top of page
  • Writer's pictureWylde International


Small and medium Enterprises (SMEs) play a crucial role in the development of Kenya’s economy. They are the engines for a country’s economic growth. A recent National Economic Survey report by the Central Bank of Kenya (CBK) indicated that SMEs constitute 98% of all businesses in Kenya, creating 30% of the jobs annually as well as contributing 3% of Kenya's GDP.


Startups and SMEs in Kenya are making significant contributions in various sectors, including technology, agriculture, finance, health, and education and are transforming the business landscape in the country.


On the other hand, the government has been at the forefront in supporting SME start-ups through the enactment of laws and regulations, creating a favourable business environment that favours SMEs and access to skilled labour that has created a conducive ecosystem for entrepreneurship to thrive. Moreover, according to the Global Entrepreneurship Index 2019, Kenya was ranked 68th out of 137 countries, reflecting its strong entrepreneurial ecosystem.


Challenges facing startups and SMEs and ways of solving them.

Despite the contributions and the roles that SMEs play in Kenya, they have faced numerous challenges that have become a hindrance to their growth. We shall look at their challenges and ways how we can mitigate them.


Inadequate training and management - Many SMEs and start-ups in Kenya don’t have enough training and management practices to run their businesses. They lack knowledge of the importance of operations and processes and the role that each plays in the business.


Business owners need to have the correct knowledge that will help them deal with the external output by creating a conducive working environment for retaining their top talents who contribute their skills to bring more returns to the company.


Wrong business model - A business model is a company's core strategy for profitably doing business. They determine the impact of the business in the market.

Many start-ups fail because they have the wrong business model. Business owners should ensure that the business model aligns with the company’s overall strategy. One of the things that start-ups need to check is selecting a business model that is not too complex and that’s sustainable.


The business model should be sustainable and scalable to ensure that the business has a chance to succeed.


Access to the Market - is a crucial aspect for startups. It influences their growth, sustainability and success. Many businesses have utilised the digital space as a safe spot for marketing their products. While digital marketing serves as a great tool for reaching a wider audience, many startups face challenges in determining their target audience clearly and precisely. Without knowing your ideal customers, their needs and how they make decisions, you will waste time and money on marketing campaigns that don't resonate with them.


To avoid this mistake, they should conduct proper market research, create buyer personas, and segment their audience based on relevant criteria.


Standing Out from Competition - The only way to stand out from the competition is by establishing a cutting-edge business while being relatable and within reach in terms of access and prices.


Knowledge of your competitors and understanding your unique value proposition is crucial if you want to outgrow the competition. Understanding customers' needs and adapting to them makes you stay ahead of the competition.


Changing Laws and Legislation - Many startups fail because they are unable to keep up with the changing laws and legislation. To solve this challenge, they need to keep updated on the new laws that affect their industries. They also need to have a legal representative who will ensure they are updated and who will work with them in customising their products to suit the legal requirements



Startups and SMEs have the potential to boost national productivity and transform the economy. However, the challenges addressed above if not hindered will stifle the growth of businesses and companies which will affect the country’s economy.


By Ian Makale - Business Analyst, WYLDE International

120 views0 comments


bottom of page