How To Start and Run a Successful Restaurant/Hotel Business in Kenya
Do you want to start a restaurant (Hotel) business in Kenya, but you have no idea where to start? Well, that’s why I worked on this article. Well, you see, I’ve been faced with the same challenge before. A friend approached me and asked me to pool funds together with her and start this kind of business. So, for that reason, I first delved into market research and gathered relevant information that I want to share with you in this post. Therefore, this article will take you through the ins and outs needed to start and run a successful retail shop in Kenya.
Let’s dive in!
Definitions
The Merriam-Webster Dictionary defines a restaurant as a business place where meals or refreshments may be bought.
Etymology. from French restaurant “food that restores, restaurant,” from restaurer “to restore, renew”
With that out of the way, let’s get more hands-on!
Market Research
Before you start physically implementing your restaurant business idea in Kenya, the first key step is getting your hands wet with research.
Information is crucial in any business and without this, you will likely fail in your startup.
For such a business, you may want to consider approaching different restaurant owners and getting information on how they started, the challenges they faced (both past and present) and the solutions they used.
Further, you will need to get information on market dynamics, competition and more importantly, the startup capital needed to start such a business in Kenya.
Of course, capital will vary significantly, about location and the size of the restaurant.
As you gather your data, consider approaching restaurants that are in the size that you wish yours to be. Don’t waste time approaching big restaurants and yet you want to launch a small food joint.
Apart from primary sources of data, you can also consider doing your market research from secondary sources such as this article, and other financial or statistical websites such as Statista.
Get a Business Plan
Any business needs a plan, and this is where a business plan comes in.
For starters, a business plan will help you get funding from traditional lenders such as banks, once they ascertain that your business model is feasible.
Crafting your business plan can be daunting, and therefore, you can choose to outsource this task or make a mini-business plan that will act as a guide into this entrepreneurial journey.
Now let’s talk finances.
Capital required to start a restaurant in Kenya
The most important dictator of restaurant capital is the location and rent of your restaurant. Therefore, starting a restaurant in Nairobi or any other major town or city in Kenya will be more expensive as compared to small towns, because of the rental and license fees.
However, generally speaking, starting a standard restaurant business in Kenya, will require a minimum of Ksh.500,000.
Here is what the cost breakdown will look like:
1. Rent, Equipment, Furniture & Signage
| Item | Price Range in Ksh |
| Rent | 30,000 – 100,000 |
| Kitchen Equipment | 500,000 – 300,000 |
| Furniture | 50,000 – 100,000 |
| Signage & Branding | 20,000 – 50,000 |
2. Legal Fees
According to invest.go.ke, getting licensed to run such a business in Kenya involves key steps as outlined below:
- Apply for a restaurant license
- Pay restaurant license fees
- Submit a payment receipt
- Inception of premises
- Obtain restaurant license
Here is a breakdown of licences you will probably need:
| License | Price Range in Ksh |
| Business Registration & Permit | 5,000 – 10,000 |
| Count Government license (Renewed Annually) | Variable |
| Ministry of Health license | Variable |
| Signage License | Variable |
| Music Copyright License (MCSK) | Variable |
| National Environment Management Authority (NEMA) License | Variable |
| Fire Inspection | Variable |
3. Staff Salary
Depending on the size of the restaurant you plan to launch, here is the breakdown of who to hire and the tentative salaries they will need at the end of the month.
Of course, if you are part of the staff in the restaurant, external employment for managerial roles becomes irrelevant as you are the owner and manager of the enterprise. Secondly, you may also want to step in as the cashier, as this helps you monitor sales and your staff easily.
| Position | Monthly Salary Range in Ksh |
| Manager | 50,000 – 100,000 |
| Chef | 30,000 – 60,000 |
| Waitstaff | 10,000 – 20,000 |
| Miscellaneous Staff1.0 | 10,000 – 20,000 |
1.0Not Necessary
4. Inventory and Food Supplies
| Item | Monthly Cost Range in Ksh |
| Perishable Foods | 10,000 – 15,000 |
| Non-perishable Foods | 10,000 – 20,000 |
| Drinks and Beverages | 10,000 – 20,000 |
Note that the above budget for food supplies and perishables is highly variable, and depends on many factors, including the kinds of cuisines you wish to provide your customers. With that, you should consult other enterprise owners and come up with your personalized table of expenditures.
Location
Setting up your restaurant in high-traffic areas is key to your business success.
In time, as I have surveyed such businesses, there are a few new strategies that I have noticed among new entrepreneurs. For example, some doctors or non-medical business people, choose to start restaurants outside or opposite private hospitals, thus attracting all clients seeking medical care, especially after having long waiting hours for treatment. This is called strategic planning.
While this may not be feasible for all restaurants in Kenya, you should strive to target a substantial number of clients who can afford your food and drinks.
Launching & Marketing
After following all the steps above, the next phase is to launch your business and start marketing to attract the proper clientele.
To get your feet wet in this business model, start by hiring a professional graphics designer who will design all relevant signage for your business. Utilize consistent colours so that your brand can stand out. You see, clients love to associate themselves with brands, and these brands, of course, should be offering quality delicacies and cuisines.
Further into marketing, you may need to work on billboards and other public advertising methods available near you. Of course, this depends on your budget. Billboards can be quite pricey especially if you are not starting a high-end restaurant like the “Kempinski”.
Utilizing PPC platforms such as Facebook for exposure could give you a slight edge over your competitors.
Finally, get a website where you can showcase your restaurant. If possible, start an online delivery service that targets clients who cannot visit your hotel premises.
To get started, visit Tara Host and get a domain and hosting, contact support and they will direct you as needed.
Important points to remember
As a conclusion, here are the most important points to take away from this business review:
- To start this business, you need an average low of Ksh.500,000. However, Ksh.100,000-200,000 can suffice. Some entrepreneurs may choose to invest Ksh.10 million onwards. All this depends on your finances and how far your budget can stretch.
- Starting any business requires effort and consistency.
- All businesses have an unstable starting point but eventually grow out of instability.
- Stick to hygiene, lest you risk losing your business once NEMA vets you out.
- Ensure that your cooks and other employees offer top-tier services.
- Always improve the quality of your food, and if impossible, maintain it at high standards.
Good Luck!
