product, focus on building a community of engaged customers on social media. Encourage discussions, share user-generated content, and provide valuable resources to your audience.
• A Facebook group is an example of a community. For example, Acne Group, Dental Care Group, etc.

By Now..

• You know how to first discover the customer before you buy expensive stuff to sell, only to come and fail
• You know what to look for and where to find your potential customers - social media.
• You know how to get paid first before starting - Apple does it with iPhones - this is where we say, put your money where your mouth is. 
• How to scale to refine your data, make changes on your assumptions or completely pivot.

2. Customer Validation Tests: Is the model repeatable and scalable?

Steve wants you to determine if the customers you found in step one are "One-night stand type" or if are they a true marriage. 

He also wants you to determine if they are a handful or if they are plenty - like hyenas... we are many 😂

I like businesses where a customer keeps coming back for more and when they come, they see and wants more. 

If you ship by air a lipstick and a lotion with us and you get it, the next time you need a phone, you're likely to use us - the same way you shipped your beauty products with us.

When you need bulk stuff for your new home for ocean shipping, you'll trust us to handle your shipments the same way we handled your lipstick and your second purchase.

You're a repeat customer ascending up the value chain.

In this case, our business model is repeat business.

1. Confirm Your Business Model:

• Before diving into customer validation, ensure you have a clear understanding of your business model. This should include:
  • Your value proposition: What unique problem does your product or service solve for customers? In our case and some people hated us for it, we want you to avoid fake products from China... - shoot me!
  • Revenue streams: How will you make money? (e.g., subscription fees, one-time purchases, advertising revenue, repeat customers)
  • Customer segments: Who are your target customers? (e.g., demographics, interests, behavior). This is what is called, Buyer Persona (Avatar). 

We have never delivered a package to Maragua - Murang'a the last 9 years.

But we have dedicated riders to deliver in Kilimani, Kileleshwa, Lavington, etc - you get the point.

We also deliver a lot in Kisumu Dala 😂 and a few pockets in Mombasa like Nyali.

This is our buyer persona - Avatar based on residence. 

You use Meta demographics to tell you even their age, marital status, and education level. That even determines the language you use when addressing them.

• Example: If you're developing a fitness app, your business model might involve offering a freemium subscription with additional features for a fee, targeting health-conscious individuals aged 25-40.

2. Define Key Metrics:

• Choose specific metrics to track the success of your business model validation, such as:
  • Customer Acquisition Cost (CAC): How much does it cost to acquire each customer?
  • Customer Lifetime Value (CLTV): What's the estimated value of a customer over their lifetime?
  • Retention Rate: How many customers continue to use your product over time?

    • This is so powerful that we had to open a new tax-free warehouse in Delaware where our customers can shop in the USA without paying sales tax. We need to retain you.

• Example: If you're running a subscription-based laser cosmetic service in Kenya, your key metrics might include a CAC of $30, a CLTV of $300, and a monthly retention rate of 50%.

3. Create Customer Personas:

• Develop detailed customer personas based on insights from your customer discovery phase. A persona should include:
  • Name, age, and demographics
  • Pain points and challenges
  • Goals and motivations
  • Behaviors and preferences
• Example: If you're selling organic/chemical-free cosmetic products, your persona could be "Eco-Conscious Emily," a 42-year-old urban professional banker in Lavington/Kilimani who values sustainability and seeks convenience in eco-friendly products for her skin.

4. Build Landing Pages:

• Create dedicated web pages (landing pages) that explain your product or service's value proposition. Include clear Calls to Action (CTAs) to guide visitors toward taking action, such as signing up or making a purchase.
• Example: We have a very specific landing page for iPhone lovers (not Android, etc) and we compel them to not take chances with fake iPhones flooding the market.  (See it Here) 

5. Set Up Social Media Profiles:

• Establish and optimize your business profiles on Facebook and Instagram to reflect the pain you alleviate or the problem you solve. Include a compelling bio, profile picture, and links to your website or landing pages.
• Example: Your Instagram profile is for acne products or deodorants. Please don't write that your page is about "Authentic Deodorants" or "ProActiv products". Instead, narrow down to the data you got in step one based on your hypothesis - say... Acne is a problem in Kenya... then coin it with value proposition - the differentiator from the rest... Chemical-free acne products, and then use the result (not the product) to form your tagline like...

