Last Updated on 14 January 2022 by Gertrude
A wines and spirits business is a business that you start to sell or distribute alcoholic drinks to individuals, businesses or organisations and events.
The wines and spirits are either sold when bottled, glassed or in greater quantity, as determined by individual preferences.
Wines and spirits business can either operate online or onsite, where your customers will walk into your premises, order and pay for their drinks.
One of the greatest “start your own business” ideas you can have today is starting a wines and spirits business.
It’s no lie that alcohol is everyone’s go-to drink after a long day at work or during the holidays when they want to unwind, catch up on politics, football and daily life events.
People drink every day and alcohol sellers and producers keep cashing in.
Who doesn’t love a good beer and a good taste of wines and spirits?
If you want to make money from starting a wines and spirits business, this article is for you. Have no idea how to start?
Is a Wines and Spirits Business Profitable?
Yes. The wine and spirits business is profitable.
You can make a lot of money by selling or distributing wines and spirits to individuals, businesses or events. Kenya is a drinking nation.
There is a good customer base to start your business and grow your income potential.
You can start a wines and spirits business as a side job or as a full-time job and make extra income or earn a decent living from this business.
Still having doubts about the viability and credibility of a wines and spirits business, keep reading on.
How Do I Start a Wines and Spirits Business?
When you want to start a wines and spirits business, you have to know how you will be going through the process of building your business from scratch. Here is a quick step by step guide on how to start a wines and spirits business.
Do market research
Study your market. The first thing you should think about doing is studying the market before you start your business.
Do thorough market research and analysis and find out everything you need to know about your target customers and competitors.
Who are your target customers? What are their wine and spirits preferences?
What are they lacking in the market? What wines and spirits do they need?
Establishing this is important so that you can get what your customers need.
You also need to study the competition. Studying competition helps you understand the pricing models your competitors use and how they achieve success.
Check the necessary wines and spirits business regulations
Get your legal paperwork done. Before you start your wine and spirits business, you have to make sure that it is legitimate and in full compliance with the law.
Register your business depending on how you are starting it, as an LLC or a company, get your tax clearances and other certifications which we will talk about later in the article.
Remember alcohol is a heavily regulated beverage in Kenya so you do not want to be on the wrong side of the law.
Once your wine and spirits business is legalised, you can proceed with business operations.
Find a good location
The location makes or breaks your business. This is a crucial part of starting a wines and spirits business.
You have to be careful when you choose a place to start your wines and spirits business. Look for places with good traffic if you want more customers.
You also have to look out for the zoning laws around a wines and spirits business. Do not start a wines and spirits business near schools, libraries, hospitals or churches.
Some of the best places to start your brick and mortar wines and spirits business are in estates and urban centres. More on this later in the article.
Get the right supplier
Following on, you want to find the best supplier for your wines and spirits stock supplies. You want a supplier who is convenient, reliable and offers stock supplies within your price range.
It is even better to find a supplier who can give you discounts per unit item that you are purchasing from them.
Your supplier should ensure a steady flow of supplies and timely delivery of said supplies, otherwise your wines and spirits business will be hanging on a thread when people realise that they cannot get what they need.
There are many wine and spirits distributors in Kenya, starting with EABL.
Market your wines and spirits business
You have to put yourself and your wines and spirits business out there so that you may have customers and more people coming into your wines and spirits business.
You do not want to buy your wines and spirits inventory and have them sit idly in your bar without anyone seeking to try them out.
Once you get your first customers and have a positive income flow, your business will grow substantially.
What Will I Do With a Wines and Spirits Business?
There are certain things that you will be doing on any typical day in your wines and spirits business.
It is good to know what you will be handling so that you do not fall short in your business activities.
- Selling wines and spirits to your customers
- Giving advice of specific wines and spirits based on an individual’s or event needs
- Maintaining a good relationship with staff and customers
- Predicting product demand
- Stocking up your shelves with wines and spirits for business
- Making sure that your customers are satisfied and that they get what they want.
- Making sure you have the right wines and spirits inventory
- Protecting cash flows
What Do I Need to Start a Wines and Spirits Business?
This is what you need to start a wines and spirits business.
- Wines and spirits inventory
- Chairs and tables
- TV and music system. DSTV
- Wine and spirits display counter
- Crockery, e.g glasses and jugs
- Business license
- Business insurance
What are the Expenses for Starting a Wines and Spirits Business?
It is very important that you know the initial startup costs and the ongoing expenses that you will incur when you start a wines and spirits business. You do not want to end up falling short in your budget.
- Cost of wines and spirits inventory
- Rent expenses. You can also factor in building renovations here when you are opening a storefront wines and spirits business.
