kerosene business plan in kenya

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How to start a petrol station business in Kenya.

Starting a petrol station business in Kenya, or any country is highly capital intensive but very profitable in the long run. By capital intensive, we’re talking about an initial cost of over Kshs. 8 Million to set up and run a fully operational petrol station. There are a lot of factors to put under consideration before venturing into the petrol station business in Kenya. An ideal business plan needs to be formulated before anything else. Some of the factors to consider in the business plan include;

• Fuel suppliers
• Petrol station business setup
• Pieces of equipment for the Station
• Insurance cover(s)
• Fuel prices
• Revenues and marketing
• Employee workforce
• Vehicle services
• Competition from other stations

The list is long, however, these are some of the few major factors one ought to factor in before investing rightly so into the business.

Land plays an important role, in determining how much profits one will earn from the business.

It is important to buy/rent/lease land for the sole purpose of constructing a petrol station. However, buying the land is the better option as the fuel proceeds will translate to higher marginal profits in the long run.

It is important to note that for a petrol station business to flourish, it has to be near the main road or a junction where it can serve many motorists. This is the geographical aspect to consider in establishing a petrol station.

The land’s topography should also be looked at. One cannot set up a petrol station business with the land sloping. The land has to be flat. Consider the underground fuel tank that has to be put in place. The storage tanks are buried underground and their sizes determine how many thousands of liters of fuel can be stored, and how many different grades of fuel, whether petrol, diesel and/or kerosene.

Once the land has been identified and all legal relevant paperwork obtained showing land ownership then comes the financial planning part. In Kenya, the cost of establishing a petrol station ranges between Kshs. 8M to Kshs. 15M. One constructs a petrol station according to their preference and how they deem fit appearance-wise but it has to meet certain set standards otherwise the business venture will fail. Other than the petrol station, one could establish a side business such as a building with numerous shops, a shopping avenue such as a mini-mall, or an eatery, like most petrol stations do so in Kenya.

For one to legally operate a fuel station in any country, they must have all the necessary business permits from various organizations and agencies, fuel and government-related of course.

The business will be deemed as registered if there is a business permit, a fire permit license and a health permit license. A business permit in Kenya costs Kshs. 15,000 depending on the nature of the business. When applying for a business permit in Kenya, it is important to take note of the following required documents;

• A registered business name
• The physical address of the business
• A copy of the certificate of incorporation
• A copy of National ID/ Passport/ Alien ID
• Business ID number
• An inspection document by the ward licensing officer determines the licensing fee.

A fire permit costs Kshs. 5,000 to obtain.

• Petrol Station Business setup

The appearance of the petrol station is very important in luring motorists to one’s station. Proper planning and construction are important. Laying down bricks on the ground rather than leaving the bare soil exposed always has a psychological impact on the driving motorists. Lighting is also a factor to consider as the petrol station needs to be well-lit, especially during the night.

The number of fuel pumping stations is important too but more fuel pumps mean more capital invested.

As mentioned earlier, aside from the petrol station business, it is also a very good idea to construct a building which can be rented/leased out as this helps improve the businesses profits, not just depending on the petrol station alone.

10 things nobody will tell you when you’re starting a business (biznakenya.com)

• Equipment for the petrol station.

The pumping machines in a petrol station are quite expensive. There are several types of fuel dispensers on the market however the recommended dispensers are;

• Intelligent Multi-media fuel dispenser
• CS20 Series Fuel Dispenser
• T Man Series Fuel Dispenser
• Marve Series Fuel Dispenser
• Pioneer Series Fuel Dispenser
• CS46-Legend Fuel Dispenser
• CS46-Classic Series Fuel Dispenser
• CS42-Legend Fuel Dispenser.
• X-Man Series Fuel Dispenser
• RT-HY224 Fuel Dispenser with LED

The fuel pump prices are different depending on the types of fuel they pump;

Duo Nozzle – Kshs. 480,000 and above per unit

Single Nozzle – Kshs. 270,000 and above per unit

Twin Nozzle (Both Petrol and Diesel) – Kshs. 480,000 and above per unit

Take note that an underground tank is important to construct before laying the foundation for the petrol station.

How the pumps work

The fuel dispensers defy gravity to pump fuel that is underground with the dispenser being above ground. The gas pumps have a motor/ impeller inside the dispenser which forces the fuel upwards from the underground tank and into your vehicle.

After the construction of the station, it is vital to reach out to at least three different fuel suppliers who shall be restocking your petrol station with fuel when the underground tank starts to run dry. However, it is also important to get into business with trusted and reputable fuel suppliers who will supply the correct quantity and quality, according to how much comes from your pocket. Be wary of some suppliers who mix fuel/ supply low amounts/poor quality fuel all for malicious gains.

• Obtain Insurance cover.

Insurance is very important in case a lethal crisis befalls your petrol station premises. One should choose a policy in which the risk of the policy occurring is potentially high as compared to other risk policies. Fire cover is mandatory as well as an accident cover. There is a total cover package called Petrol Station insurance/ forecourt insurance/ fuel station cover/ petroleum retail and convenience insurance/ filling station insurance. This covers all the risks associated with the petrol station be it fire, accidents, injuries while at the station, etc.

After establishing the business, one can begin marketing the petrol station. The best way to market oil currently in Kenya is by giving promotions and offers such as discounts. This is sure to get more customers after the spike in fuel prices with the subsidy struggling to keep the prices low. Other marketing options include social media advertising.

The business will do well provided that the station provides quality fuel and good services hence an increase in revenue. On average, a mini-petrol station that operates daily with frequent customers can earn an annual profit of about Kshs. 9,000,000.

The petrol station attendants working at a petrol station have a great influence on how the business will succeed. There must always be employees on standby near the fuel pumps waiting for vehicles to arrive and fuel in the station. Otherwise, motorists may assume that there is no fuel in the station and the place is deserted.

The attendants also have to be courteous and respectful to the motorists. They ought to learn how to serve customers well, as this not only builds a good reputation for the petrol station but it also increases the numbers of new customers and loyal customers.

They should avoid trouble with motorists as this will not only drive customers away, but they may also end up losing their jobs in the long run. Attendants can show their value to the customers by offering to check accessories in the vehicle’s hood such as the engine oil, coolant and the transmission fluid and wiping clean the windshields

Other vehicle services that are optional to have in the petrol station premises are car servicing, wheel alignment and a Tire center. These days, it is very common to find that most petrol stations have air pressure for the wheels and in the spirit of competition, it would be good to have one.

Final Thoughts

Is a petrol station a good business to invest in? Yes, it is. Think about the number of motorists on the road daily; they need fuel for their car engines to travel and they get their fuel from somewhere. With strategic planning, a petrol station can very easily make one a multi-millionaire.

Due to the high initial capital required to set up the petrol station, it is best to explore all avenues that will help finish constructing the station to meet customer expected standards and be competitive, the best being having few shareholders in the business.

