You are in the right place if you need a really comprehensive guide to starting a hardware business in Kenya. It is a business field that will rarely lack customers since houses are built each and every day. A hardware refers to a shop selling construction materials, tools and equipment.

It is not easy to start one due to the fact that there are many already established hardware businesses in the country. There are many barriers to entry as most customers rely on referrals from friends. However, there is great potential that you can tap. With the right information, you can run a hardware business successfully.

The real estate sector in Kenya is rapidly growing creating a demand for house fittings and building materials hence making the hardware business a lucrative opportunity. Its safe to say, if you are thinking in this line, you’re in the right direction since there an existing gap for the products. Stocking a hardware will be determined by the size of business. Whereas a small or medium shop will have a small variation of items, a large wholesale shop has variety.

Is a hardware business profitable in Kenya?

In as much as a hardware business is profitable, one needs to plan ahead putting into consideration the factors discussed in this guide.

Additionally, you should know the different factors that make this kind of business profitable.

  1. The location of your hardware store – yes, this is key. Don’t take your business in a remote village where houses are rarely constructed.
  2. Purchasing power of customers in the area you have placed your businesses. This is given.
  3. Your pricing strategy – Kenyans like making savings in their purchases. Make sure you offer a lower or the same price as your competitors.
  4. Your management skills – if you have the business acumen or when you hire an experienced manager, then your profits will succeed
  5. Availability of competitors – when there are many competitors you will need to invest a lot in marketing or offering competitive prices and discounts. These measures may eat into your profits.

Steps to take when investing in hardware businesses in Kenya

Follow the following guide and you might be soon smiling all the way to the bank.

You can find sources of capital using the following options:

  • A small business loan
  • Selling some of your items
  • Assistance from friends and families
  • Personal savings

construction materials for a hardware business in Kenya

Once you have capital, the next thing is finding an appropriate business name and register the business

Before you can register your business, you will need a business name. Get suggestions from friends and family. A name carries a lot of weight and you want to take a lot of care when choosing yours.

Ensure you pick an original name to avoid copyright infringement.

Market research will be critical to the success of your hardware business in Kenya

While it is clear there is a ready market for hardware products, its important for you, as a business person, to conduct a market research. Having an idea on the market segmentation prepares you for the challenges ahead and how to overcome them. In addition, you identify the market gap and plan how to satisfy your clients. It also enables you to note the fast-moving goods such as cement, steel bars, roofing nails, plumbing products, iron sheets and stock more of them.

While doing your research, focus on three important aspects:

  • The costs you might incur
  • Your competition
  • Your ideal customers and what they need

Identify a strategic location for your hardware business and secure a trading license

Just like any other business, you need to settle on a location that is strategic. More construction is happening in the urban areas and major towns; even rural builders prefer sourcing products from urban areas. That means, it will make sense setting up the business where construction and renovations are being done a lot. Consider a town that is fast growing where commercial buildings are coming up and estates are being built. Such an area will have people with high purchasing power reducing the chances of making losses. If you’re in Kenya especially in Nairobi, consider places like Athi River, Kitengela, Magadi and along Kangundo road.

A license will be needed to showcase that you have a permit to conduct business.

Develop a business plan for the business

After settling on the location, you will then draft a budget for the business and find suitable suppliers. While projecting the capital expenses, stock up the fast-moving goods listed above to avoid holding down your money in dead stock. It’s also important to remember to include permit expenses in your forecasts; visit the county government estimates but generally a medium hardware shop license will cost up to Ksh 7000 while a larger one will cost to a maximum of Ksh 25,000. In addition, allocate rent expenses and set aside wages for the employees.

In your business plan, consider finding answers to the following questions:

  1. What are some of the short-term and long-term goals you have in place?
  2. How can you use your company’s assets to maximize profits?
  3. What is your advertising plan?
  4. Will you hire experienced employees or train new ones?
  5. What safety measures or equipment must your purchase?
  6. What are the ways you can manage and maintain quality control?

Next, secure reliable suppliers for your hardware business

You can then go ahead and find reliable and affordable suppliers. Such supplies can be obtained from wholesalers, secondary distributors or manufacturers. Since importing only makes sense when buying in bulk, source items from large wholesalers.

Making profits is the main aim of the business and marketing will see you surpass your target sales. As you enter the market, beware there are other hardware owners hence competition which you have to find a way of managing. For instance, find out the existing pricing of items and market discounted prices for bulk buying.

Conclusion

To conclude, an average hardware will cost you Ksh 500,000 to stock up and Ksh 100,000 for other expenses such as licenses, rent & deposit and employees’ salaries giving you approximate profits of Ksh. 10,000 per day. You’re likely to face challenges in starting up a hardware business but if you maintain good customer relations and stock fast moving goods, you will succeed.

Frequently asked questions about starting a hardware business in Kenya

Should I get insurance for my hardware store in Kenya?

You should. If you do not want to make irrecoverable losses from the various risks your business faces.

How much money should I expect to pay for insurance?

The amount of insurance premiums you pay will depend on the value of your business and what type of insurance you want to purchase.

Where can I find good suppliers for my hardware store in Kenya?

There are many online platforms that you can purchase from. You may also decide to import directly or sourcing direct from manufacturers within Kenya, such as Bamburi Cement.

What Should I Include in my first order?

These are the most common items you should stock:

  • masonry supplies
  • caulking guns
  • hand saws
  • cement mix
  • wheeled buckets (for hauling water to construction sites)
  • plumbing supplies
  • paint supplies and equipment (including paint rollers, drop cloths and brushes)
  • metal products
  • power tools (such as drills and electric saws)
  • hardware equipment (that is, things like nuts, bolts, nails and screws)
  • fasteners (like hinges and hooks)
  • Roofing sheets

What is the best way to advertise my hardware business in Kenya?

The answer to this question depends largely on the size of your business and what you want to achieve with the marketing campaign. Do you sell within your locality or do you provide shipment to the rest of the country?

Below are some tips:

  • Daily flyers supply
  • Word of mouth
  • Local newspapers and community newsletters
  • Business cards
  • Utilize  the power of various social media channels

If you have more questions, leave them in the comment section and I will surely respond.

Published by
Moroti Okemwa
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Okemwa is a graduate of Economics & Statistics from UoN. He works as a freelance writer and during his free time he watches movies, listens to music and follows politics.