  • We help you get clear & smooth skin (desired outcome) without using cancer-causing chemicals (parabens, etc) on the streets... A powerful emotion provoking & fear avoiding tagline.

6. Run Paid Advertising Campaigns:

• Utilize Facebook and Instagram advertising tools to create and manage paid ad campaigns. Consider various ad formats (image ads, video ads, carousel ads) to showcase your product or service.

7. Measure Conversion Rates:

• Monitor the conversion rates on your landing pages. Track how many visitors take the desired action, such as signing up for your newsletter or making a purchase.
• Example: If your landing page receives 1,000 visitors and 100 sign-ups, your conversion rate for sign-ups is 10%.

9. Gather Feedback:

• Engage with users who interact with your ads and landing pages. Collect feedback through comments, direct messages, and surveys to understand their pain points and objections.

  • I like using Zapier app to populate a spreadsheet with certain keywords so I can compare which keywords are more common. This is an advanced skill.

• Example: If you're promoting acne products, you can gather data for users who commented using words like "whiteheads", "blackheads", "Acne scars", "Oily skin", etc. 

10. Analyze Metrics:

• Continuously analyze key metrics to assess the repeatability and scalability of your business model. Determine if your CAC is sustainable if your CLTV justifies your acquisition costs, and if you can scale profitably.

  • For example, At Kentex Cargo, we are willing to break even the first time a customer ships with us. They are very likely to ship the second and 10th time.

• If your CAC is $20, and your CLTV is $500, it may indicate that your business model is repeatable and scalable, as the lifetime value of a customer exceeds the acquisition cost.
• Cosmetics and beauty-related businesses are often repeatable and scalable.

11. Pivot or Persevere:

• Based on the data and insights you gather, make informed decisions about whether to pivot (change completely) aspects of your business model, marketing strategy, or product offering. Alternatively, you might decide to persevere (stay there) if your model proves successful.
• Example: If your initial product messaging isn't resonating with your target audience - making you money, you may pivot by refining your value proposition based on customer feedback.

  • We compared "We ship from USA to Kenya" Vs " We help you avoid fakes and get quality name brand products" from USA to Kenya in a video ad and the results were like day and night. 

12. Scaling Strategies:

• If validation is successful, explore strategies to scale your customer acquisition efforts on Facebook and Instagram. Consider increasing your ad budget, expanding target audiences, or testing new ad formats.
• You'll never make millions with a $5 ad spend. Crank it up until you reach a plateau.

13. Customer Support and Retention:

• As you acquire more customers, focus on providing exceptional customer support and implementing retention strategies to maximize CLTV.

14. Continuous Optimization:

• Maintain a culture of continuous optimization. Regularly review and refine your customer validation strategies and tactics to adapt to changing market conditions and customer preferences. New trends can bury you in your old beliefs if you do not evolve, cope, and keep up with what is new.

HINT: Somewhere around this phase, if your data is compelling, it is time to register your company in Kenya. This time, you are not guessing if it will work or not, you know it will work.

3. Customer Creation 

I'm sure you're like - are not done yet?

The first step we discover that customers exist. The discovery phase.

In the second step, we validated them and we designed our business model. 

We know they are out there but we have not created our own customers yet. This is what we'll work on in this step.

1. Awareness Campaigns:

Facebook & Instagram Broad Reach Ads

• How to use: Utilize Facebook Ads Manager to create campaigns with the objective of "Brand Awareness" or "Reach." These campaigns should introduce your brand and product to a wide audience. For
• Data & Insights: Monitor reach, frequency, and recall lift in Ads Manager. A high recall lift indicates that your ad is memorable to the audience.

Hint: Due to advanced AI on Meta algorithms, do conversion ads right off the gate. You'll start making sales right away although you still need to create a lot of awareness as you sell.

Engaging Content Posts

• How to use: Regularly post engaging content about your product, behind-the-scenes looks, customer testimonials, and more on these platforms
• Data & Insights: Use Instagram Insights and Facebook Page Insights to track post engagements, shares, and saves. High engagement indicates resonating content. 