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Plot for sale in Bungoma town. Suitable for a petrol station. On the main dual carriageway.

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How to Start a Petrol Station Business in Kenya

Fuel business is very lucrative since it has high profit margins

Petrol stations are establishments that sell petroleum fuels like diesel, motor spirit (premium petrol), and regular petrol to vehicle owners. These facilities may also deal in other engine lubricants, kerosene, and cooking gas sold to customers.

Depending on its size, petrol station may also have additional car-related services like oil checks, repairs, air for tyres, plus minimum to full car service.

Available statistics from a report tabled in Parliament in early 2022 by the Ministry of Energy indicate that there are slightly over 4,000 registered fueling stations in Kenya, with a majority (324) located within Kenya’s capital Nairobi.

Also, another set of data from the Energy and Petroleum Regulatory Authority (EPRA) for the financial year that ended June 2022 denoted a 10.92% increase in the quantum of petroleum products imported into the country through the Open Tender System (OTS) to 5,539,884 cubic meters compared to 4,994,577 cubic meters sourced over the same period in the financial year ended 2020/2021.

These data sets allude that petrol stations are a great business because the demand for fuel in Kenya is constantly growing; if you are keen to start a petrol station in Kenya but uncertain about how to get started, this is a step-by-step guide on how to kickstart your dream to a reality by offering the concepts behind this lucrative business.

How to open a petrol station

Just like any other enterprise, the petrol station business in Kenya needs flexible and good planning to set yourself on the path to success as an entrepreneur.

According to businessman Jacob Simiyu of Jadedo Investments, which vends fuel along Eldoret – Iten Road at Sinai, proper organizational skills are essential for the long-term survival of the fuel business.

From his interview with this writer, here is how to start a petrol station business in Kenya:

• Think out your petrol station business plan

As an aspiring business owner, having a detailed or well-written business plan will help you validate your idea as it communicates a strategic plan for your business by identifying potential problems and opportunities.

Simiyu says that a business plan is a critical modelling tool for any new business creation as it enables one to gain insights, especially as it projects possible competitors and analyzes the concepts of supply and demand.

“Before starting a petrol station business anywhere in Kenya, it is important to map out how your business will operate. You will know possible customers and the right location to put your facility. Ask yourself; are there big oil companies around where you want to set up your business? It will come in handy when tackling issues of competition. However, competition brings about the urge to do better in business, boosting its efficiency,” he stated.

He added that at this stage, an entrepreneur learns about the right location with a comprehensive trade network for the petrol station business. He hinted that the best location is along major highways, cities, and town suburbs because of affordable rent prices.

• Notify the respective county government

When your business plan is ready and set to start the petrol station business in Kenya, visit the county government wherein the prospective fueling station sits to obtain construction approval from relevant authorities.

This process is absolutely free, and at the county government offices, you are supposed to check in with the fire department for business location risk assessment alongside the National Environment Management Authority of Kenya (NEMA) to obtain an Environmental Impact Assessment (EIA), which sifts the environmental impact of your project.

Here are the requirements for the construction of a petrol station in Kenya:

* Applicants’ company registration certificates for developing firms

* Copies of applicants’ national ID

* Proof of land ownership of legitimate lease agreement

* Valid EIA license from environmental authority NEMA

* Permit to construct auxiliary lanes from relevant authorities like Kenya National Highways Authority (KeNHA) or Kenya Urban Roads Authority (KURA)

* Permission to undertake construction from County Physical Planning Office

* Detailed construction drawings of petrol station design from certified engineers

A review of your application to construct a petrol station in Kenya takes approximately 45 days or less, after which you may begin its construction.

• Build your petrol station

After gathering the required certifications and receiving a go-ahead to start your petrol station in Kenya from the county government, it is time to zero in on its construction in the desired place with customer convenience.

A standard petrol filling station has storage tanks, digital dispensing pumps, wash and service bays, air and water dispensing fittings, lubrication equipment, and other mechanic vices. All of these are expensive to acquire.

For instance, according to petrol vendor , it costs between Ksh300,000 to Ksh700,000 to put up 20,000-litre underground storage tanks that conform with minimum standards set by EPRA, Ksh20,000 for single piping, Ksh580,000 to purchase double fuel dispensers with breakaway valve or a price of Ksh320,000 for single fuel dispenser, all with piston meters and encoders to track fuel output.

Also, petrol business hopefuls have got to pay around Ksh5,000 to Ksh10,000 for fuel pump installation costs. With a viable startup capital, building a petrol station takes approximately one month before becoming fully operational.

Capital investments should also include around Ksh3 million for sourcing petroleum from oil marketing companies. One should also pay for a single business permit that goes for around Ksh10,000 to Ksh50,000, depending on the county’s set trade laws, and Ksh5,000 for a fire permit.

The average cost of starting a petrol station business in Kenya is approximately Ksh5 million to Ksh8 million, inclusive of fuelling station equipment, construction materials, and labor. However, this figure may be higher or lower depending on the size of the petrol station and whether the land on which it’s constructed is personal or leased.

Biggest Oil Marketing Companies in Kenya 2023

To determine the biggest Oil Marketing Companies (OMS) in Kenya, we used data from Biannual Energy and Petroleum Statistics Report for the financial year 2022/2023, which provides information on the top companies that trade petroleum products; diesel, petrol, kerosene, and LPG in terms of market share.

Here are the top 10 oil marketing companies in Kenya:

Bottom Line

Is the petrol station business profitable in Kenya? Yes, the fuel business can be very lucrative for risk-takers since it has high average profitability. However, the margin of profit can be impacted by fluctuating international prices, the degree of competition, and the strength of demand.

Next >> Working Ideas On Running a Profitable Butchery Business

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Awesome, i do really access the good bussiness ideas, towards my intentions, there’s no need to seek/attend for enterprenurial institutions to access the adequate knowledge concern about this!!!!!!

WHAT ABOUT IF I JUST WANT A SIMPLE FUEL STATION

Insightful.

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Start a Small Kerosene Supply Joint and Grow It Into a Mini-Petrol Station

September 26, 2016 Published by: James Keru -->

The idea of setting up a small kerosene supply shop where you can sell this commodity in small quantities is an age-old gem that never disappoints. With over 70% of Kenyans directly relying on kerosene for power it turns out that this is a potential launching pad for futuristic entrepreneurs who would like to venture into the lucrative oil distribution business. We discuss what you need to do in order to get started.

Mini Petrol Station Business Ideas in Kenya

Identify a good location.

This is where you will need to use your genius mind as you will want to find a location that offers your maximum chances of growth. If you live in the slum areas or estates, an ideal location would be one near a main road in a place with significant foot traffic. If you live in the rural areas, then a place located by the roadside or near a busy junction would be the perfect spot to set up shop. The room you choose to setup your business should be:

• Well-ventilated
• With a wide frontage

You don’t have to spend a lot of money decorating the room. A simple paint-job and branding with a clear “Buy Kerosene Here” labeling would be good enough.

