Lol a friend indeed. Let is recap.

The friend sold a piece of land in a posh estate. He constructed flats earning KShs 650,000 per month. He has left over cash. He wants to spend 10% of the left over cash ie KShs 6m to enter big business.

Let is determine how much the friend is worth.

Friend gets 650k pm from rental ie 7.8m per Yr. Rents yields are approx 10%. Therefore he spent about 78m in developing the flats. 6m is 10% of leftover cash therefore left over cash is 60m.

He is 40 earning 65k net. That means he has worked for around 15 yrs. If he religiously saved 20% of his current net salary for 15 yrs he would have approx 2.4m from savings (20%*65k*12*15).

The friend is worth KShs 138m from inheritance and savings. Meaning he inherited approx KShs 135m.

Now the questions: Why would someone worth 140m be working a 65k a month job? Why does he want to invest in a hustling business?

There is no restaurant in town or anywhere for that matter that averages 40% of sales as profit. I own a few restaurants in town so i know better. First of all, a restaurant that averages 2.4 million per month in sales will put you back around 15 million just in goodwill. This guy says that he is working with 6 million. He can't get anything worthwhile in town for 6 million, maybe a hole in the wall fast food joint in a not so endearing location.

Here is the naked truth. Let's say that you have a restaurant that's doing 2.4 in monthly sales. Food costs and daily maintenance will cost you about 45% to 48% depending on the month and availability of food. 48% of 2.4 million is 1.15 or so. So you are left with 1.25. Rent in town for a place that is making 2.4 will be around 350 - 400k. That leaves you with 800k. Staff salaries are about 200k. That's 600k. Add electricity and water, that's around 150k. So that brings you down to 450k. Ongeza catering levy, VAT, NSSF and NHIF payments for employees, comes to about 250k. So you are left with 200k. Throw in another 10k for kanju and the like for good measure. That's your net profit. I know a lot of restaurant and fast food owners in the CBD and we all talk so i know what am saying. Point is, it's not easy to make a mil a month if you are operating a legit business establishment in this Kenya. You have to own 5 restaurants in town to make that mil.

The other option of owning a nightclub in Westlands is also not as luctrative as people think. Club business especially in Westlands is one of the most cutthroat business in Nairobi. My friend and business partner has two very classy joints in Westlands. I will tell you about his fiancial breakdowns for these places later.

I don't know much about petrol stations but my friend is a regional manager for Total Kenya and he tells me how Total and service station owners are always in conflict due to owners inability to buy the daily stipulated required gallons of petrol because of cash flow issues.

Bottom line is, business is not that easy but if done with a passion and zeal to succeed, it can be very rewarding.

This is true. And if you do not keep tabs on the business then its always a fight. Having said that - a medium - busy size petrol station with a shop will net arount 500-700k - alot of passion is needed to run this.

Hi Hamburglar, could you please post your contact information, I would really like to chat about doing business in Nairobi, thanks in advance!

Give me that idea i can risk going to several shylocks to get the money and pay them back immediately

Drunkard go back to that hole you came from you creeper.

Thanks for doing the math. This thread is a lie based on mere fantasies masquerading as "friends."



Business is not easy in this Nairobi at all. Though I know some people who've made absurd profit by virtue of being the first movers in a space. Then when it gets flooded things get back to normal. Please post on the realities of club business. The number one business idea the youth always have is club business, yet it's not as lucrative as one might think. It's very easy for employees to steal from you, and in the process of monitoring, you have to become a night owl and possibly a mlevi

Boss wewe ni mzito namna gani!!

Business is not easy in this Nairobi at all. Though I know some people who've made absurd profit by virtue of being the first movers in a space. Then when it gets flooded things get back to normal. Please post on the realities of club business. The number one business idea the youth always have is club business, yet it's not as lucrative as one might think. It's very easy for employees to steal from you, and in the process of monitoring, you have to become a night owl and possibly a mlevi [/quote]

Very true. There have been people who have lucked out by being the first in some location that suddenly becomes the place to be after word goes around town. But like you said, Nairobi is a city of copycats and before you are halfway into the first year with this new establishment, two or three more pop up within a 500 meter radius and you then have to share the spoils that you used to enjoy by yourself.

The other point of nightclub owners being night owls is even more accurate. My friend is nocturnal, he literally operates from 6pm onwards every single day. You can't catch him during the day unless it's really important. And yes, he is a mlevi even though he likes to say he isn't. Hehehe. You almost always have to be someone that enjoys a bottle of suds if you are in this line of business. But it's ok for him because he has always enjoyed the nightlife, some people are at their best in social places like that, talking to everybody, partying and drinking all night. That's their disposition. Ever since this guy was in the States he had always reveled in the nightlife. He was the guy who knew what event was going down where, drink specials in what club, that kind of stuff. If you wanted to find out what was kicking, you called him. So nightclub business is a natural fit for him. But for the people who like to be in bed by 9:30 pm after they've had a cup of tea or hot cocoa to keep them warm in those fluffy pajamas, those ones may want to think twice about venturing into nightclub business. Yes, you could employ a diligent manager to run your place, but that's a crapshoot. Your manager won't go all out like you the owner can. Besides, even with a manager, you still have to make plenty of appearances to make sure things are running smoothly. Whoever was talking about peace of mind, you will not find it here.