- Staffing expenses if you have any employees
- Licensing fees for your business permits and clearance certificates
- Utility bills e.g electricity, water
- Insurance premiums
- Marketing expenses depending on the advertising method you have chosen.
How Much Does It Cost to Start a Wines and Spirits Business?
The amount of money it will cost you to start your wines and spirits business will depend on whether you are going to operate your business online or open a storefront bar.
When you are opening a bar for your wines and spirits business, it will cost you roughly Ksh. 550,000 or up to 10M to get your business off the ground.
This should cover all the inventory, legal fees, physical space as well as all the marketing expenses that you will need to start a wines and spirits business.
When you are planning on starting a small scale wines and spirits business, you will need less capital.
How Do I Make Money With a Wines and Spirits Business?
You earn money on a wines and spirits business by selling the alcoholic drinks available.
You will be earning per the price of the item sold.
You can sell your wines and spirits by the bottle, glass or in greater quantity (at a higher price) as determined by your customers and your distributors
How Much Should I Charge My Customers?
When you are charging your customers, you must always strive to be fair to them and still make your business profitable. The amount of money you charge your customers will depend on the following factors:
- Competition. Look at the pricing model of your competitors so that you make sure you are not overpricing or under pricing your wines and spirits. Make your pricing competitive, fair and profitable.
- Distributor prices. The prices for which you get your stock supplies from your distributors will determine the amount of money you charge your customers. If it is too pricey, then you will charge more.
- Type of alcohol. Different types of wines and spirits will cost a certain amount, depending on the brand. A well known luxury brand will cost more than regular ones.
- Location. When you locate your business in places where there are high end with high financial activities, you may want to charge your customers more.
How Much Money Can I Make With a Wines and Spirits Business?
The amount of money you make with a wines and spirits business will depend on the location of your business, its size and your marketing efforts that result in sales.
Legal Requirements for Starting a Wines and Spirits Business
When you are starting your wines and spirits business, you have to make sure you are in full compliance with the law so that you will not end up paying heavy fines or get your business shut down.
Understand that the wines and spirits business is heavily regulated especially if you are in Kenya.
You have to be extremely cautious to understand the zoning laws, health regulations and licenses put in place for your wines and spirits business.
These are the necessary permits and licenses you need to start a wines and spirits business.
- Liquor licenses. An application for a liquor license in Kenya is around Ksh 6,000. The license itself will cost you Ksh. 50,000 which is valid for one year.
- Business permit. You will need an annual business permit so you can check with your county government.
- Public health certificate will be issued at a fee of Ksh. 6,000
- Fire safety certificate to be issued at Ksh. 5,000
- NEMA to charge you Ksh. 2,500
- MCSK which will be issued at Ksh.10,000
You can do all these applications and payments online.
You do not have to walk from one government office to fill out these applications.
What are the Best Locations for a Wines and Spirits?
When you want to open a storefront Wines and Spirits business, you have to understand what makes a location a great location and also secure these locations.
Like I said earlier, location will either make or break your business.
There are certain things you need to consider when you are setting up your wines and spirits business in a given location. Here they are:
- Foot traffic. Start your physical wines and spirits business in places that have high foot traffic so that you will increase the chances of people walking by into your wines and spirits bar to get something to drink.
- Accessibility. Make sure your wines and spirits business is in places that are visible and accessible by the main road or highways.
- Location type. Start your wines and spirits business in high end places where people are ready and willing to buy your wines and spirits for a profit. Zoning should be your big concern for your wines and spirits business.
- Crime rate. Start a wines and spirits business in places that you have established have high security. You want to avoid theft, vandalism and your customers from being attacked when they are on their way back home.
- Local laws. Make sure that the place you choose to build your physical wines and spirits business is free from all government zoning laws so that you do not risk having your business shut down.
- Competition. When you are looking at the competition, you do not want to start your business in places that are already crowded with other wines and spirits businesses. If you do, make your business unique and outstanding.
The best places to start your Wines and Spirits business are in estates in urban centres.
NOTE: You can not start your wines and spirits business near schools, hospitals, libraries or churches. Always check for the zoning laws.
What Skills Do I Need to Start a Wines and Spirits Business?
There are some skills and qualities that you need to have to start a wines and spirits business. Successful wines and spirits business owners usually have these traits and skills.
- Interpersonal skills. If you are operating an open bar to sell your wines and spirits, you have to have good customer relations and connect with your market. This will build good rapport and meaningful relationships in the long term.
- Customer service. Practice good customer service. Make sure your customers get the best experience from your business. Provide what they want and need. This will encourage them to come back.