Set-up the Dispensing System

Photo showing an oil drum being used to dispense kerosene.

If you are starting on a tight budget then the cheapest way out is to invest in a metallic tank with a tap on one end. Whenever customers come to buy kerosene, you will simply turn on the tap and dispense the required amounts. For instance, you can price your fuel as follows:

You don’t always have to start that small though…you can buy a fully-fledged dispensing pump from local distributors. This will simplify your job, minimize wastage and best of all allow customers to purchase fuel from as low as Ksh5.

Instead of the metallic tank, you can invest in an above-ground or under-ground tank so you can acquire larger quantities of kerosene from distributors. By leveraging on such economies of scale, you will be able to reap more profit per sale.

Getting Licensed

There are no major license requirements for running a small kerosene outlet. The only license required to start is the Single Business Permit which is issued by the County Government. Those in Nairobi County may also be required to acquire a fire clearance certificate. Generally to be in good books with the authorities you may want to take the following precautions:

• Ensure your fuel outlet is not near a public institution
• Ensure you have fire extinguishers in place
• Ensure your infrastructure is well constructed in a way that doesn’t pose danger to the public

Please note that if you are intending to open a fully-fledged filling station that sells petrol and diesel you will have to get a certificate from ERC and NEMA to operate.

Where to Buy Your Stock

For starters, you can be buying for kerosene stock from your nearest petrol station (particularly if you are buying anything less than 1,000 litres). But as you expand you can be buying from wholesale distributors at a cheaper price. Examples of local kerosene distributors who offer considerable prices when you order 1000 litre and above include KK Kerosene, Mwarabu just to mention a few.

Getting Into the Business

Now that you have a shop, dispensing tank, necessary licenses and of course your starting stock of kerosene you are good to go. Ohhhh…and before I forget you will need a funnel, plastic bucket and a few mtungis (Jerry cans). Your starting budget will look something like this:

Note: Cost of modern dispensing pump is Ksh150,000 or thereabout. It’s not a must you start with that pump because the metallic tank can serve the purpose.

Note 2: Price of kerosene per litre may vary from time to time and place to place. For purposes of this article we used Ksh59.1 which is the recommended retail price for kerosene in Nairobi.

The Returns

From our research, a small kerosene outlet in a place like Kibera sells an average of 30 litres of fuel per day. A 200 litre opening stock usually translates into Ksh26,600 worth of sales revenue. If we deduct that from the cost of buying the 200 litres from distributors then we remain with Ksh14,600 profit per week or roughly Ksh2,000 per day.

How did we arrive at that? Well, we used the price of a 300ml bottle of fuel which is Ksh40 in some parts of the country. That means a litre is retailed at Ksh133 and therefore a 200 litre tank brings you to Ksh26,600. 26,600 (Sales) – 12,000 (Cost of buying 200 litres) = Ksh14,600. Why 1 week? Because going by the average of 30 litres per day then 200 litres can only last you that much. Of course, the prices and conditions may vary from one place to another and these figures are only meant to give you a rough idea of how this business is done.

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How to Start a Kerosene Retail & Supply Company – Sample Business Plan Template

By: Author Tony Martins Ajaero

Home » Business ideas » Oil & Gas Industry

Do you want to do business in the oil and gas industry? Are you interested in starting a kerosene supply and retail business? Then below is a sample kerosene retail / supply business plan template . Because it is used in virtually every home in Nigeria, kerosene is one of the fastest selling petroleum products in the country. And the story is the same in most other developing countries with erratic power supply.

In many third-world countries, kerosene ( DPK or Dual Purpose Kerosene ) is used extensively in both rural and urban areas for domestic purposes such as cooking, lighting kerosene-powered lanterns, and burning refuse. This explains why it fetches huge profits for oil and gas entrepreneurs in Nigeria and beyond.

Kerosene supply is a very lucrative business that can make you a millionaire within a couple of months; provided you run the business in Nigeria or in another country with similarly huge demand for the commodity. In fact, some entrepreneurs in these countries revealed that they realized all of their capital after the first 2 to 3 sales! Yes, the business is that lucrative.

If you have some cash lying fallow in your account and begging to be used for something worthwhile, why not multiply it exponentially by investing it in the kerosene supply business? Doing that would certainly be one of the business moves you will ever make. Now are you still wondering what makes the kerosene supply business very lucrative ?

Well, as stated earlier, there is huge demand for the product in countries such as Nigeria, where over 10 million liters of kerosene is used up daily. But there are certain reasons for this huge demand:

3 Reasons why you should start a Kerosene retail business

• Firstly, Nigeria (and other countries where kerosene is in huge demand) lacks stable electric power supply. And this explains why most people depend heavily on kerosene for cooking and other domestic purposes.
• Secondly, Nigeria has a large population, comprising majorly of low income earners who buy kerosene because they simply cannot afford costlier energy sources. So, the market for kerosene in Nigeria (and many other countries in Africa) is very large.
• Thirdly, the profit margin for kerosene is quite mouth-watering. You could buy the commodity at the rate of N50 ($0.3) per liter and sell at N100+ ($0.6) per liter. That’s 100% profit! Sometimes, you get more; sometimes, less.

Having discussed the profitability of the kerosene supply business, let me now explain how to start the business. If you are looking to start this business, take the following steps. Now there are two ways to go about this business:

• You can get a haulage truck ( tankers ), buy kerosene from the depots and distribute to retailers.
• You can also set up a mini depot and retail kerosene to end users.

Regardless of the one you choose, you will surely make money. However, this article will be strictly focused on the mini depot ( kerosene retail ) business.

How to Start a Kerosene Supply Business

P.S : If you are interested in starting a kerosene supply business, then you need a haulage truck of about 13,800 liter size minimum. If you want to become a large scale supplier, you can get a 30,000, 33,000 or 45,000 liter truck size (only Mobil and NNPC seem to have such trucks). If you don’t have the required capital to purchase a truck or tanker outright, you can lease a truck.

If you choose to go this route, I advice you get a lawyer to review the lease agreement properly. I also advice you partner with an oil and gas consultant or someone experienced in the business to help you crosscheck the truck details (picture, calibration meter, logo, transporter’s name, etc). This will be needed during the registration of the truck with DPR; so as to obtain the peddler’s license requirements.

It is also important that you register your driver with the PTD ( Petroleum Tanker Drivers ), which is a sub-branch of NUPENG ( National  Union of Petroleum and Gas Workers ). To obtain the necessary licenses, you need a tax clearance, VAT certificate, a sponsor and your certificate of incorporation.

Once you have obtained the DPR Peddler’s permit, you can then proceed to register with the Kerosene Peddler’s Union. All these processes and licenses are important, so as to avoid your truck being impounded.

