Business Ideas in Kenya You Can Start With Little Capital

KES 8,000 was sitting in Mwangi's savings when he lost his job at a hardware shop in Nakuru, and everyone had advice on what he should do with it. A cousin said boda boda. A neighbour said a kibanda selling chips. Mwangi wanted something he could start that month without spending every shilling, because that KES 8,000 was also his family's cushion.

Good business ideas in Kenya with little capital share three things, because you can start small, you can test before you commit, and money comes back quickly. The lists below are grouped by what it costs to open the door, so you can start from your real budget. Mwangi's own choice, and the sums behind it, come after the lists. If you want the bigger picture of what comes after the first sales, read our guide on how to grow a small business in Kenya.

How to judge an idea before you spend

A cheap idea is not automatically a good one. A KES 3,000 business that nobody near you needs will lose all KES 3,000. The cost of opening the door matters far less than whether anyone walks through it. Before you buy anything, look at your own street and answer honestly:

• Is there a buyer within walking distance? Count the people who pass your spot between 6 and 9 in the morning and 5 and 8 in the evening.
• What does the stock do if it does not sell? Soap waits patiently. Bread and milk do not.
• How many days until money comes back? A product bought on Monday and sold by Friday lets you turn your money fast.
• What do you already know? A skill you have, from braiding to fixing phones, is capital you do not have to buy.

Ideas you can start for under KES 5,000

These need little more than a first batch of stock and somewhere to sell. Most of them can be tested with a single week's stock or less. If the first batch does not sell, you have lost little and learned a lot. The list starts with the idea Mwangi chose in the end:

• Liquid soap refills. Make or buy in bulk and sell by the litre to households who bring their own containers. The worked example below shows the sums.
• Cereals and pulses in small packs. Buy beans, green grams or rice by the sack and pack into quarter and half kilo bags for neighbours who cannot buy in bulk.
• Phone accessories on a tray. Chargers, earphones, screen protectors and covers sell steadily near stages and colleges. Buy from a wholesaler you trust, because poor chargers bring angry customers back.
• Car and motorbike washing. Buckets, a hosepipe, soap and cloths near a busy road or a boda stage.
• Small scale vegetable selling. A table, a few basins and a day's stock. Fresh produce moves fast but spoils, so start smaller than you think.

Ideas for KES 5,000 to KES 15,000

With a little more, you can add equipment that lets you charge more per sale. A blender or a sewing machine turns cheap raw materials into something worth more than its parts. The equipment also lasts, so its cost is spread over months of sales. The catch is that more of your budget is tied up before the first customer arrives:

• Fresh juice from a blender. A blender, a cool box and fruit from the market. Sell at offices, gyms or school gates.
• Second hand shoes. A small bundle of mitumba shoes, cleaned and sorted. Shoes hold their value better than many clothes.
• Cosmetics shelf. Lotions, hair food, combs and sanitary pads near a hostel or estate. These are bought again every few weeks.
• Tailoring repairs. A second hand manual machine can pay for itself through hems, zips and school uniform repairs alone.

Juice and anything cooked carry an extra step. Counties inspect food sellers, and food handlers are often asked for a medical certificate. Visit your county public health office before your first sale rather than after an inspector visits you. Building that visit into your plan also shows you the true cost of opening, because any certificate or licence comes before the first glass of juice.

Ideas that run on a skill more than stock

Some of the best low capital businesses sell time and skill rather than goods. The capital is your training, a few tools and a way for people to find you. Because there is little stock, there is little to spoil, break or go out of season. Here are four that work well from home or by appointment:

• Hair braiding and plaiting at home or by appointment.
• Phone and laptop repair for people who learned the trade.
• Typing, printing and CV writing if you have access to a computer and printer.
• Home cleaning and laundry for busy households in your estate.

The limit of a skill business is your hours. You can only braid so many heads in a day, so plan early how you will grow. Some owners raise prices as their name spreads, some add a product to sell alongside, and some train a helper. Whichever route you choose, decide it before the diary is full, because a fully booked owner has no spare hours left to plan.

A worked example: Mwangi's liquid soap in Nakuru

Mwangi chose liquid soap refills. He had learned the basics from a friend who trained at a youth polytechnic, households in his estate buy soap every week, and soap does not spoil. Every question from the start of this guide had a good answer. He started with this list:

That left KES 5,300 of his KES 8,000 untouched. He kept it as his family's cushion and his reserve for a bad week. Spending only about a third of his savings meant a failed first month would not have emptied the household. It also meant he could afford to learn slowly, without every slow day feeling like a disaster.

Each 20 litre batch costs KES 1,000 in ingredients, plus KES 100 in fare to buy them in town. He sells at KES 80 a litre, so a batch brings in KES 1,600. His cost works out to KES 55 a litre and his profit is KES 500 a batch. Over a week and a month, those batches add up like this:

KES 6,000 a month is not a salary yet. But it came from KES 2,700, it covers part of the household's food, and every month he learns which estates buy most. In other words, his first month's profit was more than twice what he spent to start. That is the kind of result that makes an idea worth growing slowly and carefully.

Safety and standards are part of the business too. Soap ingredients such as sulphonic acid and caustic soda can burn skin and eyes, so he wears gloves and goggles, labels every container and keeps the buckets locked away from children. That is why the gloves and goggles sit on his startup list right next to the ingredients. Before selling beyond his own estate, he plans to ask the Kenya Bureau of Standards what a small soap maker needs.

Mwangi's next step will come from profit, not from his cushion. He now saves part of each week's profit toward a second product, a dishwashing paste, rather than spending his reserve. The KES 5,300 stays where it was, ready for a bad week. A second product sold to the same households lets the customers he already has spend a little more with him.

Test before you spend everything

The biggest mistake with a small budget is spending it all on day one. A test costs less than a failure. Mwangi's first batch was a test in itself, because 20 litres would show within days whether his estate wanted refills. These four habits turn almost any idea into a cheap test:

1. Sell to ten people first. Before buying a full sack or a full bale, sell a small amount to neighbours and colleagues. Ask what they would pay and whether they would buy again.
2. Buy second hand where you can. A used blender or machine that works is better than a new one that empties your savings.
3. Keep a reserve. Like Mwangi, hold back at least a third of your capital until you have sold consistently for a month.
4. Write down every sale and cost. By the end of the first month you will know your true profit, not the profit you hoped for.

Saving for your first stock

If you do not yet have even KES 3,000, the first business is saving it. Small amounts saved daily from fare change or a side job add up faster than people expect. A goal with a date stops the money leaking into other needs. Mwangi's KES 8,000 was money saved before he needed it, and that is what let him start without panic.

On Nyanyuka you can save any amount from KES 10 by M-Pesa into a locked savings goal, and the money stays there until the date you chose. You can also save in a chama with friends who want to start businesses too, so you keep each other going. You join with KES 1,500. You can register on the web, in the Android app or by USSD from any phone.