Reach for the Stars:
We started this year with a renewed sense of determination! Our first session with our Muchatha participants was a fantastic kickoff, full of energy. It was an inspiring opportunity to come together, learn, and reflect on the essential aspects of business planning
Why a Solid Plan is Your Safety Net
When starting a business, the excitement can easily overshadow the necessity of thoroughly considering potential risks. Unfortunately, many entrepreneurs realize too late that anticipating risks is just as important as having a great product or service. This is something we discussed in our recent session with our Muchatha participants—many of whom shared stories about risks they hadn’t factored into their business planning, which led to setbacks and, in some cases, the closure of their businesses.
With some of our participants planning to start their business this year while others have a goal to grow their micro, small, and medium enterprises, this session was very timely. It’s easy to fall into the trap of thinking everything will go smoothly, but business is inherently unpredictable. Having a structured business plan that includes risk management strategies and proper business documentation is essential for navigating those inevitable bumps in the road.
Mungai’s Khat Business: A Lesson in Credit Risk
Take Mungai, for instance. He shared the story of his khat business, where he learned a painful lesson about the risks of offering credit without a proper follow-up system. “My buddies used to come and get miraa, promising they would pay me the following week. But when the time came to settle their bills, they refused to pay. I found myself running the business at a loss—something I hadn’t planned for,” Mungai explained.
The risk of Mungai offering goods on credit without proper verification or follow-up was not anticipated in his original business plan which resulted in the closure of this business. He got to understand that one of the key aspects of a solid business plan is factoring in the risk of unpaid debts and incorporating strategies for debt recovery. This could include setting clear payment terms, offering discounts for upfront payments, or even using formal contracts to reduce the chances of customers defaulting on payments.
Jacinta’s Tomato Trouble: The Importance of Research and Forecasting
Then there’s Jacinta, who owned a grocery store. She learned the hard way about the importance of proper market research and inventory management. “I ordered a large quantity of tomatoes because I saw other grocers doing the same, but without assessing the demand in my market. I ended up with a stockpile of rotten tomatoes, which resulted in a significant loss for my business,’ she shared
Jacinta’s experience highlights a common risk faced by many small businesses: overstocking without understanding demand. This risk can easily be avoided through better market research, forecasting, and a more flexible inventory system. We emphasized that a good business plan will not only help them understand their market’s needs but also prepare them for seasonal fluctuations, supply chain delays, and the unpredictability of customer behavior.
Proactive Risk Management: The Key to Longevity
Mungai and Jacinta’s stories illustrate how the unexpected can derail even the best-laid plans. Every business, regardless of size or industry, can face challenges—whether it’s market shifts, financial setbacks, or operational hiccups. However, having a well-structured business plan can help one navigate challenges more effectively and keep the business afloat during difficult times.
Join us as a business expert mentor and help these driven individuals navigate the risks and triumphs of building their businesses. Your insights and support could make all the difference in their journey to success.
