How to Start a Wines and Spirits Business in Kenya

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.

According to a statement by NACADA, about 15 million Kenyans drink regularly. 12 million drink daily spending an average of Ksh.100 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 Ksh.300 per day while takeaway customers spend at least Ksh.210 per day.

Wine and Spirits Business in Kenya is very popular. This business is especially popular in estates within urban centers where there’s a high population of people with disposable income. Coupled with the fact that a high number of people prefer to buy alcohol and drink at home (or house parties), the potential for wine and spirits business in Kenya will only keep growing.

Opening a liquor store can be a great way to ensure a steady income, because people drink alcohol in both good times and bad.

In addition, retail alcohol sales are heavily regulated, and it can be difficult for an interested businessperson to know where to start. Nonetheless, with proper counsel and wise strategies to boost traffic, your store can be a reliable income stream for years to come.

Is Wines and Spirit a Good Business in Kenya?

Morality aside, a lot of Kenyans drink religiously meaning there are huge profits to be made in this business. And you can easily confirm this by peeping into the latest wines and spirits wholesale prices in Kenya and then comparing the prices that wholesalers give retailers and the average retail prices.

Actually according to my source, the minimum profit you can make per bottle is Khs.30 so do your math considering that you are dealing with fast moving goods.

Wholesalers make more because they are able to move bigger volumes.

What are the pros of the wines and spirit business in Kenya?

The biggest advantage is that you hardly lack customers. You see, the prices vary a lot and you’ll stock some cheaply priced liquors (make sure they’re KEBS certified) for common mwananchi as well as pricey whiskeys for the well-off.

This means that if you’re in a strategic location, the constant flow of customers and good margins will soon give you financial freedom.

What are the cons of the wines and spirit business in Kenya?

There are several issues here:

Morality: If you are a deeply religious person, the business may seem as like it goes against Christian ethos. Certainly, your pastor, Imam, or Father (priest) will not be impressed.
The Licenses: To start a wines and spirits business, the government may take as much as Ksh.100,000 (more on this later) in licensing fees, an amount which is a bit steep for small traders.
Corruption: The high cost of wines and spirits license in Kenya prompts some people to corrupt police officers and regulatory authorities in an effort to ‘save’ which can be very costly in the long run. .. Police should not be a problem if you have the listed licenses, you are not selling liquor from the black market (make sure they’re KEBS certified) and you open at the specified time.
Operating hours: You may be prosecuted if you operate your business outside the authorized hours as per your license.

All the same, the profit margins make the business hugely attractive to thousands of enterprising Kenyans.

Like every other business, it may seem a bit hard at the start but once you pick, you will forget all the initial challenges.

Again, it’s always better to start small. The capital injection will be lower plus you will have ample time to study what your customers like instead of locking capital in slow moving brands.

Steps to Start a Wines and Spirits Business in Kenya

In this section, i’ll take you through the steps to start a wines and spirits business in Kenya.

Find a suitable location

In this business, location is everything – unless of course you have some unique drinks that can’t be found elsewhere.

So, start by getting yourself an amazing site in a busy street/road/corridor.

The room doesn’t have to be big for a start and some people start in premises smaller than 10×10 square feet.

The success of your liquor store is inextricably connected to its location. Identify an ideal location and because alcohol consumption is a leisure activity many clients prefer to frequent establishments that are easily accessible from the main road.

Once you’ve identified what seems to be a suitable location, you need to make sure you can actually operate a liquor store there. Many localities will have restrictions on where alcohol can be sold—not in close proximity to a church, for example.

Avoid setting up your business near schools as this is against the law.

If you open a liquor store in a market that’s already saturated, not only is your store unlikely to do well, but you’re likely to eat into a local competitor’s bottom line as well.

Market saturation is heavily influenced by distance to competitors, but there are other factors at play. Another influential factor is the demographic and cultural makeup of the neighborhood itself.

The place you establish your brick-and-mortar shop can make all the difference in regards to a successful Wines and Spirits business in Kenya.

