For ‘young’ people, starting your very own business and becoming self employed is the most suitable alternative to the ever growing hard to get 9 to 5 jobs. Starting a business is always the best alternative to the ever elusive jobs.
A survey by the Kenya National Bureau of Statistics (KNBS) revealed that seven (7) million Kenyans are unemployed. An additional figure of over 1.4 million are actively looking for employment. With those figures, it is easy to see why more and more people are looking for alternatives.
Because we know very many business ventures require huge amounts of capital to get started, this new How To series will show you how to start and execute several small businesses that require capital from as little as 5,000 Kenyan Shillings. Thus giving you the keys to the kingdom of starting a profitable business with little or no capital.
If you are also just looking for a side hustle to maybe supplement your 9 to 5 or full time job, this is for you.
All that you need to thrive in these businesses besides capital, is good customer service of course, great managerial skills, a suitable business location, and a clear cut vision.
Today’s article will show you how to set up your very own Liquor Store business in Kenya. While this is not exactly a 5,000 Kenyan Shillings capital business, I am sure you would agree that this is also a very viable option.
Liquor Stores sell prepackaged alcoholic beverages at retail prices, to consumers. The Liquor Store business popularly referred to in Kenya as Wines & Spirits, is rather popular. Especially within urban areas due largely to the fact that individuals in these areas have a lot more disposable income.
How To Start A Liquor Store Business In Kenya
Just how much do you need to start an Liquor Store business? What paperwork, and or equipment are you required to have in Kenya? If you are considering this option, here is everything you will need to kickstart your Liquor Store business in Kenya.
- Have A Business Plan. For every business, having an effective and concise business plan is very important.
- Figure Out Your Market. It is very important that you figure out your market. Especially before starting your Liquor Store business. Your potential customers will be low to middle and to an extent, high income earners. As well as individuals who prefer to enjoy their alcohol at home or during house parties.
- Plan Out Your Marketing. Next after figuring out your target market, should be planning out your marketing. Yes, your Liquor Store business just like any other business venture, definitely needs marketing too. Learn how to get the attention of your target market. Would discounts work? Or referrals or both? How about posters, sponsored adverts on social media and fliers. Email marketing for example, is one cost-effective way that is also very efficient in building the customer base for your Liquor Store business. If you have a website for your business, you can gather email addresses of people who visit your site. Fliers, are also another cost-effective way to market. Flyers are one ‘page’ advertisement pieces that can be created at little or no cost. You can distribute these to people, in and around the area where your Liquor Store business will be located. Find out what is most effective for you and use that or a combination of all of them.
- Figure Out How To Raise Capital. The Liquor Store business like any other business, requires capital investment. After completing your business plan, knowing your market and finding a location, this should be your next line of action. Although Personal funds are sometimes the primary source of funding for many new businesses, doing just that may not be enough. Taking on a financial partner is your best bet. If obtaining a business loan from financial institutions proves difficult, the next option should be getting it from friends and family. Loan arrangements in this setting are usually much more flexible as they come with much lower interest rates. All you would need to do is convince said friends and family, of the profitability of your business. Please make sure however, that you pay back the money and in good time too, so as to maintain confidence which you would need if you would require money from them in the future.
- Create A Unique Logo. The importance of a very well-done Logo cannot be over emphasized. Especially with regards to having a positive first impression on your potential clients. As a Liquor Store, your logo and how it hits anyone who sees it, will be the very first introduction to you and your business. Make sure you create a logo that stands out and sets you apart from the competition.
- Choose The Most Suitable Business Structure For Your Liquor Store. Choosing a business structure can determine your personal liability, how much you pay in taxes, as well as your ability to raise financing. This is why it is very important that you choose the business structure that is most suitable from the get go because changing structures later on, could lead to tax consequences. Be sure to consult a business accountant and a lawyer too before deciding if your Liquor Store would be a Sole Proprietorship, a Partnership, a Corporation or a Limited Liability Company (LLC).
- Register The Name Of Your Liquor Store. You will need to register the name of your Liquor Store startup if you plan to run it as a legitimate business. The business name registration would cost you around 1,000 Kenyan Shillings.
- Get A Liquor License. This is one very important license for your Liquor Store business as you can operate with one. Especially a valid one. The Liquor License acquisition in Nairobi according to Simba POS, involves the Liquor License application which is 6,000 Kenyan Shillings and the actual license which costs over 50,000 Kenya Shillings per year.
