Is it easy to start a wines and spirit shop in Kenya? Well, the answer to that question depends on how one is prepared for the task. Before we talk about what is required to start let us first take an overview of the industry.
Overview
- According to a statement by NACADA, about 15 million Kenyans drink regularly. 12 million drink daily spending an average of Ksh100 on each occasion.
- In 2010 the Alcohol Drinks Control Act (commonly known as Muthutho Law) was passed to regulate operations in this industry.
- Market for wines and spirits in Kenya is growing because majority find them cheaper than beer whose price has been rising in recent years due to implementation of SIN TAX.
- Sit-in customers spend an average of Ksh300 per day while takeaway customers spend at least Ksh210 per day.
How To Get Started
- Location
You first need to identify the ideal location and because alcohol consumption is a leisure activity many clients prefer to frequent establishments that are easily accessible from the main road. It is advisable to choose a location that has high traffic. Avoid setting up your business near schools as this is against the law.
- Competition
There is intense competition especially in urban areas and for this reason you need to ensure that your strategy is on point. Scan the market conditions and set a realistic price. You also need to keep track of changes in market trends if you want to remain competitive.
- Licensing
Licensing is the most important aspect of starting a wines and spirits shop. The most important license of all is liquor license which costs Ksh50,000. Other licenses include:
- Business License from County Council – Ksh3,500
- Health Certificate – Ksh3,000
- Approval by NEMA – Ksh3,000
- MCSK License – Ksh3,000
Requirements for setting up
The requirements for setting up depend on your long-term goals and capital constraints. For instance, if you don’t have much capital you can look for a 10×10 ft room and set up a simple wines and spirit takeaway shop. With more capital you can set up a sit-in facility with chairs, tables and shelves. On average rent prices range from Ksh20,000 – Ksh50,000 depending on location.
Cost Breakdown
- Licenses – Ksh70,000
- Furniture (Shelves, Display area, Tables, Chairs etc.) – Ksh50,000
- Stock (Inventory) – Ksh50,000
- Miscellaneous – Ksh100,000
- TOTAL – Ksh270,000
Expected Challenges
The first challenge you are going to face is intense competition. You will need to provide quality services and best prices in order to retain old customers who will in turn keep coming back with their friends. You also need to appreciate the challenge that you can only open your business from 5.00pm – 11.00pm on weekdays and 2:00pm – 11:00pm on weekends and public holidays.
Final Word
As we always tell you, there’s no marathon race that has ever been won by those who did not start the race. If you like the idea discussed above and you have what it takes to actualize it…then don’t wait to start…just do it.