A remote location far outside of residential areas that’s hard to get to will not yield the same results as a desirable spot in the heart of a shopping center/estate; nor will the price tag be similar.

When evaluating spaces, be sure to properly consider all factors, including:

Accessibility, cost, target market, security, any legal considerations – like Wines and Spirits should not be near Schools

Have a Plan

No business, no matter how great the underlying concept, can succeed without a plan.

Before securing funding or renting a space or any other step required to get your liquor store off the ground, it’s important to have a business plan in place.

This goes beyond the surface level details – “My business will be open seven days a week with an inventory focused on working class men and women” – in order to truly explain the what's, when's, where's, why's, and how's of your entire operation.

Remember, a business plan is both for your benefit and that of potential investors; banks, angel investors, and business partners will likely want to see your business plan before moving forward and financially backing your business.

A strong business plan makes you look trustworthy and intelligent which will help convince potential partners to work with you and financial partners to invest in your business.

Research the Market

Without a solid approach to marketing, you will likely spend your first few months in the business working in a mostly empty store.

When you’ve established that you’ll be able to sell alcohol at your chosen location, you need to take steps toward crafting a business plan. The first of these is to research the market around your chosen location.

Liquor stores are very much neighborhood stores. What sells in one neighborhood won’t necessarily sell in another. An influential factor is the demographic and cultural makeup of the neighborhood itself. The more detailed the market analysis in your business plan, the more detailed your cost estimates can be.

Take factors like ethnicity, age, marital status, and income into account when you’re conducting your market analysis, because they all heavily influence drinking habits.

Create Sales and Cost Projections

The market analysis is meant to give you a good idea of your customer base. With an idea of the composition of your customer base, you can create sales and cost projections based on buying habits and price points for items in your area.

For example, if you have a disproportionate amount of young single customers or university/college students in your area, you can anticipate selling large amounts of spirits.

Approach wholesale distributors about their case prices and compare that expense with the local price point of popular brands. When that’s combined with traffic estimates and overhead (including rent and labor costs), you can estimate costs and sales.

Don’t neglect the impact of competitors on your sales.

Obtain Financing If Necessary

As a rule of thumb, a new business owner should use as little financing for a start-up as possible. This rule applies to liquor stores too, but since demand for alcohol is more or less fixed, many lenders will regard a liquor store as an unusually safe investment.

Unless you have a large amount of money you plan to invest in your Wine and Spirits business, you will likely need to secure outside financing. For most entrepreneurs, this means a small business loan through a Bank or SACCO.

When you approach the lender, bring your business plan and financial statements (including income, assets and liabilities, and tax documents) along with you.

Although business plans are detailed documents, you will have already done the most important work, the market research and the revenue projections.

Find out more about how to write a good business plan or hire a professional business plan writer to guide you.

When starting off, ensure you determine exactly how much you will need to purchase stock, do interior fittings, pay for licenses, rent deposits etc.

After covering all this costs, ensure you have some other funds at your disposal for any unforeseen circumstances.

You need to ensure you have enough funding to get started and cover any emerging matters during your first 3 months of operations.

In order to start a wine and spirits business in Kenya, there are a few legal and licensing requirements that you must adhere to. Luckily, most of the legal/licensing procedures can be undertaken online without having to physically visit many government offices.

Basically, the legal/licensing requirements involve business registration, tax registration and county business permits

Business Name Registration

The registration of businesses in Kenya has been made easier and faster. One can now do a name search and even register their business fully online on eCitizen.

