Putting up and managing your own bar seems like a good business approach in Kenya at the moment. However, are you up to it? Managing your own bar requires thoughtful planning, hard work and long hours. All you have to do is analyse carefully and set your goals perfectly. On this exclusive post, we are going to highlight some of the determinants you have to put into consideration before starting the business.
The most critical aspect of starting a bar business in Kenya is the location just like a car wash business. Before location hunt, decide on what you need your bar to look like and the kind of consumers you want. Then make sure it is available, accessible and has sufficient parking.
After you’ve found a location, study the area and all its demographics, your business contestants, and other factors like rent. Rent is necessary because your bar may be crowded night after night, but you’ll have to terminate it eventually if you’re making just enough money to pay the rent. You don’t need a considerable reservation to start a bar business; it can be extended later as the company grows.
In the freshly passed Alcoholic Drinks Control Act 2010 — generally known as Mututho Law — the alcohol business has become more controlled and, consequently, the original high start-up cost is required to include licenses.
Essentially, the following legal procedures and licenses are required;
- A liquor permit that costs KSh50,000 in the urban centre/ Ksh15,000 for rural areas – This will be refreshed yearly.
- Permission by National Environment Management Authority NEMA – Ks3,000MCSK License – Ks3,000
- Nairobi City Council permission for registration of the business that brings KSh3,500 as a fee.
- Moreover, you will be required to pay for a health certificate that attracts KSh3,500.
Requirements for setting up this business
The requirements for establishing depend on your long-term goals and capital constraints. An average bar needs up to Kshs 500,000 while a really big one can cost you up to Ks 2 Million.
On medium rent, prices range from Ks 70,000 – Ks100,000 depending on the bar location. For employees, you can begin with four to six attendants and waitress, remember that you are just starting up on this. For the decor and arrangement, you can spend up to Ks 100,000 since they determine the atmosphere that clients experience. You will also need to have an electronic payment system (POS) so that you can follow the sales easily. As the owner, it’s advisable to be controlling matters of economics and management at the start. Alternatively, you can choose an effective manager. The competition is laborious, and you will have to be always on your toes to stay ahead.
On Fridays, you can let a DJ for entertainment. Master that this is an investment, you must determine to give all it needs to make it a success ( good ROI)
Cost Breakdown of this business
- Licenses – Ks70,000
- Furniture (Shelves, Tables, Display area, Chairs etc.) – Ks 100,000
- Insurance cover – 30,000 ( 1.5% to 2% of gross sales)
- Good Music system – 70,000 + 2 Flatscreen Tv – 90,000
- The salary for the Waiters- Ks60,000 – 4
- Security – 30,000 – 2 bouncers
- Stock – Ksh200,000
- Miscellaneous – Ksh100,000
- TOTAL- Ks750,000
The first challenge you are going to encounter is intense competition. You will want to provide excellent services and the best prices to retain old customers who will, in the long run, keep coming back with their buddies. It would be best if you also appreciated the difficulty that you could only open your bar business from 5.00pm – 11.00pm during the weekdays and 2:00 pm – 11:00 pm on the weekends and also on public holidays.
At the inception, it will be difficult to procure your products directly from the producers as you have to gain a good relationship with all of them, which will be built with time as your yearly turnover also grows. It would be great if you also learned to deal with dishonest or incompetent staff and clients fighting or using drugs. Here, I suggest tight security and good associations with the police station in your area.
You will need to invest in meaningful resources in marketing your bar. The idea is to build buzz about your business and to bring large crowds into your business as soon as possible. Discount are valuable startup retailing idea, but they may need enough reserve capital to incorporate operating losses during the initial few months of operation.
Another difficulty you will face is the time involvement and hours of operation of the business. If you are an early riser, you might not enjoy begetting to work until 3 or 4 am at your bar business. If you have your family, you need to address how owning a bar will touch them. Several days you will have to be at your business premises from the time you wake up–lets say, about 10 or 11 am to the time you go to sleep that is approximately 4 or 5 am.
As you can understand, this could take its damage on your family life. Additionally, if you’re the kind of person who would rather deal with paperwork or convene in an office where you don’t have to speak to people, this industry is not for you. You will need to be out there speaking to people and shaking hands! we already said that. You can as well take a look at other lucrative business ideas here.
If you believe this is the business of your choice, it’s your time to get to work.