Once you are through with all the registrations, you can take your truck and money to any of the depots where they have products and start your business. You can choose to lift products from either the NNPC terminals, PPMC terminals or from independent marketers. In Lagos Nigeria, most of the independent marketers depot is located at Ibru Jetty Apapa, Tincan and Coconut.

When it comes to running a kerosene supply business, the profit is made based on volume; and this can be achieved via regularity of supplies. You should strive to lift at least three truckloads of kerosene per week or more. This is better than increasing your profit margin per liter.

Starting a Kerosene Retail & Supply Company – Sample Business Plan Template

1. find a good location.

To succeed in the kerosene retail business, you need to be strategically located. A good place to site your mini kerosene depot is within residential areas with high population density. Of course, it will be preferable if majority of the residents are middle or low income earners as they are the ones that purchase kerosene more. Research shows that high income earners prefer cooking gas to kerosene.

Since you will be selling kerosene using a surface tank, you will need space large enough to accommodate one. If you have some space right in front of your home, then that would be just fine; since you won’t spend extra costs on rent. But if you don’t, you will have to pay rental fees either monthly or annually.

2. Register with the appropriate body or agency

Before you can start kerosene retail business, you will need to register with the specific regulatory body for kerosene sellers in your state or country. This body will then issue you a license and let you know the rules and regulations that bind selling kerosene.

Examples of such bodies are NUPENG (National  Union of Petroleum and Gas Workers), DPR (Department of Petroleum Resources), and the Kerosene Retailers Association. To obtain the necessary licenses, you need a tax clearance, VAT certificate, a sponsor and your certificate of incorporation.

In Nigeria , the regulatory body for kerosene requires that your surface tank must be placed at no less than 200 meters from that of another kerosene dealer. This is to avoid stiff competition. Also, the body requires that surface tanks be painted blue and taped with white lines in the middle. This is to indicate that the tanks are used for storing kerosene and not another commodity.

3. Construct a surface tank

To get surface tank, you can approach a welder to help you construct a very good surface tank. You may also decide to buy an already built tank, this can be either new or fairly used. The cost of a surface tank depends on the capacity. You can decide to start with either a 5,000 or 10,000-capacity tank.

You must ensure that the tank is well painted on both the exterior and interior to avoid rusting. And make sure the welding is properly done to prevent leakage. It is also important that your tank quality meets the minimum specification, as petroleum taskforce officials regularly conduct inspections and checks.

4. Arrange with suppliers

While most of the kerosene sales in Nigeria are controlled by independent marketers of petroleum products, the Nigeria National Petroleum Corporation ( NNPC ) also controls up to 40% of kerosene sales in the country. This means that as a Nigerian marketer, supplier or retailer have two options to source your kerosene from.

You can either buy from the NNPC mega-stations sprinkled all over Nigeria or from any of the independent marketers. If you are not based in Nigeria, you may need to find out how kerosene is supplied in your country.

5. Launch your business

You can design a signboard or placard and position it near your tank. This will make people aware that you are selling kerosene. To attract customers, you may need to offer attractive discounts or bonuses at first. However, I want to point out that most kerosene retailers in Nigeria don’t advertise. Why? The reason is because there is always a steady supply of customers.

4 Challenges of starting a kerosene retail business

• Both kerosene supply and retailing business are capital and management intensive.
• Another challenge you will face is the bureaucratic process and hurdles you will pass through, just to obtain operation permit especially in a country like Nigeria. Believe me, it is quite cumbersome and stressful that you might even lose the zeal to go ahead with the business.
• The third challenge you will face is getting regular supply. Due to the demand, you may be finding it difficult as a retailer to get a steady supply of kerosene from your supplier. Even suppliers also face challenges when loading at the various terminals or depots.
• You should also be prepared to deal with the issue of theft because in this business, everyone is seeking an opportunity to rip you off. That is why you must learn the rudiments of the business thoroughly to avoid being shortchanged by your suppliers and employees.

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Last Updated on September 5, 2022

Home » Business » How to start a profitable gas business in Kenya?

How to start a profitable gas business in Kenya?

Liquefied petroleum gas or LP gas is one of the most utilized alternative fuels used in the world. Moreover, in countries like Kenya, gas business isn’t even an alternative at all as it is the mainstay for heating. And cooking in most households in the country. For those unfamiliar with what it is, liquefied petroleum gas {LPG} is a flammable mixture of hydrocarbon gases used as a fuel in heating appliances.

The gas burns cleanly, releasing very few sulphur emissions, and posing no ground or water pollution hazards.

Hence the popularity as a business opportunity in Kenya that caters to industrial, commercial, and household consumers.

The cooking gas business in Kenya has created lucrative opportunities for resourceful entrepreneurs .

If you have been searching for a profitable venture to sink your teeth into.

Then a cooking gas retail business in Kenya might just be the best option for you.

Market Segmentation

The LPG business market in Kenya involves buying huge quantities of LP gas, storing it in tanks, and supplying it to individuals that use it for domestic cooking.

The benefit of this distribution business is that it’s a low entry venture with fair capital requirements.

And can be completely customized to fit your budget needs and the various personal requirements of your clients.

Not to mention, anybody can start a cooking gas sale and delivery business irrespective of educational background.

In Kenya, the use and supply distribution of LPG is dominated by two primary end-use applications; cooking and lighting fuel in residential and commercial establishments and as process fuel in industrial manufacturing operations.

It is estimate that the domestic sector uses about 65%, while the commerce and industrial business sector accounts for the other 35%.

In the Kenyan market, most of the distributors of cooking gas lack the necessary market information about the rural and remote areas that need their business solutions most.

And as with every successful venture, information on the market size, existing and competing alternatives, supply, and LPG distribution channels, willingness and ability to pay.

And also, current and projected demand are all important factors needed to inform business and investment decisions.

However, only a few have the resources to carry out the needed market assessment to advise or improve their service offering.

Here in lies the opportunity for any determined entrepreneur.

RELATED: HOW TO START A REAL ESTATE BUSINESS IN KENYA

As a result, there are a number of important factors and important information that you need to take into proper consideration for those interested in starting a gas distribution business in Kenya.

1. Get all the necessary information about the industry

• How is cooking gas measured?
• Where do you buy it from?
• What are the common business challenges sellers in the LPG industry face?
• How do you identify quality LPG?
• And how do you handle your cooking gas cylinders?
• How do you refill a customer’s gas cylinder?
• What are the various types of gas that can be sold, and which is the best?
• What factors affect the local retail price of cooking gas?

You must take all these questions into deep consideration as you need to answer them before starting a cooking gas retail business in Kenya.

After all, knowledge is one of the keys to success in any business.

You definitely cannot jump into an unknown business market and expect to find success easily.

So you must invest time to get the basic insider knowledge about this business.

If possible, you should learn from some of the locally established LPG gas business operators in Kenya.