Here is the process you’ll follow:

a. Company/business name reservation

Register with eCitizen (FREE) – This is a one-stop portal for accessing most Kenyan government services
Apply and pay for company name search (Ksh.150 per Name) – You can apply for up to 3 names in one order
Obtain company name reservation in 1-3 days (Free if Name Search is successful) – This is usually sent to your email/eCitizen account and can be downloaded.

b. Company/business registration

Apply and pay for company registration (online eCitizen, about Ksh.11,000). A limited company is the most ideal business type. Companies can have a single director or more. Alternatively, you can register a Partnership (about Ksh.2,500) or Sole Proprietor (about Ksh.850)
Submit signed application forms
Obtain company registration documents (2-3 weeks)

Kenya Revenue Authority (KRA) PIN

KRA is the Tax authority in Kenya and all companies must have a Company Tax registration PIN number.

The entire registration process can be done online on the KRA iTax Portal. The process entails:

Taxpayer registration (Submit Director(s) Personal KRA PIN plus ID Copies
Apply for company PIN (Online, KRA iTax Portal)
Submit PIN acknowlgement receipt
Obtain company PIN

NSSF and NHIF Registration can also be done online for Companies to submit employees’ PAYE deductions

Obtain Liquor License in Kenya

This is the most critical component when starting a wine and spirits business in Kenya.

After all your hard work, the last thing you want shutting down your business is a license issue. This is often a thorny issue for Wines and Spirits Shops in Kenya though, and it’s important you take the licensing process seriously, especially early on or if and when the rules change.

You cannot operate a wine and spirits business in Kenya without a valid liquor license.

The cost breakdown for Liquor License (in Nairobi) is as follows:

Liquor license application Ksh.6,000
Liquor license Ksh.50,000 (Valid for 1 year)
Liquor license bribe Ksh.20,000

Other licenses

Fire license – Ksh.4,500\
Food and beverage – Ksh.5,000
Single Business permit – Ksh.15,000
Inspection – Ksh. 6,000
Music copyright – Ksh.5,000

The cost of this licenses may vary depending on the county you are.

County Business Permit

For you to conduct or start a wine and spirits business in Kenya, you also need an annual business permit from the City Council.

Talk to your local County Council officers or Huduma centre on the cost and they may visit your premises to confirm the size of the location and they will advise on how to pay.

You will get a receipt when you pay, and then the certificate itself after about a week.

The Unified Business Permit in Nairobi may cost around Ksh.26,500 for a full-fledged wine and spirits business in Kenya (Nairobi CBD and estates)

The Nairobi City County announced the launch of the Unified Business Permit which consolidates all the requirements for running a business within the County.

This is a one-stop source whereby, after acquiring your Unified Business Permit, you will have paid for a Single business permit, fire Clearance Certificate, Advertising Signage (300mm by 600 mm or less), Health Certificate, and Food Hygiene.

The Unified Business Permit in Nairobi may cost around Ksh.26,500 for a full-fledged wine and spirits business in Kenya in Nairobi CBD and nearby suburbs

Liquor License in Kenya – What are the Different Types?

The Liquor Licensing Act in Kenya comprehensively explains the requirements that a business person ought to fulfil to obtain their permit. However, different regions have imposed further laws for the sale of alcohol, making it even harder to meet such stringent conditions.

Therefore, there is always intense competition that will ordinarily make the entire process of obtaining a liquor license in Kenya incredibly cumbersome.

When you are trying to figure out the most appropriate liquor license for your business, you ought to consider certain paramount factors.

What are the different types of liquor licenses in Kenya?

Brewer’s license

This is the license for the big boys, those firms that handle the processing part of any alcoholic drinks in Kenya. Of course, a brewer’s license is subject to certain conditions set by the Alcoholic Drinks Control Act.

The company is allowed to brew and store alcoholic drinks in their depots. On top of this, they are given the permit to sell their produce in wholesale according to prevailing conditions.

They are also allowed to bottle alcoholic beverages that are processed at their premises.

Wholesale license

If you are looking to make it big and earn massive profits, you ought to choose this license. With this permit, a wholesaler is allowed to sell alcoholic drinks on the specified premises subject to the conditions set.

Retail license

This is probably the most popular liquor license in Kenya. The retailer is allowed to sell alcohol on the specified location during certain hours. All the conditions for operating under this license are detailed on the fine print.

