Gaming is fast becoming a popular pass-time activity in Kenya; and since most people cannot afford to buy and maintain private gaming consoles at home then you can capitalize on this opportunity to launch a small business. One good thing about setting up a gaming lounge is that you don’t need to a lot of pre-training to get the wheels of the business rolling.
A strategic location and ability to keep up with trends are the two most important qualities required in order to conquer the market. Here is a step-by-step guide (inclusive of capital breakdown) that will help you get started.
Step One: Pick A Location
Your choice of location can either make or break your business. Previously, a location in the Nairobi CBD would have been highly recommended but nowadays there are too many outlets there and competition is cut-throat. Consider looking for a cheaper location, preferably near an upcoming college/university.
Think of areas like Chuka (Chuka University), Kabianga in Kericho, Karatina near Karatina University, Chepkoilel near Eldoret, Machakos near Machakos University and so forth. If you are near Nairobi then a location near an upcoming college branch (campus) in the estates is highly recommended.
Step Two: Carry Out A Small Market Survey
Market research is nothing really complicated. You can for instance create a short questionarre form and request a few people in your locality to share their expectations with you. If you get an overwhelming response – say 70% YES – then that means there is widespread interest in the market and therefore higher chances of survival. On the other hand if you get a 15% acceptance rate, then such a market would probably be difficult to survive in and you might want to keep off.
Step Three: Rent A Room, Polish It Up
Look for a 50 square feet room, one that can accommodate several machines, chairs and still leave some space for future expansion. The average rent price for such a room is about Ksh5,000 with a deposit amount of a similar amount. If you don’t have a lot of money to spend, avoid going for rooms where landlords ask for a good-will payment. Lastly, bring in a carpenter and let him do his job (this will typically cost you around Ksh10,000).
Step Four: Shop And Buy Equipment
Basically you will require a minimum of one 21 inch colored TV. You can get a new one for as little as Ksh25,000 in places like Luthuli Avenue in Nairobi or in top supermarkets countrywide. Secondly, you will need gaming units like consoles, pads among other accessories. The cheapest gaming unit on the market currently is Playstation 2 which goes for Ksh10,000.
Playstation 3 and Xbox 360 cost about Ksh40,000 each. Note: There are two main categories of gaming units i.e. chipped and unchipped. Chipped ones have their lenses changed in order to read a wide variety of DVDs. Unchipped ones only work with original DVDs copies only. Be sure to ask your vendor for a clarification on consequences of owning chipped vs unchipped gaming equipment.
Step Five: Get Your Licenses
Single Business Permit: Issued by County Governments. Cost may vary from one county to the other.
Music Copyright License: You will need this license if you’ll be playing music in your premises.
If you are planning to open the business within the boundaries of Nairobi County, then you should be prepared to set aside at least Ksh35,000 for licenses. In Kajiado County (areas like Ongata Rongai, Kitengela, Ngong, Kiserian etc), the charges are cheaper and you can set aside Ksh15,000 for this cost head.
Step Six: Market Your Business
Attracting new customers (and retaining them) is another area that needs to be taken care of. 50% of the battle is won if you find a prominent location with enough footfalls. The other 50% is won by coming up with good marketing strategies e.g. in-house tournaments, pamphlets, opening offers & discounts among others. Your typical target market will consist of male students, teenagers and working class people aged up to around 30 years.
How Much To Invest
The overall cost of starting a small gaming business is Ksh80,000 (Start small and keep re-investing your profit for 6 months).
How Much To Expect
A fully-fledged gaming lounge with 4 TV screens can rake in about Ksh3,000 per day or roughly Ksh60,000 net profit per month.
The main advantage of starting this business is that you can start small and grow big in a short period so long as you are prepared to sacrifice for some time. You can even expand your business to further accommodate things like: movie shop, DJ classes & lessons, event management, audio and video production and so forth.