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Challenges Facing Small Businesses in Kenya

A small venture is the backbone of all government’s GDPs. Small businesses create jobs that contribute to economic growth, aid industrial development, satisfy local demand for services, innovate and support large firms with opportunities. In the government of Kenya, small ventures provide a significant percentage of employment and source of income to the population, In Kenya’ 70 % of businesses fall in the category of SME’s, Basically, the small business traders are key in the growth of the economy of the government of Kenya.

SME’S In Kenya faces many problems and challenges which I will address in the following paragraphs. This article will look into some of the challenges Small ventures go through, especially challenges and tough situations to SME growth

Lack of expertise experience

Often, small and medium businesses engage in managerial strategies through trial and error system. Their managerial techniques only focus on operational plans rather than strategic plans of their organization. In addition, these managerial techniques are not standard with those of other global managers.

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Consequently, managers of small and medium enterprises are not able to adequately handle challenges facing enterprises.

Lack of knowledge about what is working and what is not working in the business can be an issue. Often companies do not gauge their output and when something unique causes a blip (positive or negative) in results they do not know what has caused the successor problem.
Implementing a process for measuring and tracking key performance indicators (KPIs) on a weekly, or at least monthly, the basis is key to enabling management to react to challenges and opportunities alike.

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The old saying that you cannot manage what you do not measure is so true. If nothing else, it often alerts you to a change from the norm much sooner than waiting until you otherwise become aware of it. Once awareness is established, solutions are easier to find.

Customer Care

Any entrepreneur knows that “Customer is always right”. If a business is an engine, then the customers are the source of the fuel(income) that runs it. You have to maintain and keep the source at any cost. bad sales will definitely lead to the collapsing of the business. Big enterprises have mastered the act of customer care and management and use thousands of dollars each year in achieving this.

New laws /legislation

Every day, the government and other stakeholders continue to introduce new laws for industries and enterprises in Kenya. New legislation is being passed in a bid to regulate the operations of enterprises. These laws are also meant to spearhead sustainable economic growth in the country. However, such regulations sometimes pose a tremendous threat to the growth of small and medium enterprises in Kenya. This is because some of these laws are too tough..

Financial planning

This is a challenge Small ventures have to deal with every day and how they handle it leads to either death or survival of their enterprise. Just like tax Management, one can be at the top of their planning by use of accounting crm’s and/or consulting an accounting professional.
Increased number of street hawkers;

There is nothing wrong with street hawkers trying to hustle, but the fact that they offer their products at throwaway prices possess a challenge to small businesses. Hawkers are move around and only aim at making little profits and get all their products gone. If there was any policy that can be set to manage prices, then small businesses would be in a position to compete against hawkers.


Dr Adefolake Adeyeye, is a Research Fellow of the NTU-SBF Centre for African Studies

Challenges Small Businesses Face In Kenya

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Challenges Facing Small Businesses in Kenya. (2020, Sep 23). Retrieved from

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