What Should You Do to Get a Liquor License in Kenya?

Now that you are aware of the different classes of liquor licenses in Kenya, you might have a good idea of where to start. However, there are other intricate details, not highlighted in the text, as mentioned earlier, that you need to consider.

Before the liquor licensing board approves your application, there are specific parameters that you ought to meet. Even though licenses vary significantly and different counties have further regulations, you need to, at least, think about the following:

What establishment are you? Will it be a bar, wines and spirits or a restaurant?

Does the drinking or selling happen during the day, night or both?

What hours are you planning to sell your alcoholic beverages? The later you stay open, the costlier the liquor license.

Are you interested in manufacturing, distributing and selling any type of alcoholic beverages?

The Application Process

Ordinarily, these types of licenses are applied in person from the respective County Council Business Licensing offices.

When you start a wines and spirits business or any other alcohol selling business, you will have registered with the attorney general’s office.

Therefore, you ought to visit the licensing office after you have an official business or company name.

Reliant on the nature of your business interests, you will be given different forms to process your application for alcoholic beverage license. These are:

Application for the Grant or Renewal of an Alcoholic Retail Drinks License
Demand for the Grant or Renewal of a License to Manufacture or Produce an alcoholic drink
Application for the Grant or Renewal of a License to import or export an alcoholic drink

You are supposed to read carefully the applications instructions that you will follow when filling all the necessary details. Attach your registered business name, physical address, business PIN (Personal Identification Number), copy of the certificate of incorporation, and your identity document.

Once submitted, you are going to receive one of the licensing officers in your business premises for inspection and certifying its viability for the liquor license applied.

All the information gathered during the initial visit will be utilized to determine the fees applicable for the license as well as approval.

It is up to the directorate to determine your eligibility, and they can either reject or grant the license for you to start a wine and spirit business.

Once allowed, the applicant is required to pay the applicable fees to commence selling alcoholic beverages.

What are the Different Fees for Liquor Licenses?

Although there are three general categories of licenses according to the Alcoholic Drinks Control Act 2010, you will find that these are subdivided further to represent the true nature of all businesses.

Therefore, if you are looking for a renewal of liquor license, or processing for the first time, these are the applicable fees.

General retail alcoholic drink license, Ksh.50,000
General retail alcoholic drink license (off license), Ksh.24,000
Brewer’s alcoholic drink license, Ksh.1,000,000
Wholesale alcoholic drink license, Ksh.50,000
Import alcoholic drink license (wholesale), Ksh.1,000,000
Bottler’s alcoholic drink license, Ksh.250,000
Distributor alcoholic drink license, Ksh.50,000
Hotel alcoholic drink license, Ksh.50,000
Restaurant alcoholic drink license, Ksh.30,000
Club alcoholic drink license (members’ club), Ksh.100,000
Supermarket and franchised retail stores, alcoholic drink license, Ksh.80,000
Theatre alcoholic drink license. , Ksh.15,000
Traveller’s alcoholic drink license, Ksh.30,000
Railway restaurant car alcoholic drink license, Ksh.5,000
Steamship alcoholic drink license, Ksh.30,000
Temporary or occasional alcoholic drink license, Ksh.1,000
For transferring an alcoholic drink license, Ksh.1,000
For removing an alcoholic drink license, Ksh.1,000

Once you have successfully submitted the required payment for the liquor license in Kenya, you can start selling under the permit’s restrictions.

A business is required to display their permits on their premise for inspection at any time.

If you are planning to open a joint that sells alcohol, you will require a permit to operate. That is why the liquor license is an essential document for anyone selling or processing alcoholic beverages.

You ought to comprehend the laws and the type of license you require. With the information above, you will always get it right.

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 Ksh.10,000 to Ksh.50,000 depending on location.