2. Put together a good business plan

No matter how lucrative a business idea or opportunity might seem, a well-written business plan is an important tool because it will allow you to track your goals as the business starts to grow.

Evaluating business models involves an analysis of various operational aspects required for the success of a business.

These may range from product selection, identifying a customer base, sources of revenue, and financing details.

Formulating a business plan should be the first thing done when starting a new cooking gas business Kenya or any business venture.

It’ll help you see the bigger picture, plan, make important decisions, assess the competition.

Also, potential threats to progress well in advance and improve the overall likelihood of success.

Moreover, a good business plan is very valuable for the future because it helps when trying to attract investors.

So they can determine if your Kenya LPG distribution business in on the right path and worth putting money into.

3. Get the necessary licenses

Before you dive into Kenya’s LPG retail business, you must start to get the necessary licenses for you to operate your LPG distribution business legally.

This is because the LPG regulations that came into force in Kenya this year outlined tough requirements for cooking gas traders, prompting mass closure by retailers.

An excerpt from the regulations passed by parliament in June 2019 states,

“A person who wishes to undertake an LPG business shall make an application for a license to the Authority or its licensing agents in the prescribed manner…”

Moreover, among the new regulations by the energy regulator is that cooking gas cylinder traders must have permission from brand owners.

Failure to which they will be fined Sh10 million ($100,000) or more, a five-year jail sentence or more, or risks the invalidation of their operating license.

To legally operate an LPG distribution business in Kenya, you must officially acquire the following licenses:

ERC Retail License

Among the key conditions, you need to have for your LPG distribution business is a supply contract with a licensed LPG wholesaler.

If the supplier is independent, they must have permission from the oil company to refill on its behalf.

The license for your business will normally cost around Kshs. 5000 and is usually in about a month.

You can apply online through the ERC website .

Fire License

This license is proof that you have taken the required measures to avoid the outbreak of a fire, and in case of one, you can control it.

You should, at the very least, have one readily inspected, fully functional, and certified fire extinguisher.

The fire license is acquired from the Fire Department of the county government and costs typically about Kshs. 3000.

It’s also recommended to acquire this license as a safeguard against harassment from government officials.

A Business Permit

This is the normal business permit issued by the local authorities required to open your LPG distribution business legally.

The price usually is dependant on the area, size of the business, and locality.

Prices average Kshs. 8000.

Weight & Measures Certification

This is certification from the Weights & Measures department that your weighing machine is properly calibrate.

Price averages Kshs. 1200.

KRA Certificate

This is a tax compliance document that shows you are paying your (individual taxpayer or a company) taxes and filing your tax returns.

4. Get the right equipment for your LPG distribution business

Gas cylinders.

Lpg cylinders are the property of the oil marketing companies that brand and Issue them.

The companies usually import gas cylinders from countries like Thailand or purchase them locally from gas cylinder manufacturing companies.

These companies brand the cylinders, fill them with gas, and then release them to the market.

The price of empty gas cylinders usually comes at around Kshs. 800 to Kshs. 1000.

Gas cylinders in Kenya mostly come in 3 sizes:

• 3 kg – This is popular in low-income areas.
• 6 kg – This average quantity is the most popular overall
• 13 kg – Preferred by those of middle and relatively high-end income.

There are other sizes; 15kg, 25 kg, 35kg, 45 kg, 50 kg.

However, these aren’t that commonly purchased as the 3kg and 6 kg gas cylinders took over the mass market as affordable for most low-income households.

In short, the 6 kg gas cylinder is the fastest moving in neighborhood gas retail shops.

You can start with a little of each but with a bias towards the 6 kg LPG version.

You also need to purchase a:

Metallic Cage

This is the cage is to place and display the LPG cylinders.

There is no standard price or single source for these.

Lpg retailers order from local welders and negotiate the price depending on what you would like.

Fire Extinguisher

Fire extinguishers can be from some hardware and motor vehicle spare shops.

Or official fire equipment companies like Nimrod Kenya and Dragon Fire with prices varying on the size.

Standard extinguishers normally go between Kshs.3500 to Ksh.7000.

Digital Weighing Scale

There are various digital weighing machines available with supermarkets and hardware shops stocking them.

Prices start from around Kshs. 15,000 to Kshs. 50,000 depending on the features and make.

5. Find an ideal location

After putting together all the necessary business documents, equipment, and have gathered all the information required.

You need to start to find an appropriate piece of property for your LPG distribution business.

A factor you will need to bear in mind when choosing a location in your market.

You must locate your LPG distribution business close to where there are many potential customers as while kerosene may need to be purchased weekly or even daily.

LPG refills do not need that much frequent travel to buy.

For instance, a business customer could be cooking, and even before the meal, the gas is over.

In such circumstances, the client will want to purchase the gas as quickly as possible and from the nearest seller.

Not to mention the fact that gas cylinders are also bulky and relatively heavy items.

As such, the best places to set up your cooking gas retail store are residential areas (majorly dominated by the middle class).

And near entertainment centers such as hotels, restaurants, and fast-food outlets.

6. Assess and locate a market niche for your business

There already exists a huge demand for cooking gas in the country.

However, there is often a lot of competition in this business because, as previously mentioned, it’s relatively easy to start if you have the capital.

To avoid the crowded marketplace and unhealthy competition.

This LPG distribution business model will work better if you can find dedicated customers or an under-supplied area of town and dominate the supply.

It is in those locales that there is good potential to make more profit.

High-end homeowners are prime examples of customers who can become dedicated to a supplier who reliably delivers good service.

You just need to think of unique ways to differentiate yourself from the competition.

For instance, you can consider creating an online business website to help you get a fix on your target market more accurately & supply customers better.

There are already a few cooking gas distribution businesses in Kenya that have recently jumped on this wave, such as; Kisafi, Vite Kenya & Click A Gas.

You can take a cue from them and set up your LPG gas business in Kenya to also be online to help get a head start on your competition.

7. Transportation and staff

If you would have to deliver cooking gas to customers, then your LPG distribution business will need to get a truck, van, or motorcycle capable of safely hauling cooking gas.

You will also need a few messengers on hand to deliver the gas cylinders.

If you cannot afford to buy a vehicle, you can always lease one each time you need it, pending when you would be able to procure yours.

Keep in mind, and you must ensure that the vehicle in question meets the safety requirements for vehicles hauling hazardous materials such as cooking gas.

8. Marketing and advertising

Marketing involves focusing on direct efforts like advertising and efforts at branding.

Advertising in the Kenyan business market takes some common, easily replicable forms.

One utilizes billboards while another is the placement of stickers in shops, gates, matatus, or any available public spaces.

Other forms of advertising include pamphlets, posters, and in some cases, online classifieds depending on your target customer.

The effectiveness of your marketing strategy largely depends on adopting aggressive marketing strategies and offering attractive discounts.

