Are you puzzled about which businesses to start with 500K in Kenya? It’s no mirage; several business ideas can fit your capital bracket! Research shows that most micro-businesses start with at least $2,000.
If 500k is all you have, you are set to start a small business. All you need is a great business idea and proper budgeting. And before you ask, yes! The 500K will be enough to pay for a rental space, buy stock, hire staff and set aside some money for miscellaneous expenses.
In my experience as a business writer, I’ve seen several entrepreneurs start and scale a business they launched with just 500k. Some start with even a lesser budget! Still, some businesses start with a larger budget and fail.
So what differentiates the successful from the failures? Is it luck? Do they need any training or knowledge?
This article gives you five business ideas, how to get started and implement them, and a guide on appropriately budgeting the money.
What are the businesses to Start with 500k in Kenya?
The best businesses to start with 500k include:
- Grain Milling
- Staff or School Uniform Manufacturing
- Parcel Delivery Business
- Bakery and Pastry
- Executive Barber Shop
Below we break down each business, giving an overview of where to invest the capital.
#No. 1: Grain Milling
Grain milling is one of the businesses to start with 500k in Kenya. Milling is transforming grains into flour for food processing. Some popular grains you can mill flour from include maize, wheat, barley, millet, etc.
The best place to set up this business is a residential area with high traffic. Low to middle-income households prefer milling their flour, so consider this when choosing a location.
Your target customers will be under three categories; those coming with their grains, some who want to buy grains and mill them, and in some cases, those who want to buy ready flour. Diversify your portfolio as much as possible to increase the profit margins better.
It is a good business since you can start small and scale it up. You can start with a single milling machine, a few bags of grain, a weighing scale, and a sizable rental space. As your business grows, you can start packaging and branding your flour.
- Milling machine Ksh 200,000
- Grains (maize, wheat, millet, etc.) Ksh 100,000
- Rental premises Ksh 75,000
- Weighing scale 25,000
- Staff 40,000
- Miscellaneous (power, milling supplies) Ksh 60,000
#No. 2: Staff or School Uniform Manufacturing
Manufacturing school and staff uniforms are among the best businesses to start with 500k in Kenya. The manufacturing business involves stitching uniforms on behalf of businesses and schools.
With such a budget, it’s a good start for you because most companies appreciate branding, and there’s unending demand for school uniforms. But before you start, you need to come to a contractual agreement with the school or pitch to businesses.
Like any business person, you must be good at marketing and networking. Using your skills, visit different schools and businesses and request to stitch uniforms on their behalf.
In the initial stages, you can hire individuals with sewing experience to do the job manually and pay them depending on the number of pieces they stitch. But as time progresses, buy sewing machines to increase productivity and sales.
- Premises Ksh 30,000
- Sewing machines (2)@ 120,000 – Ksh 240,000
- Sewing supplies Ksh 50,000
- Staff Ksh 100,000
- Miscellaneous 70,000
#No. 3: Parcel Delivery Business
Another awesome business to start with 500k in Kenya is a parcel delivery business. It involves delivering parcels on behalf of clients or businesses. A parcel delivery business targets restaurants, wholesalers, online vendors, etc.
Most delivery businesses in Kenya use bicycles, motorbikes, or Tuk Tuks but later scale to delivery vans or vehicles.
Your target customer for your parcel delivery services are businesses with delivery traffic. They have enormous sales and need someone to pick up or drop off deliveries to their clients.
But your customers shouldn’t be limited to businesses alone; Individual households might also need someone to pick up and drop off items on their behalf.
You can launch your business by advertising on social media, starting a video marketing campaign, pitching to businesses, etc. Remember to increase your pitching intensity first to get the ball rolling fast.
- Motorbikes (2) @ Ksh 130,000 – 260,000
- Staff Ksh 100,000
- Premises (small office) Ksh 10,000
- Miscellaneous Ksh 130,000 (insurance for customer goods and power bills
#No. 4: Bakery and Pastry
If you haven’t considered monetising your bakery and pastry skills, it’s one of the best businesses to start with 500k in Kenya. The business involves selling bread, scones, and cakes and is one of the great ideas to pursue to start today.
You need to identify how you’ll reach your customer to get started. It can be a walk-in shop, an online order platform, or a blend.
If you focus solely on a walk-in shop, you must have a strategic location with high traffic. A place where your customers can come from the residential areas or pass through your shop.
Brand your shop whether you focus on an online shop or a physical one. You need it to stand out from your competition and, better still, attract potential customers.
When starting your bakery shop, you can be the sole baker. Build a brand around your skill, and as the business grows, scale and hire one or two people to help with the processes.
- Oven Ksh 150,000
- Mixers Ksh 50,000
- Baking supplies Ksh 50,000
- Staff 50,000
- Bakery fittings 50,000
- Premises Ksh 50,000
- Miscellaneous Ksh 100,000
#No. 5: Executive Barber Shop
An executive barber shop is one of the most lucrative businesses in Kenya. It is one of the best businesses to start with 500k in Kenya, and depending on the price, you may save up on the capital.
Unlike normal barber shops, executive barber shops aim to offer more than just shaving. They offer other experiences such as massage, scrubbing, manicures, pedicures, etc.
To start an executive barber shop, choose a middle to upper-class location where your target customers will pay at least Ksh.500 for a haircut. Your target customers should have some disposable income.
Note: Ensure you have the right skills as a barber and have worked in the industry before. You don’t want to start your business with a bad reputation. If you don’t have the skills, hire a professional and pay per customer until your business stabilises.
- Shaving machines (3) 50,000
- Grooming supplies Ksh 50,000
- Furniture, decor, and fittings 200,000
- Rent 100,000
- Staff 60,000
- Miscellaneous 40,000
Let’s face it; deciding which business to start with your 500k can be confusing. Worse, the fear of starting up with the wrong step can be restraining. The above five ideas are a good starting point.
Choose the best business idea that aligns with your skillset. These are the best businesses to start with 500k in Kenya, and you can easily scale these ideas to companies. Check our guide to learn more if you’d love to explore unique business ideas.
Better still, if you choose a more personalised idea, ensure it’s not on our list of the worst business ideas in Kenya.
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