Cost Breakdown

Licenses & Business permit – Ksh.70,000
Furniture (Shelves, Display area, Tables, Chairs etc.) – Ksh.50,000
Stock (Inventory) – Ksh.50,000
Miscellaneous – Ksh.100,000

TOTAL – Ksh.270,000

Furniture and Fittings, Painting & Branding

After securing the requisite licenses, it’s time to move into a higher gear as you prepare for a grand opening of your wines and spirits joint.

You will need to mount some shelves and display cabinets so talk to your carpenter.

Depending on the size of the shop, furniture can gobble up anything between Ksh.30,000 and Ksh.70,000.

Be sure to paint and brand the business at this stage.

Stocking your business

A lot of new owners ask about the most reasonable amount to invest in stock, but there’s no correct answer as it's contingent on so many factors.

However, my trusted source says anything from Ksh.50,000 worth of stock going up is fantastic. Then top up slowly by slowly as you learn the ropes of the industry. The quality itself will be determined by the prevailing wine and spirits prices list as of the day of buying the initial stock.

To get the best deal, compare the wines and spirits wholesale prices in Kenya from the various wines and spirits distributors and buy from the fairest.

This takes me now to the juicy part… here is a list of the most reputable wines and spirits distributors in Kenya.

Wines And Spirits Distributors In Kenya

NAIROBI REGION

Jays Wines Distributors Limited Nairobi Kenya – 0705 570066
Mwalimu Wine Agency Nairobi City – 0701 222648
Kenya Wine Agencies – 0722 202041
EABL Gift Shop – Ruaraka – 0727 224 444
Rwathia Kariokor – 0726 698 383
Ishano Distributors Buruburu / Embakasi – 0721847740
\Veew Distributors – Huruma/ Pangani/Eastlands/ Umoja – 0722933640

CENTRAL REGION

Kamahuha Ruiru – 0723766502
Muranga Wholesalers – 0721530949
GK Kamuri ,Sagana/ Karatina – 0722285490
Wamuti Distributors – Nyeri & Nanyuki – 0724113874
Mbote Distributors – Gatundu – 0713222168
Pekay Brothers – Thika – 0727820448

EASTERN REGION

Laare Springs – Isiolo & Meru – 0700900321\
Mt.Kenya Distributors – Embu, Meru, Nkubu – 0711307114
Lenairoshi Maralal – 0728 687040
Benjuma – Naivasha & Njabini – 0720781917
Santafee Suppliers Limited -Kibwezi/Mtito – 0724041521

COAST REGION

Kioko Enterprises Malindi – 0722253096
Mombasa Tamasha – 0726127819
Tamasha Voi – 0739985007
Kizingo Beer Southcoast – 0725795962
Shiva Mombasa Ltd – 0733934711
Shan E Punjab-Diani South Coast – 0724138000

WESTERN, NYANZA & RIFT VALLEY

Ayoti Distributors – Kisumu – 0722671279
Busia Bottlers Limited – 0723772303
Kavuca Holdings – Kakamega – 0720204880
Supplies And Marketing Co. Ltd – Kisii / Migori / Homabay – 0720522611
Kericho Guest Limited – 0737 024 137
Happyland Investments Limited – Bomet & Narok – 0722908500
Cyden Enterprises – Eldoret/ Iten – 0720994705
Komoto Agencies – Eldoret – 0715683 321
Winam -Kitale Town – 0721330249
Mbig Ltd.-Bungoma – 0726400263
Mahungu Distributors – Lokichar – 0724725608
Epuruto Distributors – Lodwar – 0721916642
Crested Acres Limited – Nakuru – 0721521411
Moss – Olkalou Town – 0725513350

Most of the wines & spirits wholesalers in Nairobi city offer the best prices compared to upcountry dealers.

Then, Mwalimu Wine Agency’s and Kenya wine agencies price list seem to be somewhat on the lower side on bulk purchases.

The other wholesaler with best prices is the Jays Wines Distributors Limited Nairobi Kenya.

But don’t ignore the rest – you may be in for one or two surprises.

