30 WORST BUSINESSES TO START IN KENYA 2025

Thinking of starting a business in Kenya? Well, hold up for a minute.

While entrepreneurship can be rewarding, not all ventures are worth your time (or money). With changing trends, competition, and market saturation, some businesses are just not the best choices anymore. So before you dive headfirst, let me walk you through 30 worst business to start in kenya.

worst business to start in kenya

Movie Shop
Liquor Store
Tendering to the Government
Matatu Business
Clothing Boutique
Cyber Café
M-Pesa Agent
Money Lending
Charcoal Selling
Retail Shop
Taxi Business with Loans
Luxury Car Rental Business
Bodaboda Business Using Loans
Hotel Business
Video Game Café
Photography Studio
Small-Scale Poultry Farming
Barber Shop
Beauty Salon
Butchery
Schools Tendering
Car Wash
Tent and Chairs Leasing
Bookshop Business
Bottled Water Business
Gas Retailing
Petrol Station
Motorcycle Spare Parts
Dairy Farming
Bricks Selling

Let’s jump right into it.

Movie Shop

This one’s practically extinct, thanks to Netflix, YouTube, and every streaming service under the sun. People no longer walk to a shop to buy or rent movies. Avoid this one.

Wines & Spirits

Running a liquor store in Kenya is highly regulated by the government. Recently, many liquor licenses have been revoked, making it harder for new stores to operate. Additionally, a large portion of your profits could be lost to bribing police officers just to stay in business.

READ ALSO:CREATIVE SIDE HUSTLES IN KENYA

The market is also extremely saturated—it’s common to find over 30 wine and spirit shops in small shopping centers, making it tough to stand out or turn a profit.

Tendering to the Government

Sound lucrative? Well, it’s also one of the most unreliable and corrupt systems to navigate. Delayed payments and broken promises mean you could be left hanging for months—or years.

Tendering to the government or county government can be a risky affair. Imagine spending KES 2 million repairing a road or working on a water supply project, only to face delays in payment.

Most counties in Kenya are notorious for not paying contractors on time. There’s also the added risk of losing your money if a new administration comes in and doesn’t honor the contract. The financial uncertainty can make government tendering a high-risk business.

Matatu Business

The matatu business has become less profitable for several reasons. First, the market is saturated, with too many matatus competing for limited passengers. Second, buying a new matatu like a Toyota Hiace can cost over KES 4 million, which is a huge investment. Third, some drivers and conductors may not be trustworthy, leading to losses from dishonest reporting.

Additionally, a significant portion of earnings often goes to bribing police officers. You end up benefiting the driver, conductor, and police, while you bear all the frustration of a high-cost investment with low returns.

Clothing Boutique

Starting a clothing boutique faces tough challenges, especially with the rise of online shopping platforms like Jumia, Kilimall, and Alibaba. These online stores offer convenience, lower prices, and a wider selection, making it hard for physical boutiques to compete.

You may invest heavily in stocking your shop and paying rent, but customer foot traffic can be disappointingly low. The overhead costs of running a boutique add pressure, while online stores continue to dominate the market, leaving traditional clothing businesses struggling to stay afloat.

Cyber Café

Remember the last time you stepped into a cyber café? Neither do I. With smartphones and cheap internet everywhere, this business is more outdated than a dial-up connection.

M-Pesa Agent

M-Pesa kiosks are literally on every corner. The transaction fees are low, and unless you’re in an underserved area, you’ll be fighting for customers.

Money Lending

While it may seem like a good idea at first, many people default on loans. Plus, with digital lenders flooding the market, you’ll have a tough time attracting customers.

Charcoal Selling

Not only is charcoal selling a highly regulated business, but environmental concerns are making it harder to sustain. Plus, the market is shrinking fast.

Retail Shop

Setting up a retail shop sounds simple enough, but the big supermarkets and online stores are eating away at this market. Margins are low, and competition is fierce.

Taxi Business with Loans

Don’t even think about buying a car with a loan to become a taxi driver. Ride-hailing apps like Uber and Bolt already dominate, and the constant repairs, fuel costs, and loan repayments will sink your profits.Also,Cars like the Probox or Suzuki Alto are expensive to purchase. Second, the high fuel prices make operating costs steep.

Additionally, many Kenyans tend to bargain for transport fares, which doesn’t account for the rising fuel and maintenance expenses. If you hire out your car, drivers can be careless, causing damage to critical parts like the engine or gearbox. Moreover, the market is saturated with taxis everywhere, making it hard to stand out and turn a profit.

Luxury Car Rental Business.

Sure, renting out luxury cars sounds cool, but Kenya’s middle class is still growing. The demand isn’t strong enough to sustain this business, and you’ll be sitting on expensive cars that aren’t generating income.

Bodaboda Business Using Loans.

The bodaboda business is highly saturated. Taking out a loan to buy a bike is risky, especially with how competitive the industry has become. You’ll be working hard just to pay off that loan.