- Attention to detail. Pay close attention to how your customers respond to a particular alcoholic drink so that you know what you should stock up on more the next time you bring in wines and spirits supplies
- Commercial awareness. You should have good business acumen if you want to keep up with the trends and your competitors in this wines and spirits business.
- Marketing skills. Employ good marketing strategies to promote yourself and your business. You should have both online and offline marketing skills if you want to reach a wide target audience.
- Accounting skills. Bookkeeping is an important skill for any wine and spirits business owner. You must know how you can record your stock and the pr9ces for each so that you may budget properly for your operational costs.
Who are My Customers and How Do I Attract Them?
Your customers are likely people who are over the age of 18 (in Kenya) who wouldn’t mind enjoying a tasty alcoholic beverage from your business. Here is how you will attract them.
- Use proper signage/billboards. This is the fastest way to attract customers into your businesses. If you have good signage in your bar, you will influence many people to walk in for a drink. This will generate new leads.
- Use social media. Use the connections you have built online to showcase your wines and spirits business . Go to Facebook, Instagram or Twitter and have your business advertisements set up so that people will contact you and visit your bar.
- Create a website. Your website should have good content of your wines and spirits offerings and you should optimise it so that it appears on top of the lists when someone searches for it on Google. This is very important especially if you are running an online wines and spirits business.
- Word of mouth. Be the best wines and spirits business everyone knows about and within no time, people will start visiting your bar. You will generate more leads this way.
- Advertise on local papers, TV and radio ads. Go to the press and have them publish or print your business in the daily local newspaper or have them run an advertisement on TV about your business.
How Do I Promote My Wines and Spirits Business?
If you want to market your wines and spirits business, put yourself out there and create more leads, consider doing this.
Bring in quality wines and spirits and offer the best customer service and build your brand through that. It is easier to get more clients this way.
When people can acknowledge how great your services are, they will most definitely tell people who you are and how they can get in touch with you for your services.
Ask for referrals and testimonials to get more clients.
Go online and showcase your wines and spirits inventory. Create a blog and market your business. Take time to optimise your website for SEO and also build content.
Your website will create a first impression on your customers and this will determine if they seek your business or not.
Leverage the connections you have on social media and use that to talk about your wines and spirits business on Facebook, Instagram or Twitter.
Share relevant content and create promotions and advertisements to create more sales and leads.
Business Listings and Directories
Make your wines and spirits business available on sites such as Google or Yelp so that people can come online and search for your business easily.
Create a business profile, showcase your projects and ask for customer reviews if you want to make it to these directories.
Connect with industry experts and participate in local and community events and meet new people. You will get more clients and leads in this way.
Advantages of Starting a Wines and Spirits Business
These are some of the benefits of starting a wines and spirits business.
- More sales. Kenyans live drinking. This means that you will always have customers for your wines and spirits business. More customers means more sales, which in turn means more profit.
- High profit margins. A wines and spirits business is very lucrative and has high profit margins. From a sale of one bottle of wine or beer, you can make around Ksh. 500 or more. The profit margins are really this high.
- Networking. When you connect with other experts in your business, you get to learn from them and create more leads this way.
- Meaningful relationships. If you establish good customer relations, you will form meaningful relationships with people from all walks of life.
- Rewarding work. A wines and spirits business will give you an overall high return on investment, provided you do your due diligence in ensuring the operational activities are in full effect.
Disadvantages of Starting a Wines and Spirits Business
These are the problems and challenges you will face when you start a wines and spirits business.
- Strict government regulations. I will say it again: alcohol is heavily regulated. You will have to pay a lot of money for businesses and licenses if you do not want your business to shut down or pay heavy fines.
- Question of morality. Depending on your religion, you may want to steer away from this business because alcohol is often related to immorality.
- Operating hours. The operating hours of a wines and spirits business may not be suitable for you to have more sales. For example, on the weekdays you are allowed to open from 6.00 p.m to 11.00 p.m and from 2.00 p.m to 11.00 p.m on the weekends.
- Accidents. Fights may break out in your bar so you have to make sure that your customers are well behaved and only have a limited number of drinks for their own safety.
Mistakes to Avoid When Starting a Wines and Spirits Business
There are some problems that you may encounter daily in your wines and spirits business.
It is good to know what these problems are so that you find a way to work around them so that your business may run well.
Always bear in mind the business regulations so that you do not fall on the government’s hot soup.
Here are some of the mistakes you must avoid when you start your wines and spirits business.
- Do not start operations before time. Do not do this. You will be forced to pay heavy fines or have your business shut down once the local authorities catch wind of this behaviour.