Keep Your Stock Balanced

Inventory is the most challenging and expensive operating cost for Wines and Spirits Shops in Kenya. Having too much product can lead to lost profits but having too little inventory can lose customers.

If you don’t have what a customer wants, you’re unlikely to get a second chance as they’ll shop elsewhere to find their favorite products. To find a perfect balance, be thoughtful about the quantity of certain products. You can use a reliable Wines and Spirits POS System to help manage stock levels.

It’s helpful to understand which products have a high-profit margin, and which don’t. Beer, for example, has a lower profit margin than wine or spirits.

Stay informed on your industry’s market trends to predict popular products. By understanding current market demand, you can begin buying more of what people want and starting promotions on less-popular options.

By understanding what is and isn’t working in your market, you can avoid under – and overstocking your business.

Know What You’re Selling & Who’s Buying

Understanding your current market and their ideal product supply requires a deep knowledge of who your customers are. After all, college students and high class estates will have vastly different product preferences and priorities when shopping.

If you’re unfamiliar with your area, it’s advisable to do a simple market research. Amend your selections, promotions, and displays to accommodate their preferences. As you get more traffic in the door, you’ll have a better understanding of whose needs you’re catering to.

As important as it is to understand your customer, it’s equally—if not more—important to know your product. Some customers will know exactly what they want before they walk in the door but others will expect your expertise and guidance while shopping.

Buy your inventory

This is going to be your biggest expense. A well-stocked liquor store will have millions in inventory sitting on the shelves. There will be a temptation to try and compete with that, but you should resist.

Tilt your initial inventory toward items which will sell quickly—the more you sell, the cheaper the cost to you—and then broaden your inventory later.

The price of alcohol is usually fixed by a distributor who has a monopoly on that particular brand (which is why the prices of alcohol are almost similar everywhere), so you’re unlikely to be able to negotiate much on the price.

Aim to Be a One Stop Shop Wines and Spirits Shops in Kenya

Consumers are accustomed to buying everything on their list in one place. As a Wines and Spirits Shop in Kenya, your customers will expect you to have (almost) everything they need for their event or party.

Stocking disposable cups and ice will save your customers a stop while increasing your revenue.

Do your research by visiting wines and spirits shops near your area and ask workers how they get supplied the products, don’t ask the owners because he may be suspicious.

But first develop a positive relationship with the workers by occasionally buying from them, once they are comfortable with you, they will tell you everything.

Furnish the Room and Stock your Business

The last step is to furnish the room and bring the stock. You need nice chairs, shelves, tables etc. Furnishing the room will cost you up to Ksh.70,000.

Retail Stocking will cost Ksh.50,000 to Ksh.200,000

There are those who prefer wholesale business, In this case you need a capital in excess of Ksh.1.5 million.

Consider Hiring an Employee

Most liquor stores aren’t the types of businesses with absentee owners. The owners of liquor stores usually work in the store full time, especially in the beginning.

Nonetheless, hiring an employee or two might help you operate more efficiently than you would otherwise be able to

It’s an open secret that Wines and Spirits shop owners can lose considerable amounts of money from liquor theft when there are no preventive measures in place. The financial loss can cripple an establishment if the theft continues undetected over time.

Dishonest shop attendants steal alcohol from the shop in various ways, such as taking alcohol from the shop, bringing in and selling their own alcohol, selling at wrong prices etc.

You can prevent employee alcohol theft at your wines and spirits shop by adopting several preventive measures.

1. Check References and Run a Background Check Before Hiring Shop Attendants: A careful investigation can reveal dishonest candidates with a history of theft and alcoholism. This is helpful in creating a staff of dependable workers unlikely to steal liquor. Proper background research can help prevent employee alcohol theft at your shop

2. Install surveillance cameras to completely monitor inside and outside the shop: Shop attendants aware of being watched are less likely to steal.

3. Tell shop attendants about the various anti-theft policies: Explain the effects of theft and why you need to prevent employee theft at your wines and spirits shop. Also discuss the actions considered alcohol theft and explain the disciplinary measures taken for such actions. Give each worker an employee guide containing this information.

