Hi Guys,

Is it worth it to invest in such a venture now that Muthotho controls the tap?

I was thinking about sinking 2 million KES into a nice club/bar/lounge in the Karen area, as a side business, not a primary money-maker.

1. Is that enough money to start the venture?
2. Would it make money after Muthotho?
3. What are rents like in that area? Can you recommend a better area?

I do have a person that I can trust to run and monitor it, but I will not be able to tend to it regularly- too many other things going on.

Thoughts?

Thanks all!

Best,

Hill

JH, I doubt that Sh 2m will be enough if you want to set up a lounge bar. Both Rafikiz on Langata rd and Legend on Baricho Road cost in excess of Sh 4 m to set up

Hill,

I think this could work with good research, see below an actual email of a similar venture i got myself involved in Kilimani/Kileleshwa area!

Dear xxxxx,
Thanks for your interest in partnering in running xxxxx and i hope you
come on board and that we will have a mutually beneficial business
relationship.

Here is the info you asked:
1. The annual turnover is between 8-10m
2. So far the profits have not been substantial
3. We dont have any loans
4. Staff salaries are btn 70-80k and i have a salary of 60k per month. The
salaries may fluctuate depending on the number of employees i have.
5. Future projections if we start the steak house and the other income
centres are as follows:
a. Cheeky bull steak house - Ksh. 50,000 daily or 1.5m per month.
b. Bar - Ksh 40,000 daily or 1.2m per month
c. Thufu(soup) corner - Ksh. 15,000 daily or ksh. 450,000 per month
d. Carwash - Ksh. 2,200 daily or ksh. 75,000 per month
e. Mpesa - rent out space for 10k per month
Total monthly income ksh. 3,235,000.
6. We are willing to sell a minimum of 20% shareholding for 2m. But if you
want more shares we can discuss.
I should point out that the last 2 years have been a learning process for
me because i had never ran a similar business before. I have made a few
mistakes but i think with a partner who can run the kitchen, then the
business can take of.
Let me know what you think about this asap so that i can make a decision.
I hope to hear from you soon.
Thanks,
xxxxx

- What i have learnt so far, to succeed in business in Kenya, avoid elitist theories, target the common man, you will laugh all the way to the bank (The simpler it is the better for you).
- I know the owner of Divinio and his biggest issue was "Kenyans should learn to PAY for ambience" Lesson he is not making money his target market is miniscule after investing so much esp his wine selection, but his strategy is a story for another day - this brings me to Skylux, was there to survey when was home and well hard to tell if their making money din't really see guys "spending" they seem to have attracted the wrong crowd those guys who rave in groups of 5-10 (no money there) went to the VIP area for good measure (bought the bottle of Whisky) thats what needed to get to the VIP, again din't see real spenders full of wannabees again pockets of large goups, CAVEAT this is just my obeservation on a very limited time.
- I don't know much bout Legends but had a cuppa with the guy who designed Rafikiz and he told me the interior cost inexcess of 8M, one of the partners told me there indeed they been making cash i think this was in the initial 1 year or so with this whole "Lounge" concept and flashy interior design something which was not as common in the market then however my gut says things are different now. Went to the sports bar in Karen (Nakumatt complex forget the name) first of it's kind and in my opinion the only real sports bar however they have been struggling to pull in numbers so i begin to imagine the lots of human traffic experienced in Westlands are college wannabees hence the large precence of matatus in the area and are they BIG spenders? well Jury is out!!

@Ric dees its called Blanco sports grill it has all the ambience but on the few occassion ve been there its never full and the pricing is another issue

From the above posts; i think the priority is identifying a target market; study their habits and offer them what they want.

Rafikiz is very popular and in all occassions i have been there it is usually full.

My two zim Cents reasons for its popularity is : when it was launched it became the in-thing.

everyone wanted to pass by Rafikiz at some point during the night out.

@mapozi, thanks for asking.

I'm going to build a PR and corporate communications firm, with in-house graphic design, a recording studio, and video editing suites next year. This will be a "side" business to my main computer consulting firm, to which my wife is taking the lead role in its expansion into East Africa.

The club business doesn't seem to have the return on investment that I'm looking for.

Best,

Hill

Thank you for the kinds words Mapozi. Though I know who the power players in Kenyan politics are, I try to stay completely out of it. No matter what happens or who gets elected, it doesn't affect my plans to eventually be taxpayer of the year. The Brits and Muhindis haven't been scared away; neither shall I be.

Any possible (God forbid) infighting or political unrest, in reality, doesn't affect my business plans much; it's a stain on the country's reputation for timid investors in the US, who have no idea that there are even concrete buildings in any of Africa, and of course devastating to the poor class, but to the knowledgeable, worldly businessperson, as sad and disruptive as such events may be, Kenya will always be a functioning, growing, stable business hub. That hasn't, and won't change.

And yes, my plans will always call for an all-Kenyan staff, save for a few international salespeople located in their respective markets.

Best,

Hill

My primary purpose of asking about your upscale club idea was that i wanted to connect you to a DJ friend of mine who specialises in house and rock music the kind that your would be target market really enjoys, though he also plays other types of music. Anyway all the best! I really find your advice on the various threads in wazua factual straight to the point and helpful. All the best when you expand into Kenya. We may even meet on some business front!

hope you didn't allow him to walk scot free..
bar biz is chaotic,and mututho and his cronies-nema,health and chiefs are making it the worst venture to engage in,but whoever survives these turbulent times will surely reap big

@Swenani,
Is this in the estate?Are you saying that the cops will ask for the Nacada licence failing which you then part with 500?
Did you pay goodwill?
What of the following:
Liqour Licence(Is this the same as the Nacada one?)
Business Licence(from City Hall) if in Nairobi
Health Certificate for the waiter
Music Copyright licence