How to Start an Online Business in Kenya 2023
Are you thinking of starting an online business and want to know how you can make it happen? Let us go through what is required and a step-by-step guide on how to start and run an online business in Kenya.
In the fast-paced digital age of 2023, starting an online business in Kenya has become more accessible and lucrative than ever before. An online business allows entrepreneurs to reach a vast audience, engage with customers, and operate with greater flexibility. In this article, we will explore what an online business is, the requirements for setting up an online venture in Kenya, and provide a comprehensive step-by-step guide to help aspiring entrepreneurs kickstart their online journey.
What is Online Business?
An online business is a venture that primarily operates over the Internet, utilizing various digital platforms to sell products or services. Unlike traditional brick-and-mortar businesses, online enterprises can reach customers globally, breaking geographical barriers. Common types of online businesses include e-commerce stores, digital products and services, content creation platforms, online consulting, and freelancing services.
Online business requirements
1. Business name
You need a name for your business. Having a distinctive name for your business holds significant importance..
2. Capital
You need start-up capital for your online business. As much as it’s an online business, there are costs involved. You will buy computers, pay for the internet, buy a domain, pay for supplies, and other expenses.
3. Business Permit
In Kenya, all businesses need to be registered whether online or offline business.
4. Website/ social media handles
To have a successful online business you need a website to display your products or services and their prices. You also need social media platforms to help in marketing and accessibility of your products/ services.
5. Delivery/shipping plan
Most online businesses have a delivery plan, where when a client buys a product they are able to deliver it or make it easy for the client to pick it up.
Step-by-Step Guide to Starting an Online Business
Step 1: Business Idea/decide on what you are going to sell.
Do you have a business idea? Do you know what you want to sell online? Before diving into online business you should first identify the type of business you want to start. Start by identifying a promising business concept that harmonizes with your unique skills, passions, and the existing market demand.
Step 2. Market Research
You need to conduct thorough market research to understand your target audience, competitors, and potential growth opportunities. Don’t assume things like, there’s already an existing market for what you want to sell or, that there is space for another player in the market. Do the research first. In your research you need to tackle questions like:
- Is there an existing market for your product/service?
- How is the competition?
- Is the demand for the product/service increasing or decreasing over time?
- What are the risks related to the business you want to start?
- Is it profitable?
Step 3. Create a Business Plan
After identifying the business you want and conducting research, now you need to develop a detailed business plan. The plan should be outlining your business goals, target audience, marketing strategies, revenue streams, and financial projections. Having a well-structured business plan in place is like having a detailed roadmap to guide your online venture. It provides a clear and strategic direction, helping you navigate through the complexities and uncertainties of the digital landscape.
Step 4: Calculate costs/Capital
As much as other businesses need capital to start, even online businesses also have expenses. Some expenses for online businesses include licensing and permits, branding, and website design and hosting. Even a service business, such as freelance writing, has initial costs such as internet and computer equipment.
Step 5: Choose a business name
Please select a suitable name for your business. This mostly depends on the type of business, target market, and the product/service offered. It’s necessary to make it unique. It’s the same name you’ll use to refer to yourself on social media and on your website, which will serve as the main home for the business you run.
Step 5: Legal Registration
Once you are done with the 4 steps above, now register the online business as a legal entity with the relevant Kenyan authorities. To register your business online visit the eCitizen portal. Remember that registering an online business is the same as registering a normal offline business. Choose a suitable business structure, such as a sole proprietorship, partnership, or limited company, and obtain the necessary licenses and permits.
Step 6. Develop Your Online Platform
Build a user-friendly and visually appealing website that showcases your products or services effectively. Include essential features such as product catalogs, shopping carts, and contact forms for customer inquiries. This also entails branding your business. While building a website for your business you need to create a unique symbol like a unique logo, color scheme, and even typography.
Step 7: Create Social media platforms
In this step, you need to open business accounts on social media platforms that you will be posting or will be marketing your business. You must also keep your branding strategy constant across your website and social media platforms. For example, your social media cover photo should be consistent with other graphics on your website.
Step 8: Secure Payment Gateway
Set up a secure and reliable online payment gateway to facilitate smooth transactions with your customers. Popular payment gateways in Kenya include M-Pesa, PayPal, and credit/debit cards.
Step 9: Content and Marketing Strategy
Develop a compelling content strategy to attract and engage your target audience. Utilize social media, email marketing, and search engine optimization (SEO) to promote your business effectively. There are different social media platforms to market your business in like TikTok, Facebook, Instagram, and Twitter.
Step 10: Launch your business and service your first ten customers.
Consider your first customer to be the official start of your business. You will not be celebrating the start of your firm until you have enough sales to cover your costs. Consider a sales campaign to get your business off to a good start. A press release and several social media posts announcing the launch also help the company get some early traction.
Step 11: Goods Delivery/ Shipping
You must ensure that clients receive their purchases in a timely and seamless manner. As a result, you must organize your delivery method. There exist numerous approaches to accomplish this objective, some of which encompass:
- Collaboration with a delivery firm
- Bringing the goods yourself
- Having an actual pick-up location
The appropriate method will be determined by the needs of the consumer. If you lack the resources to distribute yourself, you can collaborate with third-party delivery partners. Nevertheless, this comes with an extra expense.
In 2023, the online business landscape in Kenya offers vast opportunities for aspiring entrepreneurs. By understanding what online business entails, fulfilling the necessary requirements, and following a well-defined step-by-step guide, you can launch a successful online venture. Embrace the power of digital technology, reach a global audience, and make your mark in the exciting world of online entrepreneurship in Kenya.
Frequently asked questions
1. Do You Have to Register an Online Business in Kenya?
In Kenya, all enterprises must properly register. While many online business owners prefer not to register in order to avoid paying taxes, this is illegal. Aside from compliance concerns, registering your firm will assist you in raising cash from banks when necessary.
2. Are online businesses taxed in Kenya?
Unless you are selling a tax-exempt product, your online business, like every other company, must pay taxes. Tax avoidance is a felony in Kenya, as it is in many other nations, therefore you will protect your investment by paying what is owed to the taxman.
3. Do I need a business license to sell online in Kenya?
You are not exempt from registering your business just because you do not have a physical location. You must register your firm in order to generate revenue. A registered business shows customers that your company’s operations are legitimate.