4. Always verify purchase, receipt and issuing of alcohol: A dishonest shop attendant can order more than is required and ensure the disparity doesn’t appear in the records.

5. Have a Main Store and Display Counter: Ensure that new stock is first received into the main store then issued to the counter/display. Create a record-keeping system that requires the shop attendant to record every bottle of liquor removed from main storage so as to prevent employee alcohol theft at your bar.

6. Take a daily count of the alcohol inventory: You may also assign this task a different person or yourself. If a dishonest shop attendant is entrusted with this task, he can increase or decrease the count to hide theft.

7. Conduct regular spot checks at the shop to ensure the bottle count and liquor levels match sales: Undertake random stock counts to determine check if physical stock levels agree with system stock

8. Ban shop attendant from drinking during a shift or in the establishment when they are off-duty: This is a logical measure to ensure that the shop-attendant does not get tempted to drink and not pay for the alcohol at the shop.

9. Instruct shop-attendant not to allow any unauthorized person entry into the shop: Ideally, only the owner and the shop attendant should enter inside the shop.

Word-Of-Mouth Always Works!

This is definitely the oldest form of marketing and advertising used by businesses since the world began. While it may bring slower results than radio or television, it still works very well.

When a customer is happy and satisfied with a product or service, there’s a natural human tendency that they are likely to share this experience with people in their circle of trust and influence – family, friends, colleagues, neighbors and sometimes, strangers.

A satisfied customer is one of the most effective marketing and advertising tools a small business can ever have.

Satisfied customers become foot soldiers, evangelists and advocates for your business. It is amazing how many of your satisfied customers will go to great lengths to promote, convince, protect and defend your business outside.

Word-of-mouth is so effective and powerful that many successful businesses rely solely on this method to advertise and market their products and services.

So, how exactly can your liquor business grow an army of passionate customers who will use word-of-mouth advertising to your advantage?

Well, I have a couple of ideas.

Great Customer Experience

Most times, it doesn’t really matter how large or deep-pocketed your competition is. You can grow a successful business on great customer service.

People like to buy products and services from businesses that treat them with respect. People love to be given attention and treated well and will always return to enjoy that beautiful experience again.

Don’t forget, customers spend their hard-earned money on your products. Don’t you think they deserve a big “Thank you” with a wide smile on your face? People hardly forget a great customer experience and will happily tell other people about it.

Give your Customers a Reason to Advertise and Market your Business

Sometimes, word-of-mouth advertising doesn’t come automatically; you have to encourage, motivate or incentivize your customers to do it for you.

Start a referral or reward program for your existing customers. The more people they refer to you, the more free products, services and discounts they will enjoy. The reward should be large enough to trigger their interest and make them take action. It’s a win-win method that always works.

I once helped a friend of mine create a loyalty and referral program for her barbershop and beauty salon business.

The way it works is simple. All existing customers were registered and given a unique code. Whenever they spend money in the shop, it increases the total amount they have spent to date. If this total reaches a certain level, they are awarded certain discounts for all the services they pay for.

There were four levels (Bronze, Silver, Gold and Platinum) with increasing rewards. The results were amazing! Almost every customer was referring their family, friends, neighbours and total strangers to the salon to spend money under their code thereby increasing their totals and making them reach the Gold and Platinum levels faster.

That’s the power of word of mouth. Make use of it and watch your business grow.

Digital Marketing

Opening a store is a good first step, but there’s no guarantee that ‘if you build it, they will come.’ Without a solid approach to marketing, you’ll likely spend your first few months in the business working in a mostly empty store.

Digital marketing is a fast and affordable option that allows you to build a web presence and a social media following of hopefully thousands of potential customers.

With an Instagram account, Facebook, and Twitter you can generate a buzz about your business before you even open your doors.

