The country has for long been faced with the ever growing unemployment challenge, this has forced members of the public to opt into self employment to eke a living for themselves.
In several other instances, a section of Kenyans in the informal sector, or even the formal sector, but working for low wages, may have contemplated the idea of starting a side hustle to boost income.
Well, the liquor business in Kenya is among the most lucrative sectors of the economy, and when done right, a well stocked wines and spirits shop can rake in income, way above your dream salary.
On this segment, Whownskenya.com gives insights into all the requirements of setting up a liquor business.
You are required to come up with the desired name of your business and register it before you contemplate applying for a liquor license.
This was made easier by the government as you can register online via e-Citizen. Registration is free, thereafter you will pay Ksh150 for the name search and you will get a response in 3 days.
Depending on the type of business you want to register, you will be charged Ksh950 if registering the business as a sole proprietor, Ksh2,500 if a partnership, and Ksh11,000 for companies.
Kenya Revenue Authority (KRA) PIN
Tax compliance is a key component of setting up any business, and after acquiring the business name, proceed to registration for a PIN on KRA’s iTax portal.
You will be required to provide the business director’s personal KRA PIN along with copies of their ID card. On the iTax portal, apply for the business PIN, then submit the PIN acknowledgment receipt after which you will receive the company PIN.
This is the most strenuous but most important part, besides, it a liquor business, you need it either way. The National Authority for Campaign Against Alcohol and Drug Abuse (NACADA) has over the years doubled down on regulations governing liquor licensing.
But once you acquire one, you are good to go. There are three types of liquor licenses, all dependent on the type of liquor business you want to venture into or set up.
The retail license: This is for entrepreneurs seeking to sell the alcohol out of specific establishments such as wines and spirits shops, bars, clubs and super markets.
The wholesale license: This is for individuals or entities seeking to distribute liquor from distillers to retailers.
The brewers license: This is for individuals and companies seeking to produce their own unique liquor brands.
You are required to apply for the licenses from the Liquor Licensing Board of your respective counties. However, requirements may differ from one county to another. Factors such as the duration of the day the establishment will operate, the type of business, may influence the cost of acquiring the license.
You are also required to fill out the business name, physical address, KRA company/business pin, and Identification documents on the County Council Business Licensing application form.
This information is vital in determining how much the license will cost. Once green lit, you can begin selling alcohol.
General retail alcoholic drink licenses cost around Ksh50,000, general retail alcoholic drink license (off license) Ksh24,000, brewer’s alcoholic drink license Ksh1,000,000 and a bottler’s alcoholic drink license at Ksh250,000.
A hotel alcoholic drink license cost about Ksh50,000, a restaurant alcoholic drink license Ksh30,000 and a supermarket and franchised retail stores, alcoholic drink license at about Ksh80,000.
A temporary or occasional alcoholic drink license may cost about Ksh1,000, transferring an alcoholic drink license Ksh1,000 and Ksh1,000 for a license to remove an alcoholic drink.
This information was provided by Bar Owner Association Secretary-General Boniface Gachoka while appearing on an interview with TV47 on January 28, 2021.
Before you can set up your wines and spirits establishment, you are required to obtain an annual operation business permit from your respective city or county council.
It costs about Ksh3,500 and may take a week from the date of application to be issued.
The location of your establishment can determine the success or failures of your wines and spirits shop.
You should be able to identify an area with a high traffic of people. It is against the law to set up one near learning or religious institutions.
Ensure the security in the area you identify is great. Otherwise, revelers will not come to your wines and spirits outlet if they they fear getting robbed or mugged during late hours.
When setting up shop, make sure you are aware of the level of competition in the area. Also be aware of the alcohol brands mostly sold in the locality and which ones you should avoid.
The competition will also help you determine your prices. Ensure to be decent but competitive.
Size of the room/establishment
Ensure your are aware of the type of revelers in the area you want to set up your wines and spirits or any other type of liquor business.
If they love to have fun outside of their houses, then you need bigger room.
Furniture and the stock
To start a simple wines and spirits shop, the counter and stools may cost you around Ksh50,000. You will also need a stock of Ksh50,000 to get you going.
You are adviced to set aside between Ksh50,000 and Ksh100,000 for miscellaneous.
One of the most integral parts of your wines and spirits business will be identifying a licensed and trustworthy distributor to supply you with your preferred liquor brands on a timely and consistent basis.
Make sure your inventory is dominated by drinks that are largely consumed by your customers. Having other rarely consumed brands will only bring you loses.
Also, ensure your stock, is within the budget range of your revelers, having very expensive drinks in the shelves will prevent you from raking in quick profits, as they will take time to sell. Ensure you know which alcohol brands have more profits than others, and balance your inventory.
Lastly, ensure you have almost everything your customers need when enjoying themselves. Revelers prefer to indulge at a spot they know they can find everything they need.