How entrepreneurs identify great business ideas

It is not rocket science to hit it out in business; rather it’s a couple of small little things that tip the balance in favor of that one individual, it all boils down to one thing –be the first in the market

Let’s start with being first in the market. Being the first nets an untapped market. This will make you an automatic market leader when competition arrives. Turn your creative ideas into business.

Innovate. Think about products that are not out there and try to make it commercially available. Coming first makes you an original, which consumers look forward to, aside from the price.

Establish defensible ground: being first gives the business what we call “defensible ground “in military terms, it captures market share much more easily without having to worry about rivals.

Build brand loyalty: When competitors come along — as they inevitably will — the first-mover will have advantages in the ensuing rivalry such as brand loyalty.

By beating rivals into the market, the first-mover can consolidate its position and compete more effectively, not only defending its previously acquired share but even continuing to expand.

Take advantage of hard economic times: When written in Chinese, the word “crisis” is composed of two characters. One stands for danger and the other opportunity.

A sit shall be told by many billionaires, they made their biggest fortunes in troubled economic times. The reality is that there are many business ideas than ever for the average Tom, Dick and Harry who is willing to open his mind to numerous opportunities for wealth creation.

Your Key to Finacial Freedom...

Why does financial independence remain a dream for most of us? Is it due to procrastination? Do we feel investing is risky, complicated, time consuming and only for the rich?
The fact is there is nothing complicated about financial planning.   It is important to plan and invest for your future because the future is bound to be expensive. Inflation is on the rise and because people are living longer, retirement costs are often higher than many expect.
Here are eight basic steps to get you started on the path of financial security.

• Organize your finances
  Ensure you have an adequate emergency fund, sufficient health, car, life insurance coverage, and a realistic budget. An adequate emergency fund consists of three to six months worth of your living expenses.
• Get in the habit of saving
  Try saving at least 10 per cent of your salary every month. Savings are kept in banks accounts and with savings, your principal typically remains constant and earns interest or dividends.
• Get professional help

Working with a professional is the single most important investment that they can make. Do not underestimate the value a professional (e.g. financial planner, stockbroker, commercial lawyer or real estate advisor) can offer in helping you define your goals, determine the type of risk that is right for you, and create a comprehensive investment plan.

• Invest where your money can grow at a meaningful rate
  Ensure you understand and can live with the risk. Your tolerance for risk is affected by several factors, including your objectives and goals, timeline(s) for using this money, life stage, personality, knowledge, other financial resources, and investment experience. Choose a mix of investments that has the potential to provide the highest possible return at the level of risk you feel comfortable with.
• Do not put all your eggs in one basket
  Divide your investment funds among asset classes that respond to different market forces in different ways at different times. This will help you minimize the effects of market volatility and maximize your chances of return in the long term. In a nutshell, multiple types of investments will reduce the impact of a loss on any single investment.
• Understand the impact of time
  There is no denying that financial markets can be volatile. Endure short-term price fluctuations and focus on long-term potential. Though past performance does not guarantee future results, money left in an investment offers the potential of significant return over time.
• Take the liquidity of your investment into account
  As a rule, the sooner you will need your money, the wiser it is to keep it in an accessible savings account or in investments with comparatively less volatile price movements such as short-term bonds or a money market fund. Conversely, think long-term for goals that are many years away. With time on your side, you do not have to go for investment “home runs” in order to be successful.
• Invest consistently and often
  Accumulate shares of stock or purchasing units in a unit trust fund at regular intervals over an extended time. Keep in mind that when the price is high, your investment buys less, when prices are low, you will often buy more shares/units.
  The long-term success of your portfolio will depend on periodically reviewing it. Even if nothing bad happens, your various investments will likely appreciate at different rates and your circumstances change over time – your asset allocation will need to reflect those changes. For example, as you get closer to retirement, you may increase your allocation to less volatile investments, or those that can provide a steady stream of income.

Adopted from NIC BANK website

Invest:Highlights on Property In 2013

What is in store for Kenya’s real estate market in 2013, a year that has been described by many as a “make-or-break” for the country?

With what is expected to be a watershed General Election barely two months away, many Kenyans are keeping their fingers crossed while hoping for the best.

Some analysts have already pointed out that the election-related uncertainty might slightly slow down the property sector in the first quarter of the year — just like might happen to other sectors — as investors “hold off” and instead adopt a wait-and-see attitude.

However, no matter how the elections go, 2013 seems to hold great promises for the property sector in the country.

Here are four major developments that are going to greatly catalyse and leave an indelible mark in the sector this year:

1. County governments

One of the major highlights of the new Constitution is the introduction the county system of government, otherwise known as devolution.

After the March 4 General Election, Kenya will move to a system of county governments as part of plans to address huge development disparities across the country.

The 47 counties and smaller towns are going to be major engines of economic growth in various parts of the country, attracting key investments.

Workers of the many companies and businesses that will set base at the county headquarters are expected to create a high housing demand at the “grassroots”.

Then there is the development of the county headquarters. Observers say that the few buildings in most of the proposed county headquarters are in deplorable states, meaning there will be massive construction of new buildings to accommodate the requisite county offices.

The introduction of the county system of government is a development being followed very closely by players in the real estate sector.

Already, several developers have started planning how to “decentralise” their offices to the counties as they angle for possible construction tenders yet to be floated.