But as mentioned, what’s even more important is for you to narrow down the target demographic.

It also helps by widening your LPG distribution business and emphasizing how you can offer the potential customer value-added services such as home or office delivery.

Moreover, sales of accessories such as gas cylinders and burners.

The gas cylinder price is an important consideration for customers.

Since July 1, 2020, Kenyans forced to pay a Ksh. 300 higher markup for LPG after a 14% Value Added Tax (VAT) hike hit the gas market.

This came after Kenya’s Finance Bill 2020 removed LPG from tax-exempt goods, bringing a commodity in the majority of Kenyan households to the tax fold.

As such, on average, a 13-kilogram cooking gas used to retail for 2.100 to 2,200 has resulted in an increase to between 2,400 and Sh2,508 from July 1 when the new tax measures came into effect.

As such, price-based business competition is very common of late, especially in low and mid-income areas.

RELATED: EVERYTHING ABOUT BUTCHERY BUSINESS IN KENYA

Moreover, in most cases where the price is too low compare to the competition, customers can end up skeptical about the quantity.

On the other hand, higher prices do not instill confidence that the cooking gas is of the correct amount because of the skepticism that already exists.

It is important to find the right price point when charging your business customers, depending on the area.

10. Excellent customer service

You may have a quality product, but if your customer service is undependable, unfriendly, or just difficult to get in to contact with.

Especially in the given locally that your cooking gas business is located.

Then you can be sure that everybody will hear about it, and you’ll lose customers over it.

Businesses should ensure that customers are not kept waiting or are unable to receive prompt service.

Statistics suggest that cooking gas customers in Kenya tend to switch suppliers if customer support does not swiftly resolve their issues, especially because they are quite a few options to choose from.

Consistency is key in this line of work.

That’s one big reason why investing in good customer service is key to long-term success.

This also involves small things like picking and delivering the gas where applicable.

Especially if you are in an area located far from the customer’s house or if the customer lives on an upper floor of an apartment building.

For instance, your staff must help the customer carry the heavy gas cylinder into the home or even install the new gas cylinder.

Customers tend to take note of such simple things and tend to tell other potential clients as well.

Moreover, you should ensure that your opening and closing times are consistent.

If a customer calls you be it in the early morning or late evening, they must be confident that they will receive the customer service and gas delivery they urgently require promptly and with haste.

11. Availability and Dependability

Among consumers, it’s common that there can be skepticism on whether the cooking gas being supplied is, in fact, of the right and full quantity.

This is mostly due to the many illegal retailers that can be around Kenya’s localities.

While many cooking gas businesses have a weighing scale with which a customer can confirm the true weight of their filled gas cylinder.

Many of them can be skeptical as to whether the scales have tampered with.

Thus, the only true proof that consumers take to prove that the weight is correct is if the gas usually lasts for the duration expected.

It’s vital always to ensure that all your gas cylinders and it’s contents match up to what is expected of them by the customer.

In addition to this, some customers choose to utilize a specific type or brand of a gas cylinder.

In such cases, it pays to have a variety of the most common brands available to give yourself an edge over the competition.

How much profit can I potentially make?

The cost of 1KG of cooking gas from wholesalers is, on average, about Ksh 150, but prices vary from seller to seller.

If the selling price of a 6 KG gas is Ksh 900 to Ksh 1000.

Then you can net yourself a profit of between Ksh 300 and Ksh 400 by reselling it at Ksh 1300.

In a day, your LPG distribution business can normally sell up to 10 6kg gas cylinders, bringing your profits up to a potential Ksh 4000 per day.

But keep in mind that this only accounts for one size, so selling a few 13kg gas cylinders throughout the day could earn you even more money on top.

Ideally, your LPG distribution business can generally generate between Ksh 40,000 and Ksh 70,000 per month just as a small venture.

As more Kenyans migrate to the cities, the demand for cleaner and cheaper fuels like LPG cooking gas continues to grow.

Not to mention, climate change concerns and a growing consciousness to preserve our natural environment will inevitably lead to higher adoption of cooking gas as the preferred fuel for households.

And also, jumping into that business market now is most assuredly prime money-making opportunity for those determined enough.

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How to Become a Gas Dealer in Kenya

Vincent Nyoike | Posted in: Kenya

The use of LPG (Liquified Petroleum Gas) in cooking in Kenya is increasingly in demand, since many people in urban areas prefer to use gas for cooking. Recently, there has been the establishment of many LPG companies to meet the demand for gas. Since gas is becoming an essential commodity in households, and starting cooking gas business in Kenya to provide gas will earn you good profits. If you wish to start a gas refilling business in Kenya, it is an excellent idea.

Is Gas Business Profitable in Kenya?

Yes, gas business is profitable in Kenya. With growing urbanization in Kenya, the use of gas for cooking and heating is on the rise. This has led to the high demand for LPG gas in the country. The rise in demand means gas business is profitable in Kenya, especially if you follow the practical tips in this article such right location, good customer service and patience.

After registering a company in Kenya , this is how to become LPG gas distributor in Kenya.

Draft a Cooking Business Plan

It is essential to have a cooking gas business plan . It helps you put down your goals and track them over time. Furthermore, it is also important for evaluating business models like the analysis of various operational aspects for the success of any business. Make sure to include business location, startup costs, market segmentation, cashflow projections, risks, strengths and weaknesses of the business.

Acquire the Necessary Licenses and Permits

To operate an LPG business in Kenya, you need the following business licenses and permits.

Energy Regulation Commission License

To get the Energy Regulation Commission license in Kenya, you need to provide your business location and indicate your gas supplier. You must also meet the safety requirements for LPG to avoid disasters like fire. Among the requirements to operate a retail LPG gas business, you must store gas cylinders in the open and you must have a fire extinguisher. The cost of the license is around Ksh 5,000 every month.

Trading License

Just like any other business, you need a trading license to start a retail gas business. You can obtain one from your local authority or county government offices. The price ranges between Ksh 5,000 and Ksh 10,000 annually.

Fire License

Fire licenses are taken as a proof that you meet the requirements to avoid fires and in case of fires, you can control it. As such, you need to have fire extinguishers. You can get the license from county councils at Ksh 3,000.

KRA Certificate

This certificate is for ensuring that your business complies with Kenya Revenue requirements. As such, you need to pay taxes and file returns.

Weights and Measures Certification

This certificate is taken to ensure that your gas meets the required weights and measures. You need to have a proper weighing scale. You can get the license at around Ksh 1,200.

Cooking gas is a flammable substance. Please make sure your gas business is insured for loss of property and life. What you will be paying monthly for your insurance will be a very small amount compared to what it will cost you in case there’s fire or an explosion at your premise. Remember, you can also face lawsuits from your neighbors or customers.

Learn About Cooking Gas Business

You cannot start a cooking gas business without learning the essential elements regarding the business. You can learn from experienced LPG retailers, or you can ask your potential supplier for training. Some of the things you must know before start your gas business are the following.