Hint: My favorite metric is "Saves" and "shares" especially on Instagram. These are very good for retargeting with ads later

2. Demand Generation:

Limited-Time Offers & Promotions

• Create posts or ads promoting special deals, discounts, or offers for a limited time. This creates urgency.
• It's even better when you plan and schedule a soft launch for your business - only if you have the capital.
• Data & Insights: Monitor the uptake of these promotions through conversion rates, engagement on promotional posts, and sales metrics.

• Organize contests where participants can win your product or other incentives. Often, these require users to share your post, tag friends, or use a specific hashtag.
• Data & Insights: Track participation metrics, new follower counts, and engagement spikes during contest periods.

3. Community Building & Engagement:

Facebook Groups & Instagram Close Friends Feature

• Continue to foster the community you built during the validation phase. Use Instagram's "Close Friends" feature for exclusive content or offers.
• Data & Insights: For Facebook groups, monitor metrics like active members, post interactions, and group growth. On Instagram, track engagement metrics for "Close Friends" stories.

4. Collaboration & Partnerships:

Collaborate with Complementary Brands

• Identify non-competing brands that share your target audience. Collaborate on cross-promotions, giveaways, or joint content.
• Data & Insights: Analyze referral traffic, co-branded content engagement, and any growth in followers or customers from these collaborations.

5. Retargeting for Sales Funnel Movement:

Sales-focused Retargeting Ads

• Use Facebook Pixel data to retarget users who've engaged with your content or visited your site but haven't made a purchase. The ads should focus on converting these users, maybe by showcasing product benefits or user reviews.
• Data & Insights: Monitor the conversion rate, Return On Ads Spend (ROAS), and click-through rate of these retargeting campaigns in Ads Manager.

6. User-Generated Content & Advocacy:

Encourage Reviews and Shares

• Ask satisfied customers to share their experiences on Instagram or Facebook, use a specific hashtag, or tag your brand.
• Data & Insights: Monitor the frequency of user-generated content through hashtag tracking or mentions. High frequency indicates strong customer satisfaction and advocacy.

4. Forming the Company

1. Business Concept Refinement:

• Begin by defining your cosmetics/beauty product line, target market, and unique selling points (USPs). Ensure that your concept aligns with the Kenyan market.

2. Legal Structure:

• Choose the appropriate legal structure for your business, such as a sole proprietorship, partnership, limited liability company (LTD), or foreign branch office.

3. Business Name Registration:

• Register your business name with the Registrar of Companies in Kenya to ensure it's unique and legally compliant.

4. Business Plan and Strategy:

• Develop a comprehensive business plan outlining your company's goals, marketing strategy, financial projections, and customer acquisition plan.

5. Licensing and Permits:

• Obtain the following licenses and permits required for cosmetics retail in Kenya:
  • Kenya Bureau of Standards (KEBS) Manufacturing License: Required for cosmetics manufacturers to ensure product quality and safety.
  • Pharmacy and Poisons Board License: If your cosmetics contain pharmaceutical ingredients.
  • County Business Permit: A local business permit from your respective county.

6. Business Registration requirements in Kenya

A. Name Your Business

• • Sign up on eCitizen platform
  • Conduct a name availability check & pay associated fees
  • Secure your desired business name

B. Formalize Your Business

• • Complete and pay for the formal registration process
  • Provide all required signed documents
  • Receive your official business registration paperwork

C. Get Set Up with the Tax Authority

• • Initiate your business's KRA pin application
  • Hand in the confirmation receipt of KRA pin application
  • Acquire your business's official KRA pin

D. Secure the All-in-One Business Permit

• • Get your business permit application verified
  • Evaluate the necessary licensing costs
  • Receive and settle the invoice related to licensing
  • Finalize payment and receive the comprehensive business permit

E. Register with NHIF for Employee Health Coverage

• • Commence the process for NHIF employer onboarding
  • Acquire your designated NHIF employer code

F. Onboard with National Social Security

• • Start the registration process for employer's NSSF
  • Secure the NSSF employer's certification

If you have read this blog post entirely - every word and you'd like to start a business in Kenya, Follow us on TikTok. I talk a lot about starting and running a business.