Virtual Business Incubator: Support to entrepreneurs by www.kuct.ac.ke

The goal of this article is to provide support to those from the Nyeri district who are interested in starting their own business. Small-scale business is an important part of the Kenyan economy and “has been estimated to account for more than 20% of adult employment and for 12-14% of national GDP” (Dupas and Robinson 2010). The unemployment rate in the Nyeri district remains around 70% and self-employment provides one of the few ways to enter the workforce. A business incubator can take many forms, whether providing capital and office space for the development of a new product to the mentorship of entrepreneurs and their existing businesses. This business incubator has been imagined as a virtual one because it provides a way for the community to easily access the resources that reside within Kimathi University College of Technology. This virtual business incubator will expand beyond the current information presented here.

This business incubator is intended for those who wish to begin a business or those already operating a business and wish to add value to their current product or service. Beyond your business idea, you will need to consider a variety of factors during the planning stages to reach your goal of starting a business. This document is concerned with the first stages of a business incubator and specifically with addressing three objectives:

i)                    how to incorporate a company;

ii)                   the development of a good business plan;

iii)                 and a product or service ready to be offered to the market.

To address the first objective, the government of Kenya has developed a website called the Kenyan Business Licensing e-Registry (http://www.businesslicense.go.ke). On the website, one can conduct a name search, submit forms and read about the different regulations concerning the registration of a company. One does not need to complete this step first, but it helps to read what will be required in the future once one has completed the development of a good business plan.

Business Plan

The key factor (beyond having a good business idea) is the development of your business plan. Business plans vary by the type of project, but most contain:

i)                    an executive summary;

ii)                   a strategic business vision;

iii)                 a company description;

iv)                 products and services;

v)                  a market analysis;

vi)                 and a marketing and financial plan.

nurturing SME's

Developing a business plan is useful because it provides an opportunity to: “identify risks and propose plans to minimize/avoid them; identify strong/weak points related to the competition; get to know the market, define products/services and marketing strategies; analyze business financial performance; and assess investments and estimate return on capital invested” (InfoDev Incubator Support Center 2010).

If you need to obtain a loan from a bank or microfinance institution, creating a business plan helps you prepare and provides you with good answers to the questions that will be put to you by those evaluating your application for money.

There are many sources online where one can find guides to write a business plan. Two banks which provide good guides to writing a business plan are: Barclays (http://www.barclays.co.uk/StartUpSupport/Yoursmallbusinessplan/P1242559649359), and RBC (http://www.rbcroyalbank.com/RBC:TIepXKwWZAwAYZByx4Y/sme/bigidea/kamiko.htmkl), These two websites provide examples of business plans for larger companies, but it is still useful to do a bit of research even if one is only interested in purchasing a boda boda to start a business. There are also a number of websites that provide databases of business plans so that one is able to find a plan that is close to your business idea. BizPlanit.com (http://www.bizplanit.com/resources/virtual-business-plan-template.html) is one and a number of sources are available by just looking on a search engine.

 Marketing Plan

“[S]elling is getting rid of what you have got and marketing is getting what you can get rid of” (Giddings 2008).

The marketing plan is intended to identify the target market(s) (those who will buy your product or service) and describe how the main components of the strategy can be positioned to work towards the desired outcome. The main components of a marketing plan are often described as the 7 P’s: Product; Price; Promotion; Place; People; Processes; and Physical evidence. Once you have completed the main components of your marketing strategy you need to complete the action plan where you convert the marketing strategy into solid activities where timing and individuals are assigned to the activities (Giddings 2010). A helpful website, with a guide to develop a marketing plan, is here (http://www.omafra.gov.on.ca/english/busdev/facts/10-029.htm). The website provides some useful questions to help understand how you can best market your product or service.

Case Studies

Case studies can provide a basic understanding of the initial challenges of starting a business and how people have overcome these challenges to succeed and grow their business. The InfoDev Support Center provides examples of successful case studies around Africa. The case studies describe the company and the entrepreneur running the organization. Here are two case examples from the InfoDev Support Center website: A Women’s Sewing and Dyeing Enterprise at NCNW Senegal (http://www.idisc.net/en/Article.38663.html) and Catering Business Incubated at INEFOP in Angola (http://www.idisc.net/en/Article.38664.html).

Financial Resources

Microfinance Loans

Microfinance loans are designed for people who do not have access to conventional capital. Normally, the loans provided are small and are for a short period (ranging from six months to a year). Once the loan is repaid, the money is typically recycled into other loans, providing more opportunities to those seeking employment. Unlike loans from a large commercial bank, no collateral is required for a micro-loan. Often a loan is provided once a person joins a lending group where other members of the local community evaluate the loan and ensure that it is repaid. Those who can benefit the most from these types of loans are those who do not have anything to offer as collateral. Microfinance loans provide an opportunity to entrepreneurs who wish to start a business or expand an existing one. The micro-loan is also beneficial because it does not normally target a single type of business, but is rather available for a variety of business ideas. Microfinance lending institutions also often provide advice and mentorship to those selected for loans. Below is a list of microfinance institutions offering loans to people in Nyeri.

Microfinace Institutions of Kenya
Institution	Website	Location	Contact
Business Initiatives and Management Assistance Services	http://www.bimaskenya.com/	Nyeri	068-31645
Equity Bank	http://www.equitybank.co.ke/	Nyeri	061-2034876
Faulu	http://www.faulukenya.com/	Nyeri	061-2030181
Jamii Bora	http://www.jamiibora.org/	Nyeri	020-2055219
K-Rep Bank	http://www.k-repbank.com	Nyeri	061-2034509
Kadet	http://www.kadet.co.ke	Nairobi	20-2731954/87
Kenya Women Finance Trust (KWFT)	http://www.kwft.org	Nyeri	061-2757
Riverbank Savings & Credit SACCO	http://www.riverbankcredit.com	Nairobi	020-2215042
Juhudi Kilimo	http://www.juhudikilimo.com	Nairobi	20-3906000

References

Dupas and Robinson “Savings Constraints and Microenterprise Development: Evidence from a Field Experiment in Kenya” 10 June 2010.

Guidings, Steven “Marketing for Dynamic Incubators” 2008.

InfoDev Incubator Support Center http://www.idisc.net.