How to Start a Profitable Hardware Business with Low Capital

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The Kenyan real estate sector is growing so fast – forming fertile grounds for hardware businesses to thrive steadily.

And if you’re been keen enough, then you must have already noticed that hardware businesses are mushrooming almost everywhere in the country. 

If you start your own hardware business today, I guarantee you will soon be as rich as the current business owners.

The hardware business is so profitable yet still unavailable in some areas – leaving room for you to join the millionaire hardware owners in the business.

Before you jump into the hardware business though, poignant with hope. Ask these questions. And seek answers.

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Where exactly should you locate your business?

How much capital is enough to run a hardware business? What are the minimum requirements? Exactly how profitable is this venture?

If you get those questions answered, I am sure you would be better placed to start a hardware business.

Let us get into the discussion, shall we?

Also Read: – How to Start a Landscaping and Lawn Care Business.

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Best Location for a Hardware Business.

Construction is happening more in town than in rural areas.

That fact aside, some people from rural areas also prefer sourcing their construction materials from town and transporting home. Y

That said, you’d rather strategize on a location in urban areas or major towns.

Most of your clients are those building and renovating houses or structures.

If you can locate your hardware shop near a place where so much construction is going on, then your business would make sense.

This includes growing towns and cities which have a high demand for construction materials for use in building estates and commercial buildings.

Alternatively, you can locate your shop along busy streets and brand so well to create awareness.

Mind locating your business away from other hardware to stem competition.

Just a tip: Many people in Nairobi go to Accra Road, OTC, Gikomba area and River Road, Kangundo Road, Thika Road, Ongata Rongai, Kitengela and Mlolongo mostly for hardware materials. Use this information to decide where best to locate your business.

What’s required for a successful start-up.

  1. Conduct market research – go to the ground and know the real challenges and benefits of engaging in the business. Locate your business where there is less competition. Know the estimated capital and profit projections and so on…
  2. Identify a supplier – You don’t want to start a hardware shop and get frustrated without a reliable supplier of stock. You can get suppliers on these calibers:
    • Hardware wholesalers.
    • Specialty distributors.
  1. Acquire premises – you need a room spacious enough to stack your stock of construction materials. It also needs to be along the location considerations we mentioned above. A good room for that matter may cost you about Ksh.40,000 – Ksh.50,000 in Nairobi and cheaper elsewhere.
  2. Renovation and branding – once you have got a room, you need to work on it into the specifications you want. Metal grills and racks, shelves and counters as well as painting it as you desire. You also need to brand it well on the outside by installing signboards, neon signs and other branding activities indicative of a hardware operating there. Potential clients need to locate your shop at a glance.
  3. Acquire the necessary licenses as follows:

    • County Council Single Business Permit – Ksh.5,000 – Ksh.20,000 per year depending on your county.
    • County Council Outdoor Advertising and Signage Permit – that is for some counties who may require you to pay for outdoor marketing if you will maybe use a sign board or banner to attract clients.
    • National Environmental Management Authority (NEMA) Clearance – hardwares are noise premises at times and so you may need this.
  1. Stock the basic construction materials as follows:

    • Cement
    • Iron sheets.
    • Undercoat paints.
    • Painting brushes.
    • Nails
    • Timber
    • Tap
    • Steel Screwdrivers
    • Padlocks
    • Tiles
    • Pipes.
    • Spanners and tools.
  1. Start your hardware business. Handle clients with respect and offer quality. Maintain good customer relations and they will recommend others and always come back. Ensure you also market your business well.

How Much Capital do You Need to Start a Hardware Business?

Wondering how much it would cost you to set up a hardware business? Let us do the calculations:

  • Premises – Ksh.40,000
  • Renovation – Ksh.30,000
  • Licenses – Ksh.10,000
  • Stock – Ksh.80,000
  • Other costs – Ksh.20,000

This means that with not less thanbKsh.250,000 you will establish a small profitable hardware business. Consider plowing all your profits back to the business to make it big.

Profitability.

Buy a bag of cement at Ksh.500 and sell at Ksh.680 and that is Ksh.180 made. Buy an iron sheet at Ksh.500 and Sell at Ksh.650 and that is Ksh.150 made.

Everything is profitable here and you can expect small hardware to record a profit of Ksh.7,000 a day or more.

Bigger hardwares make more money.


*Risk warning:

The information provided does not constitute a recommendation to carry out transactions. When using this information, you are solely responsible for your decisions and assume all risks associated with the financial result of such transactions.
 

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