- A Business License Or Permit. This is one of the most fundamental licences that businesses in Kenya are required to have before commencing operations so yes, you will definitely need one for your Liquor Store. Although the cost of a business licence or permit differs from county to county, it usually sits at around 3,000 Kenyan shillings.
- A Location. As with most businesses, a good location is one of the major factors that determine whether or not your Liquor Store will succeed. Especially with regards to clients who prefer to meet up in official settings or premises. Find a location that is both ideal and easily accessible.
- Make Sure Your Liquor Store Is Insured. Although nobody likes to incur extra costs, Insurance is one essential part of starting any business.
- Secure A Fire Clearance Certificate. This particular certificate, is received after undergoing an inspection which you pay for. It also involves getting advice regarding the guidelines of protection against fire, and the installation of the required equipment like fire extinguishers.
- Be Trained In Sales. Ensure that you as well as your staff are well trained in sales. This will especially come in handy when your business begins to grow and you are trying to win over new customers and maintain already existing ones.
- Get An Employer Identification Number. If you will be looking to set up checking accounts for your business and or hire employees, you will need an Employer Identification Number. To get one, simply get in touch with Kenya Revenue Authority which is Kenya’s internal revenue service.
- Employ More hands. No one is an island, you really cannot carry out all the daily activities of a Liquor Store efficiently, on your own. Just think of all the numerous accounts you would handle. Especially when your customer base, begins to grow.
- Make Sure Your Liquor Store Business Has An Online Presence. Yes, you need to have an online presence. This includes creating a Facebook page, as well as Twitter and Instagram accounts for your business. You can also get a website created for your business as well, to further attract larger customers who may require your services in bulk. Make sure the website is easy to navigate, make sure your content is also engaging. Ensure that all the relevant information about your company (which includes the contact details for your business and testimonials) is included, as well as the terms & conditions and privacy policy. Be sure to hire a professional for this, so as to ensure that the website is very well done and looks presentable. The hired professional, will also make sure that your website is well maintained and updated regularly. Creating a LinkedIn profile for your business will also be a good look and will help you further network with other businesses. Just make sure that you update your LinkedIn.
- Make Sure The Accounting For Your Liquor Store Business Is In Order. Make sure you always have a record of your expenses as well as the income your business generates. Doing this, will ensure that you have a full understanding of how your business is performing financially. It will also help you when it’s time to file your annual taxes.
- Get A Vehicle For Transportation. As a Liquor Store especially one which is just starting out, one of your most vital resources will be transportation for deliveries. Make sure you invest in a Van or Truck. This will ease your movement to and from customers who require your goods. It is also advisable that you have your campany name and or logo imprinted on your Van and or Truck. This is also part of advertising the presence of your Liquor Store business.
- Vehicle Maintenance. After sorting out your transportation needs, it is important to also budget for the maintenance of said vehicles.
- Figure Out Payment Arrangements That Work Best For Your Customers. You need to know the payment methods and arrangements that would work best for your customers and potential customers i.e if they would prefer to pay via M-Pesa, T-Kash, Airtel Money, via POS or in cash. Knowing this will help you offer more payment options and also be more equipped to serve them better.
- Talk To Others Who Have Done This Before You. No man is an island. While a number of established business owners are more than happy to give advice to new entrepreneurs, it can take a while to find one who will be willing to do so. The wait however, will be worth it. Talk to entrepreneurs who have gone into or are still in the Liquor Store business. Examine, study and understand their various business models and strategies. You never know, you just might pick up one or two nuggets of wisdom from them.
And that is it! All you need to know about starting your very own Liquor Store business in Kenya.
Is the Liquor Store business, a suitable venture for you to go into? That question, is left for you to think on and answer. This writer’s goal is to open your eyes to the various entrepreneurial opportunities that abound in the country.
One important thing besides the tips provided here, is to be good at what you do. Continue to think of new ideas and ways to expand and grow your business.
Also while the prospects are very promising and running an Liquor Store business might seem easy, please have a realistic approach as well. It still requires a fair amount of dedication and patience regardless and as with any business, there is a chance that you might incur losses. Especially at the beginning, so please keep your overheads low.
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