Recently, Housing Finance managing director Frank Ireri told journalists that the mortgage firm was planning how to seize the opportunities brought about by the counties.

“We think there are going to be great opportunities at the counties and we are keen to take advantage of the economic growth brought about by the counties,” he said, revealing that they plan to put up houses in the counties through Housing Finance’s revived housing development arm.

Indeed, the World Bank recently warned that the county system could affect the growth of the already established urban centres as “property monies are likely to be funnelled to rural areas”.

“Since most of the counties are predominantly rural, there is a danger that revenue collected from urban centres could be diverted to improve the conditions of rural areas,” said World Bank country director Johannes Zutt, warning that if that happens, urban areas will not be able to maintain or improve their basic infrastructure, making them unattractive to investment.

2. Real Estate Investment Trusts (Reits)

For the first time in Kenya, shares of real estate developments will be traded at the Nairobi Securities Exchange, enabling even small investors to own property by buying shares of such properties.

The Capital Markets Authority (CMA) has been working on Reits regulations since 2009, and now says the guidelines could be ready by the first quarter of this year.

As an investment vehicle, Reits is structured to enable individuals to own shares in huge property developments, thus guaranteeing them income at the end of every year.

Such real estate developments — could be residential, commercial, retail or industrial — are normally sponsored by a super investor that could be a pension scheme or fund manager or a cooperative society, who registers the housing scheme at the securities exchange before selling shares, to be traded on the bourse, to interested individuals.

At the end of every year, those who bought shares are paid dividends, depending on how much they had invested.

Acting CMA chief executive Paul Muthaura says the regulations of the investment Reits require directors of the super investor, who usually lists on the bourse at a trust, to declare at least 80 per cent of the total income from rent per annum as dividends.

The main advantage of Reits is that it makes it possible for just about anybody to invest in real estate. This, therefore, solves one big problem that has for a long time put real estate investment of out reach of the majority of Kenyans: its capital-intensive nature.

Second, Reits will make real estate liquid since those who want to opt out would easily sell their shares. Right now, a real estate investor who wants to dispose of his or her investment has to sell the whole property.

This makes real estate illiquid since it takes time to get a buyer with the kind of money required to purchase a mammoth real estate.

It is hoped that with the advent of Reits, Kenyans in their thousands, if not millions, will “own property” by simply buying shares, in much the same way they buy shares of other companies.

3. Konza Technology City

Described as one of the most ambitious construction projects ever undertaken in Africa, the Konza Technocity will be developed in four, five-year phases.

The first, expected to start this year, includes constructing Business Process Outsourcing sites, a financial district and a residential zone.

The $7 billion (Sh595 billion) tech park will sit on 5,000 acres in Malili Ranch situated in both Machakos and Makueni counties, 60 kilometres from Nairobi. The smart city is 50 kilometres from the Jomo Kenyatta International Airport, and 500 kilometres from the Mombasa ports.

The project, to be undertaken through public-private partnerships, is expected to create over 100,000 jobs. It will consist of a modern science and technology park, a hospital, a financial district, a mass transport system, residential estates and hotels, and even international schools. Ultimately, it is expected to turn Kenya into a continental leader in ICT.

The International Finance Corporation, part of the World Bank, commissioned international consultants to look at the master planning of the city, its economic viability and development of detailed development proposal.

So far, intense work by International Design Engineers and Pell Frischmann from London has resulted in the preparation of a series of master planning options for the project.

According to analysts, Konza Tech City is likely to be an entry point for global tech companies such as Apple, HP, Microsoft and RIM to set up more rooted and dedicated sub-Saharan African operations.

As a Vision 2030 project, Konza Tech City is considered a strategic opportunity for Kenya to spur the growth of economic activities that fuel higher value employment generation and growth.

The city provides a great opportunity to leverage Kenya into the knowledge economy. The vision for the city includes a strong emphasis on Information Technology and Information Technology Enabled Services, and a wide range of commercial and support activities.

Its launch, which has been postponed more than twice, is expected to be presided over by President Kibaki this January.

4 .Tatu City

Lying directly in the path of the planned urban development extending northwards from Nairobi, Tatu City has been hailed as a unique value proposition which will offer world-class infrastructure and a comprehensive live-work-play solution to its occupiers.

Deviating from the increasingly popular gated community concept, Tatu City is a holistically planned residential and commercial development, representing what property experts have termed a “new urbanism” in Africa, a “world class environment and a completely novel approach to organising the urban environment in Africa”.

When completed, Tatu City’s mixed-use environment will cover an area of 1,038 hectares and will be home to over 60,000 residents and another 20,000-30,000 day visitors.

“Tatu City will see the creation of a new focus area to the north of Nairobi, in line with Kenya’s planning for decentralised development zones to alleviate the congestion in Kenya’s most populous city,” says Gikonyo Gitonga, the managing director of CB Richard Ellis, a leading real estate firm in Nairobi.

Mr Gitonga says Tatu City will contribute to the achievement of the Nairobi Metropolitan Region’s 2030 Vision: “It is a socially integrated, secure and accessible city that will add value to the Kenyan economy and create jobs.”

However, the Sh240 billion project has been embroiled in court battles among original shareholders, delaying its long-awaited take off. Phase 1 comprises 3,000 residential units, 86,000 square metres of commercial office space, 31,000 square metres of retail floor space, public transport interchanges.
Adopted from N-Soko