There are many people who love wines and spirits making the wines and spirits business a profitable venture in Kenya. NACADA estimates that there are 15 million Kenyans that drink on a regular basis. Although there are many regulations that govern the consumption of beer in Kenya, its consumption has been on the steady rise.
In this article, I will take you through the process of how you can start a wines and spirits business in Kenya.
Write a Wine and Spirits Business Plan
It is best that you plan your business before getting started. A business plan helps you maneuver through the business and prepare how to counter business risks. Some of the things to include in your business plan include:
- Startup costs
- Source of startup capital
- Market segmentation
- Suppliers and distributors
- Business location
- Strengths and weaknesses of the business
- Future cashflow projections
Read also: How to write a business plan.
Identify a Good Business Location
Before starting a liquor business in Kenya, you need to identify an ideal business location. Locate the business in a place with high traffic like in a town. It is a requirement that all liquor businesses must be established away from schools.
Therefore, you must ensure that the location is not near a school or a religious institution. Otherwise, you will be contravening the law and you may have your business license canceled.
Register Your Business Name
To start a wines and spirits business in Kenya, you need to register your business name. You can register your business name through the eCitizen portal. You will need to do a name search and then if the name is available, you go ahead to register it. You can register a business name for a sole proprietorship on eCitizen for only Ksh 1000.
Read also: How to start a fast food business.
Secure KRA PIN
You need to get a KRA PIN so that you can be paying taxes for your liquor business. You can apply for the KRA online through the KRA iTax Portal. You need to submit the KRA PINs and ID copies of the sole proprietors when applying for the PIN. You will then be issued with KRA PIN for your liquor business.
Identify Liquor Distributors
You need to identify reliable liquor suppliers for your business. Finding cheaper suppliers will help you retain some good profits in your business. You can liaise with liquor manufacturers so that they can be supplying you with stock.
The supplier or distributor must be licensed to supply alcoholic drinks. Make sure to order drinks that your customers prefer. Do not order drinks that are beyond the price of your customers to avoid losses.
Read also: How to start a pool table business.
Get Wines and Spirits Business Licenses
To operate any wines and spirits business in Kenya, you must be licensed. There are several licenses that you need to operate a liquor business.
The most important one is the liquor license that goes for Ksh 50,000 annually. You will also need to pay Ksh 6,000 facilitation fee for the processing of the liquor license. Other licenses that you will need include:
- Single business permit: Ksh 4,000
- Health Certificate – Ksh 3,000
- NEMA licensing – Ksh 3,000
- MCSK license – Ksh 3,000
- General retail alcoholic drink license – Ksh 50,000
- Fire and safety certificate – Ksh 3,000
Starting Capital for Wines and Spirits Business in Kenya
The cost of starting a liquor business depends on your business location and its size. You can start a liquor business with Ksh 300,000. The following is the startup capital breakdown for a wines and spirits business.
- Licenses – Ksh 70,000
- Liquor stock – Ksh 100,000
- Furniture and branding – Ksh 50,000
- Rent – Ksh 20,000
- Fridge – Ksh 30,000
Read also: Business ideas for stay at home mothers.
Is Wines and Spirits Business Profitable in Kenya?
The wines and spirits business is one of the most profitable businesses in Kenya. With a good business location, you can make between Ksh 30,000 and Ksh 100,000 profit every month. To ensure that your business is profitable, make sure to sell fast-moving liquor and one that is within your customers’ budget.
Competition in the Wine and Spirits Business in Kenya
Before starting wines and spirits business in Kenya, you need to consider the competition. Generally, it is one business with high competition. To win the competition, it is best that you offer high customer service.
You can also consider advertising your wine and spirits business. Also, starting your business in a busy town will be an added advantage. Once your business is established, you will start having many customers.
Read also: How to start a yoghurt business in Kenya.
Challenges in the Wine and Spirits Business
Every business has its set of challenges. One of the challenges you can expect in the liquor business is high competition. There are many liquor outlets and you need to devise a way to compete with them fairly.
You will also need to be ready to deal with drunken people who can sometimes be violent. You will also need to be aware that you are only allowed to operate the business between 5 pm and 11 pm. Finally, there are many regulations that govern the wines and spirits business which you must comply with.