• How to identify best gas cylinders
• Types of cooking gas
• How to identify quality gas
• How to identify good LPG gas supplier in Kenya
• How to measure gas
• How to refill gas cylinders
• How to safely store gas cylinder
• How to operate a fire extinguisher
• Opportunities and challenges facing cooking gas retailers in Kenya

Assess the LPG Market

Before you can start a cooking gas business, you need to assess the market needs. For example, determine if people near you are using cooking gas in their households. In this case, there will be good gas business opportunities. Also, get to know the weight that is commonly used by a majority of people. In most places, 6 kg gas cylinders are fast-moving.

Find a Good Business Location

A good business location for LPG retail business in Kenya is near residential areas. Also, densely populated areas do well for LPG gas. In towns, most people use cooking gas in their household, unlike in rural areas where a majority of people use firewood and kerosene. Ensure that in the area your business is operating in, there is no unhealthy business competition. Having suppliers near you is a factor to consider, avoiding high costs when transporting gas cylinders.

Advertise Your Cooking Gas Retail Business

It would be best if you advertised your cooking gas retail business for potential customers to know about the existence of your business. The most excellent way to advertise your business is through the use of stickers, posters and also on social media. Design good business posters and stick them at the entrances of residential areas and electricity poles. Ensure to indicate the business name and contact details. When people need a refill, they will call you to deliver.

Equipment for Starting an LPG Retail Business in Kenya

To start cooking gas retail business in Kenya, you need the following equipment.

Gas Cylinders

It would be best if you had different brands of LPG cylinders. And since your business is retail, your work is to exchange empty gas cylinders for refilled cylinders. You can get filled gas cylinders from gas companies. The Energy Regulation Commission controls the prices of gas in Kenya. Usually, a 6 kg gas goes for between Ksh 800 and Ksh 1000. LPG cylinders are available in the following quantities.

Types of Gas Cylinders in Kenya

For your business to succeed, you need to know the best gas cylinders in Kenya by looking at the types of gas cylinders in the country and their uses.

• 3 kg cylinders: These are the smallest cylinders and are commonly used in low-income areas.
• 6 kg cylinders: These are typically used for domestic cooking.
• 13 kg cylinders: These are a more common size for domestic cooking and can also be used for small businesses.
• 35 kg cylinders: These are larger cylinders that are typically used for commercial cooking or for businesses that need a large supply of gas.
• 50 kg cylinders: These are the largest type of gas cylinders and are typically used for industrial applications.

In addition to these standard sizes, there are also a number of specialty gas cylinders available in Kenya. These include cylinders for welding, medical gas, and fire suppression.

One of the requirements for gas retailers is that they should store gas in open areas. As such, you need a metal cage where you will be keeping your gas cylinders. You can order one from your gas brand provide or get one from local welders.

Fire Extinguisher

You need fire extinguishers as a precautionary measure against any fire outbreaks. Many fire extinguishers providers can supply you. Fire extinguishers cost between Ksh 3,500 and Ksh 7,000.

Digital Weighing Scale

It would be best if you had a weighing scale when selling cooking gas. Customers need to confirm that the gas meets the required measurements before buying. You can get a digital weighing scale from hardware at the cost of around Ksh 15,000.

LPG Gas Suppliers in Kenya

Recently, many companies have been targeting the Kenyan LPG market due to their high demand that is coming with urbanization. The following are the standard LPG suppliers in the market.

• Total Kenya
• Hashi Energy
• KenolKobil (K-Gas)
• National Oil
• Proto Energy

Final Words on How to Start LPG Retail Business in Kenya

To excel in gas business, you need to be different from other gas retailers in the market. For instance, you need to offer after-sales services to customers by delivering LPG cylinders to their homes. Also, make sure that your gas meets the measurement requirements. You need to measure cylinders whenever customers come for a refill, which is essential to win their trust. With time, you will have a large market share after your business has established a name.

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Last updated on May 29th, 2023 at 06:24 am

There is a system you can use to write a business plan in Kenya that streamlines the entire process.

By using this system, not only makes the writing process faster and simpler but also way more useful in a really practical way.

If you want to organize your business and start strategically increasing your profits and growing towards your goals, then keep reading this guide.

This business plan has six main sections and I’d recommend that you start by scribbling your ideas for each on a separate blank piece of paper.

Once you get your ideas worked out, you can create one cohesive document.

How to Write a Business Plan in Kenya 

Now, the six pages of your business plan in Kenya are 

• Product 
• Production and Delivery 

Let’s look at each of these pages, shall we?

Page #1. Overview

The first page of your business plan will be an overview.

It is going to give a basic understanding of what your company does and the structure of your business.

Now, on that first overview page of your business plan, you want to include 

• Your business structure
• Location, that is where you do business and also
• A brief description of exactly what your company actually does.

The next piece of information for your company’s overview is your business’s mission, which is really important.

Here is why;

The business mission is the driving force behind your business plan in Kenya.

It is what all your plans are focused on achieving and if you don’t have a mission’s like trying to make plans to reach a goal without having the goal.

So make sure you don’t skip this step.

The final component of the overview page is your chart of accountability.

This chart describes who is accountable for which of the major tasks involved in running the business.

And the three main areas of accountability in most businesses are 

• Sales operations
• Finances 

Page #2. Message

The second page of your business plan in Kenya will focus on outlining your company’s message.

If you want your business to be successful, you MUST have a clear idea of;

• What message you are working to communicate to your customers, 
• Who are those customers
• How do you fit into their lives and 
• How can you help them solve a problem that they are facing and create a result that they are looking for.

Here are the questions that you will want to answer on this page of your business plan

• What problem does your company solve for your customers
• What result does your company create for those customers
• How does your company create those results
• Who does your company serve
• Why do you do what you do
• Why should your customers choose you over your competition 
• What is your company’s step by step plan for creating those results for the customer or what is your proprietary system

This both helps to answer the question of what sets you apart from your competition

It also shows your customers how you are going to create those results that you are promising.

By making this clear, you are instilling confidence in your ability to create the results.

Page #3. Marketing

Let’s talk about the third page of your business plan.

This page focuses on marketing and generating sales.

First, you will want to define your target market by their demography and psychographics.

Demographics are attributes such as their age, income, where they live.

On the other hand, psychographics has to do with their interests, desires, and fears.

Here, you will also want to include an estimated size of your target market .

More importantly, where you have identified that you can find groups of those target customers.

Here is a little big hint;

If you haven’t yet figured out where you can find groups of those customers be it online or off, you are probably going to have trouble successfully marketing your product or service.

So if you come to this part in the business plan and don’t know what to put here, stop and do some digging.

Make sure that YOU can find this customer you have defined here. 

If you can’t, you might want to consider redefining that target customer and pivoting your marketing position.

