More Businesses are Failing, and This is Why.

Entrepreneurship is not what it used to be 10yrs ago, therefore its is clear why dreams are constantly colliding with reality, often with unpredictable outcomes. Despite the attraction of success, the harsh reality still remains: more businesses are failing than ever before, and its even worse in Kenya. Behind this unsettling trend lie a number of challenges, each contributing to the staggering statistics that haunt aspiring entrepreneurs and policymakers alike.

Consider the stark numbers: every year witnesses the birth of over 4.7 million new businesses globally. Yet, within the first year, 20% falter, followed by another 30% in the second year. By the time the 9th and 10th years roll around, a staggering 70% have met their demise. In Kenya, over 10,000 new businesses are started every single year, but within the first 3-6 months 30% of them have met their demise and 80% of them by the end of the 1st year. For the remaining 20%, only 10% actually live to realize real growth and success, leaving the other 10% wallowing in mediocrity and continuous additional investment from the entrepreneur in order to save them from failing. These statistics serve as a sobering reminder of the formidable hurdles that entrepreneurs face.

Delving deeper into the abyss of failure, it becomes apparent that various factors contribute to this disheartening reality. Unrealistic expectations, fueled by the allure of overnight success and good life that comes with being an entrepreneurs, often lead to disappointment when confronted with the harsh realities of business. Inadequate market research further worsens the issue, leaving entrepreneurs blindsided by unforeseen challenges.

Moreover, the absence of accessible mentors and coaches deprives entrepreneurs of valuable guidance and support, exacerbating their struggles. Economic instability, coupled with inflationary pressures, creates a volatile environment fraught with uncertainty. Financial illiteracy only serves to amplify these challenges, leaving entrepreneurs ill-equipped to navigate the complexities of managing finances.

This is my message to the ambitious souls venturing into the entrepreneurial arena, armed with dreams and determination, it is important that you heed this advice: temper your aspirations with realism. Avoid starting a business then looking a vision but instead get a vision then craft a business around it. Be more of a problem solver of other peoples problem rather than of your own. Do not start any business when you don`t have a clear and unique solution that you are providing to a particular problem Conduct thorough and continuous market research to gain invaluable insights into consumer needs and market trends. Seek out mentors and coaches who can offer guidance and support, drawing from their wealth of experience.

Prioritize financial literacy, for it is the bedrock upon which successful businesses are built. Understand the intricacies of budgeting, cash flow management, and investment strategies. Account for every penny spent or earned. Separate your personal finances from your business finances. Embrace the volatile nature of the market, viewing challenges as opportunities for growth and innovation. With resilience and adaptability as your allies, navigate the turbulent waters of entrepreneurship with confidence and conviction.

To the policymakers entrusted with shaping the economic landscape, I do beg of you to heed the clarion call: entrepreneurship is the lifeblood of economic growth and innovation. The alarming rate of business failures demands urgent attention and concerted action. Invest in initiatives that promote entrepreneurial education and mentorship, equipping aspiring entrepreneurs with the tools they need to succeed.

Create an enabling environment for businesses to thrive, characterized by stability, access to capital, and regulatory frameworks that foster innovation. Address the root causes of economic instability and inflation, laying the foundation for sustainable growth. Empower individuals with the knowledge and skills needed to navigate the complexities of the modern business landscape.

In entrepreneurship, success is never guaranteed, but its not impossible, and failure is an ever-present reality. Yet, armed with knowledge, resilience, and a willingness to adapt, you can defy the odds and chart a course towards success. Together, let us confront the realities of failure and forge a path towards a brighter tomorrow.