Starting a Successful Hardware Business in Kenya: The Ultimate Guide

The hardware business is one of the most lucrative businesses in Kenya. The business is not only profitable but also has a high return on investment. Over the years the hardware industry has experienced tremendous growth due to the increase in construction activities in the country. From residential to commercial buildings, people are always building and looking for hardware materials. Besides the construction products, hardware stores also sell other products such as electrical, car parts, plumbing, gardening, and tools. 

While it is a lucrative business, the hardware business is very competitive and requires a lot of capital, and planning to start. However, with the right strategies, anyone can start a successful hardware business in Kenya.

In this article, we will guide you on how to start your hardware store. We will try to cover all the aspects of starting the business from the initial planning, choosing the right location, getting the right suppliers, and marketing your business.

1. Conduct Thorough Research

If you are considering starting a hardware business, the first thing you need to do is to conduct research. 

What makes the hardware business tick?

Who are your main competitors?

What products and materials are in hot demand, and how much do they cost?

Where would your store fit in best?

Answering these questions will help you avoid any nasty surprises later.

Take time to understand how the hardware business works, the market, and the competition. Identify the products that are in demand, their prices, and their suppliers. You also need to determine the location where you want to set up your business. Without understanding these factors, you may end up making a lot of mistakes that may cost you a lot of money.

We recommend that you visit other hardware stores, and try to understand how they operate, and the products that they sell. You can also talk to the owners and ask them about the business. If possible talk to the customers and ask them about the products that they buy and the prices. This will give you a better understanding of the business and help you make informed decisions.

2. Define Your Hardware Business Concept

Once you have conducted your research, define your hardware business concept. You need to decide on the type of hardware store that you want to start. 

Do you want to start a general hardware store that sells a wide range of products or specialises in a specific niche for example construction materials, electrical, plumbing, or gardening?

3. Develop a Business Plan

With the information gathered from your research take time to develop a business plan. A business plan is a document that outlines the goals, objectives, and strategies of the business. It should also outline the products that you want to sell, the target market, and the financial projections. A business plan is very important as it will help you to secure funding from investors and financial institutions. It will also help you to stay focused and organized. A business plan should be well-researched and detailed. It should also be realistic and achievable. If you don’t know how to write one, seek the services of a professional business plan writer to help you develop a business plan.

4. Choose the Right Location

The location of your hardware store is very important. You need to choose a location that is easily accessible, visible and has a lot of traffic. The location should also be near construction sites, residential areas and other hardware stores. The location should be big enough to accommodate all the products that you want to sell. Security is also a big factor. You need to choose a location that is safe and secure. The location should be affordable and within your budget to keep the cost of operating your business low.

Pro Tip: If you find it hard to find a location, consider renting a space in a location with other hardware stores. This will help you to attract customers and also reduce the cost of marketing your business.

5. Get the Right Suppliers

This is probably the most important aspect of the hardware business. You need to get the right suppliers. You need to find suppliers that are reliable, affordable, and have a good reputation. The suppliers should have a wide range of products. If possible find suppliers that can supply you with all the products that you need and deliver them on time. You can find suppliers by attending trade shows, visiting other hardware stores, and searching online. You can also talk to other business owners and ask them for recommendations. Once you have identified the suppliers, call them and ask them about their products, prices, and delivery terms. Ask the suppliers for samples so that you can test the quality of their products, especially for new products. Once you have found the right suppliers, negotiate the terms of the contract and sign an agreement.

Pro Tips:

Find suppliers that can supply your business with quality products at affordable prices. Preferably get suppliers that can give you discounts and credit terms that will even be better.

Importing can also be a good option for some products. You can import products from countries such as China, India, and Dubai. Find a good supplier online through websites such as Alibaba, and order products in bulk.

6. Get the Right Licenses and Permits

To operate your hardware business in Kenya, you need to get the right licenses and permits. First, you need to register your business and get a business permit from the county government. You also need to get a tax identification number from the Kenya Revenue Authority (KRA), a health certificate from the public health department and a fire certificate from the fire department. Some businesses also require a  permit from the National Environment Management Authority. If you want to start a construction company you need to get a permit from the National Construction Authority.

Most of these permits and licenses can be obtained from the respective government departments or online through the e-citizen portal. Make sure that you have all the necessary permits and licenses before you start your business to avoid any legal issues.

Pro Tip: Visit County Government Offices and get information about the licenses and permits needed for the type of your business. You can also get a consultant or a lawyer to help you with the process but that will cost you more money.

You can read more about the requirements for starting a business in Kenya here.

7. Building Your Brand and Marketing Strategy

Once you have secured your location, suppliers, and permits, start building your brand and marketing your business. Come up with a brandable name and a logo for your business. In addition to that, create a slogan and a captivating tagline.

Take your time to come up with marketing strategies and channels that you will use to promote your business such as social media, print media, word of mouth, and referrals. You can also use promotions, discounts, and other incentives to attract customers. You can also use loyalty programs, and other customer retention strategies to keep your customers coming back.

Pro Tip: Online marketing is a cheap and great way to promote your business when starting. You can create a website or social media pages and start posting content about your business.

8. Source Software To Manage Your Hardware

Depending on the size of your hardware business, you may need to source software to help you manage it efficiently. You need to get a point-of-sale system to manage your sales, an inventory management system to manage your stock and a customer relationship management system to manage your customers.

A supply management system may also be necessary to manage your suppliers. You may also build an e-commerce website to sell your products.

You can find software online or from software vendors. If you are not sure, get a consultant to help you choose the right software for your business.

Pro Tip: For a start, use free software and upgrade as your business grows. Excel is a cheaper option to manage your inventory/customer data and traditional receipts to manage your sales.

9. Hire the Right Staff

Your employees will be the face of your business. Once you have set up your business, you need to hire the right staff. You need to hire staff that are experienced, knowledgeable, and have good customer service skills. You need to hire staff that are honest, reliable, and hardworking. Take time to train your staff on how to handle customers, how to handle products, and how to handle money. You also need to train your staff on how to use business systems such as point of sale and how to handle emergencies and other safety procedures.

Customer support will be one of the big contributors to your business’s success. Train your staff on how to handle complaints and other customer issues.

Pro Tip: Hire multi-skilled people. You can hire staff that can handle different tasks such as sales, customer service, and inventory management. This will help you to reduce the cost of hiring staff when starting while still maintaining the efficiency of your business.

Consider hiring employees who have prior experience in the hardware business where possible.

10. Monitor and Scale Your Business

At this point, your business is up and running. You need to monitor your business and make sure that everything is running smoothly. Keep track of key performance indicators such as sales, profits, and customer satisfaction. This will help you to identify any issues and make informed decisions.

To grow your business fast you need to scale. You can open more branches, expand your product range, and enter new markets.

When possible try new marketing strategies, channels, and other business strategies.

Pro Tip: Collect data right from the start and use it to make informed decisions. This will be useful in identifying trends and new opportunities.

Keep improving and learning from any mistakes you make along the way.

Parting Shot

The above guide gives you a general idea of what it takes to start a hardware business in Kenya. There might be other factors that you need to consider depending on the location and the size of your business. Use it as a starting point and adjust it to fit your business. By doing so we believe you will be able to start and operate a successful hardware business.

Feel free to ask any questions or comment on any other factors that you think are important but have not been covered in the article. Thank you for reading. Share the article the article so that it can reach more people.

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