- Do not sell fake liquors. Selling fake liquors can be harmful to your customer’s health. You do not want your customers dying on you or face a time in prison for selling fake liquor. Always use a trusted distributor for your wines and spirits supplies.
- Renew your licenses. Failure to renew your licenses will place you on the wrong side of the law. Again, you want to avoid your business being shut down or paying heavy fines.
- Avoid selling to kids below 18 years of age. Do not sell alcohol to children. It is not right. You will be jailed if you do this.
How to Run a Successful Wines and Spirits Business
You want to start and run a Wines and Spirits business that is fully functional and operational. This is how you can run a successful wines and spirits business.
- Good location. Location is very important if you want to run a successful wines and spirits business. Make sure you consider the factors we talked about earlier in the article if you want to see good results.
- Government rules and regulations. Get your legalities right so that you may run your wines and spirits business without any temporary or permanent interference from the law.
- Know what your market wants. Always understand customer needs so that you may provide what is necessary and stock on the right items.
- Customer service. Good customer service is important in any business. This will determine whether your customers visit your premises or not. When your customers are satisfied with your business, they will come back.
- Always stock up. Make sure that your wines and spirits display counter is stocked up with supplies. If your customers walk into your bar and find out that they cannot get a drink, they won’t come back.
How Do I Make My Wines and Spirits Business Profitable?
Everyone starts a business to make a profit. When you are starting your wines and spirits business, you want to make more money than what you spend to keep your business running.
In order to make more money, you have to make more sales. I will give you some tips and advice on how you can make your wines and spirits business as profitable.
Here are some ways to make your wines and spirits business as profitable as you can.
- Attach a restaurant to your bar. A restaurant is a good income stream to supplement a wines and spirits business. You can sell nyama choma, steak,rotisserie chicken and other delicacies that go well with wines and spirits.
- Offer classes on wines and spirits and related products. You can offer mixology classes to aspiring mixologists and make extra income in this way.
- Sell complementary items. You can sell additional items alongside wines and spirits, for example nuts, crackers, cheese, etc. and make some extra money.
- Cocktail sampling. You can organise cocktail sampling sessions for customers where they will pay an entrance fee and therefore you make money in this way.
- Start a wines and spirits club. You can start a wines and spirits club where interested people will meet up to catch a beer or two and talk about interesting topics.
- Stream football shows. You can install DSTV in your bar and have your customers pay Ksh. 50 to watch their favorite teams play, if they are not having a drink.
Creative Name Ideas for a Wines and Spirits
When you are starting a wines and spirits business, you have to keep in mind that you won’t be the only wines and spirits business available.
You have to start a unique wines and spirits business if you want to distinguish your business from your competitors. One of the best ways to do this is to create a brand with your business name.
When you are starting your wines and spirits business, you have to choose a very unique business name that is catchy and memorable. A good business name meets these characteristics.
- It should be memorable. When you are choosing a name for your wines and spirits business, make it memorable so that customers can easily remember when they walk by your business.
- Make it brandable. Your business name should be able to fit on your other business merchandise like capes, cups and T-shirts.
- It should be simple. Keep your wines and spirits business name short and simple if you want your business to be memorable.
You can use a name generator for your wines and spirits business. Some of the best wines and spirits business name ideas include.
- Red Before Bed
- The Wine Cabinet
- Epic Wine Bar
- Wine & Dine Spirits
- Best Spirits
- Wine Bar
- Wines and Spirits
FAQs on How to Start a Wines and Spirits Business in Kenya
How much does it cost to start a wines and spirits business in Kenya?
It costs 5million-10m or more to start a wines and spirits business. You will need inventory, equipment, staffing, shelving, good wines and spirits selection and legal requirements.
Why are liquor stores the best?
Liquor stores are the best because they’re recession-proof, drinks have long shelf lives, the demand for wine and spirits isn’t seasonal and you can stock different brands of wines and spirits.
Are wine stores profitable?
Yes, wines and spirits are profitable because they are recession-proof.
How much does a liquor store owner earn?
Liquor store owners earnings depend on the type of store whether it’s one roof or standard liquor store, your inventory suppliers, clientele, overhead costs and whether you get cheaper alcohol or high-end alcohol.
The wines and spirits business is a thriving industry and despite the competition, there are many wines and spirits businesses mushrooming everywhere.
With the high-profit margins involved, it is estimated that the wine and spirits business will keep on growing substantially over the years.
There is a large capital share for wines and spirits business owners.
Do you want to start a wines and spirits business?
The competition isn’t high enough in the wines and spirits business.