Hotel Business

Starting a hotel sounds glamorous, but trust me, the hospitality industry is no walk in the park.

Operating costs are sky-high, and with tourism fluctuating, it’s hard to predict consistent income.

Video Game Café

People prefer to game from the comfort of their own homes these days. With cheap gaming consoles and fast internet, no one’s rushing to video game cafes anymore.

Photography Studio

In an age of smartphones with incredible cameras, people don’t head to studios for portraits. Unless you’re a niche wedding photographer or a specialist, it’s a dying business.

Poultry Farming

Poultry farming can be profitable, but it comes with significant risks. Running a poultry farm is labor-intensive, requiring careful management and attention. Chickens are delicate creatures; a single outbreak of an infectious disease like Newcastle can wipe out your entire flock.

Additionally, the cost of chicken feeds has risen sharply, adding to the financial burden. Before diving into this business, ensure you have a thorough understanding of poultry farming practices, as the risks can outweigh the rewards if you’re not well-prepared.

Barber Shop.

Executive barber shops may not be as profitable in Kenya because most Kenyans tend to prefer affordable services. Many customers opt for barbers who charge less than KES 100 per haircut.

If you’re considering entering the barbering business, it might be more advantageous to go for a normal barber shop model instead of aiming for an executive setting. This approach may attract a larger customer base and ensure steady income.

Beauty Salon

Similar to barber shops, the beauty salon industry is flooded. It’s hard to differentiate yourself, and unless you have a loyal client base, the profits won’t justify the costs.

Butchery.

The butchery business can be quite risky for newcomers because established butchers have already dominated the market. They often have loyal customers who are willing to travel distances just to buy meat from them.

As a new entrant, you may struggle to attract customers. Additionally, many butcheries have gained a reputation for selling meats that are not legitimate, such as offering sheep meat instead of goat meat.

This has made buyers more cautious about where they purchase their meat, making it even harder for new businesses to gain trust and build a customer base.

Schools Tendering.

School tendering, whether it involves food supply, firewood supply, or book supply, can be quite risky. Many principals or school boards of management do not honor contracts, which can lead to significant financial losses.

You may deliver the supplies, but if the payment isn’t honored, you end up with no compensation for your efforts.

Additionally, there are instances where contracts for building classrooms are signed, but payments are often delayed or not made at all, leaving contractors and suppliers in a difficult financial position.

Car Wash

Yes, cars are everywhere, but so are car washes.Starting a car wash can be profitable, but it’s crucial to maintain high service standards.

Ensure your yard is mud-free, and make sure that washed cars do not step on mud after cleaning. This attention to detail can significantly impact customer satisfaction and repeat business.

Additionally, avoid starting with a huge capital investment; it’s advisable to keep your initial setup costs below KES 200,000 to minimize financial risk while you establish your business.

Tent and Chairs Leasing.

With so many people leasing tents and chairs for events, you’ll be just another face in a crowd of suppliers.

It’s a tough business to break into unless you have a unique offer or a large network.

Bookshop Business

With the rise of e-books, online bookstores, and the use of digital education tools, physical bookshops are becoming less relevant. It’s hard to maintain steady sales in this industry.

Bottled Water Business

The bottled water market in Kenya is oversaturated.Large, established brands dominate, and getting shelf space or distribution for a new product is nearly impossible without significant investment.

Gas Retailing

It might seem lucrative at first, but gas retailing requires hefty capital for equipment, licensing, and supply. Plus, established suppliers control the market, leaving little room for new entrants.

Petrol Station

Starting a petrol station can be challenging because established companies like Shell, Rubis, and Total Energies dominate the market. Many Kenyans prefer fueling their vehicles at these reputable stations due to their brand trust and quality service.

As a result, it can be difficult for a new petrol station to attract customers, making it a less profitable venture in a saturated market.

Motorcycle Spare Parts

The bodaboda industry might be booming, but selling spare parts is tough. The market is already crowded, and many established suppliers have cornered the market, leaving you with little profit.

Dairy Farming

Dairy farming can be profitable, but it comes with significant challenges. Acquiring a high-yielding cow can cost around KES 150,000, and there’s a risk of purchasing fake cows that won’t yield as expected.

The business is also labor-intensive, and dairy feeds have become very expensive in recent years. If you have large land, consider opting for zebu ranching, which may be a more manageable and cost-effective alternative.

Bricks Selling

Brick making can be a challenging business due to the high level of competition. There are many brick makers in the market, and you’ll need an expert to create a good furnace for producing quality bricks. Additionally, many customers are opting for blocks instead of traditional bricks, which reduces your market potential.You also need to consider the cost of firewood, which can be expensive.

Ready to Avoid These Pitfalls?

There you have it—30 businesses that are tough to succeed in Kenya. Sure, some might work under the right conditions, but for most aspiring entrepreneurs, these ventures are best avoided.

Think twice, do your research, and most importantly, pick a business that isn’t already struggling to stay afloat!