And for more established businesses, it’s a great resource to engage with your customers and keep them informed of any special promotions or general communication that could impact them.

From social media posts to blogs, your digital marketing methods can help you build a long-lasting presence in your community.

Think of digital marketing as modern-day word-of-mouth advertising that has the potential to reach millions over a very short period of time.

Similar to any other business right now, it’s important that your Wines and Spirits Shops in Kenya has an online presence. With 81% of shoppers researching online before making a purchase, your business needs to show up in search results.

Ensure your business has a working website and that it’s optimized for search, especially for local search results. A large number of customers shop based on location, so if your business shows up as a nearby option, you’ll see a valuable increase in foot traffic.

Additionally, encourage shoppers to leave positive reviews for your business online. This will increase your credibility when you show up in search results.

By having a social media presence, you can easily connect with your customers and encourage them to leave reviews or refer others to your location.

Posting value-added content on social media can be another major business driver. For instance, if you’re trying to sell a certain brandy, posting a mouthwatering drink recipe featuring the product can help push it off the shelves.

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.

But still you don’t have to worry much about competition. Provided you’re in a busy town, there will always be drinkers!

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.

The Don’ts

The following will land you in hot soup with the government agencies..

Opening before time
Selling to kids below 18 years.
Failure to renew licenses
Selling fake liquors

If you run a Wine and Spirits business and have recently noticed that your takings have been going in the wrong direction, you need to take action sooner rather than later.

Fortunately, you can grow your wines and spirits business in Kenya in a number of ways. A combination of cost cutting and taking a long, hard look at how your business operates should help you turn things around.

Make sure any licenses you need are valid and up-to-date.

Although licensing requirements and the penalties for operating without a license vary by County, you risk losing your business and a fine if you’re caught trading illegally.

You’ll also need to make sure you’re registered for and paying any tax you’re liable for. The amount of licensing costs you’re required to pay will vary depending on where you’re trading.

Check that you’re getting the lowest wholesale prices available to you.

You may be able to greatly increase your profit margins by buying in larger amounts from an alternative supplier. It might be worth your while leasing some storage space if you can raise the capital to invest in a large amount of stock.

Wholesalers will often give a sizable discount for buying in bulk thus help you grow your wines and spirits business in Kenya.

Change your buying habits.

Study your till receipts and work out what you’re selling most of. If you find that you’re selling a lot of brandy and very little gin, expand your selection of brandy and run special offers to get your stock moving more quickly.

Offer discounts for bulk purchases.

You can do this by launching a series of “Buy one, get one half price” deals, or offer larger percentage discounts for customers buying alcohol for special events or parties. This is one of the easiest ways to grow your wines and spirits business in Kenya

Audit your running costs

Make sure you’re paying as little as possible for your utilities and communications. You also can make savings by looking closely at your staffing levels. You may find that you can make substantial savings by letting a member of staff go and putting in a few extra hours behind the till yourself.

Promote your store

If you can’t afford to buy advertising space in local media, produce fliers and posters to hand out and display in other local businesses.

You also can hire a web designer to build a website for your business and set up social media accounts to promote your store. Social media is a cost effective way to market and grow your wines and spirits business in Kenya

Undercut your competitors.

This may reduce your profit margin, but you should make up for this in volume sales. You also can get the edge over the competition by offering a more personal service. Learn about the drinks you sell, and be on hand to offer your customers advice on their purchases.

Request promotional items from distributors.

Most distributors will keep you stocked with new displays, swag, and signage. Make sure you keep it updated, because it will make your store seem fresh.

Stay on the right side of the law

Selling to underage customers, even by mistake, can cost you thousands in fines and can even put your livelihood in jeopardy. Check identification diligently, and ask local law enforcement what you can do to make sure you don’t get fooled by a fake ID.

You should also beware of criminals, as liquor stores have often been targets of criminal activity.

Final Thoughts

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.

With all this information I have provided you with, I hope you can now start a Wines and Spirits Business in Kenya.

Kenyan Blogger