The final three pieces of information that you can include on this page of your business plan are

• Your visibility strategy. This explains how people will first learn about your brand and your products 
• Your lead generation strategy, which explains how you will establish contact with the people who have discovered your brand
• Your conversion strategy, which is essentially your sales strategy. Explain how you will turn those leads you’ve generated into paying customers.

Here is a quick heads up;

As you are working through this business plan, it’s more than likely that you won’t know the answers to all of these questions.

And you won’t have all these things figured out yet.

I just want to let you know that that is completely alright.

And actually, one of the main purposes of writing your business plan is to become aware of things you haven’t thought about yet or haven’t figured out.

Because only once you are aware of what you don’t know, you will be able to think through it. 

Don’t put off writing the business plan in Kenya just because you don’t know everything yet.

Rather, write the business plan so that you can get very clear on exactly what you know and need to figure out.

Page #4. Product

This page describes the product or products that you sell.

To clarify, a product could be a physical product or a digital product or service.

I highly recommend that you choose just one product as your business’s primary product.

You might be selling several different things, so determine what your main product is that you are going to center your business’s marketing message around.

Many different parts of your business development will be much easier if you do have one product that is the focus.

Now, on this page of the business plan, start by identifying 

• what that product is and then 
• describing the result that the product creates.

Here’s a little SECRET;

What your business sells is really the result your product creates not the product itself.

After describing the results, describe the impact the product creates.

This is different than the result itself.

It’s instead how the customers’ life is affected by the result of the product.

For example;

If your product is a vacuum cleaner, then the result the product creates is clean floors.

But the impact of the product is that your prospect feels better about the state of their house.

Now they have a cleaner, healthier living environment and perhaps feel more confident inviting some company.

Once you have described those three things for your main product, you can move on to other products that your company sells and do the same.

Page #5. Goals

The final page of your business success plan has to do with your goals.

If you have looked at any examples of business plans in the past or read a guide on how to write a business plan in Kenya, you might have seen a section that focused on projections.

• sales projections or
• new customer acquisition projections, or 
• market share projections 

And if you’ve tried to write a business plan in Kenya in the past and you tried to write this section, you may have found it very difficult.

Chances are that is because you are running a small business in Kenya or maybe you have just started your business.

Truth is, it is really difficult to make accurate projections or projections at all for that matter if you don’t have any data to base them on.

And that is why I’d recommend that instead of trying to create projections, you simply set goals if you are just starting your company or have only been in business for a couple of years.

You can decide exactly how long you want to make your goals for.

But a good place to start would be to set some one-year goals and also some five-year goals.

This way you know what you need to work on right now but you also know where you are aiming long term.

For each time frame, you can set whatever goals you’d like.

However, some that I might recommend;

• number of sales total revenue 
• Profit 
• impact in terms of the number of customers who you help or how wide you spread your message and
• Development, could be the extent to which you have advanced the product that you create and offer or to what extent you have built your company.

And of course, when setting goals, it is always important to set specific, measurable goals and a deadline for when you plan to reach them.

Free Business Plans in Kenya & Guides (+Pdf)

Coming soon….

The following business plans and guides will be uploaded here soon. Sign Up for notifications.

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Final thoughts on creating a business plan in Kenya

All right, that is everything you need to include in your business plan in Kenya.

As you can see, they are simple pages and you probably already know most of the information that will be going into this business plan.

There are many other pieces of information that you may want to include in your business plan 

You are more than welcome to include any relevant information that describes how you successfully run you and how you plan to reach your goals.

Here is my final piece of advice for you;

Make sure that you don’t overcomplicate things.

More words are not better.

In fact, your business plan in Kenya will be the most useful if you keep it short and relatively simple.

If you write a document that’s 20 40 or more pages long, chances are high that nobody will ever go back and read it again.

A business plan is a written document that describes your business, its objectives and strategies, and how you will achieve them. It outlines your marketing plan, financial projections, and operational procedures.

A business plan is important because it helps potential investors or lenders understand your business concept, objectives, and strategies. It also gives an overview of the financial viability of the business and helps you analyze potential risks.

A business plan should include a summary of your business concept, products and services, market segment, target consumers, marketing plan, financial plan, including cash flow statement, balance sheet, profit and loss statement, and sales forecast, operational procedures, personnel, infrastructure, and ownership.

The cost of writing a business plan varies depending on the complexity of the business and the depth of the analysis required. On average, it can range from KES 10,000 to KES 50,000.

Every business owner, whether an established entrepreneur or a startup, should write a business plan. It is a crucial document required to give potential investors an overview of the business and its financial viability.

To attract an investor with your business plan, you need to clearly define your business concept, market segment, target consumers, and marketing plan. You should also provide financial projections, including the required investment and the expected return on investment.

The purpose of a financial plan in a business plan is to provide an overview of the business’s financial viability. It includes cash flow statement, balance sheet, profit and loss statement, and sales forecast.

To write a marketing plan for your business, you’ll need to analyze your market segment, determine your target consumers, and define your promotional, advertising, and sales strategies to attract and retain them. You should also set objectives and strict budgets for your promotion and advertising activities.

You should update your business plan constantly to reflect changes in your business environment, like increased competition, new regulations, or changes in your products or services. You should review and update it at least once a year, or whenever significant changes occur.

A profit and loss statement is a financial statement that shows the revenues, expenses, and net income or loss of a business for a specific period, usually monthly or annually. It helps business owners analyze their profit margins and identify areas where they can cut costs and increase revenue.

Yes, every business needs insurance to protect its assets, employees, and customers. You should consider insurance options, like liability insurance, property insurance, or workers’ compensation insurance, depending on your business operations and risks.

3 Responses to “How to Write a Business Plan in Kenya (+ Free PDFs)”

Yoh. This was great content. I will apply it on my business and see the results. Thanks a lot.

Yes Chris, glad you found it valuable.

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Professional business plan in kenya.

Table of Contents

Starting a business in Kenya without a Professional Business Plan in Kenya is like Hiking Mt Kenya without a map or GPS support – you’ll eventually get lost and starve

Many entrepreneurs know exactly what they want to accomplish with their new business, they know what products or service they will offer, what makes their product better than the competition and how to operate their business, however, many have never written a business plan in Kenya before and hence need professional help and guidance along the way, whether in research, forecasting sales, calculating costs or creating financial estimates and projections , this is where we come in.

We guide you throughout the process to come up with a professional business plan in Kenya and help you document your business concept, vision, research and all other elements of your Business into a presentable business plan in Kenya that you can use as a management tool or to share with external entities such as government authorities or investors.

The benefit of having a Professional Business Plan in Kenya includes  the following;

• Clarify your vision and decide whether to forge ahead with the business idea.
• Determine if your product and/or service has a enough market to support it and whether or not it will be profitable.
• Provide an estimate of your start-up costs and how much you’ll need to invest or finance.
• Convince investors and lenders to fund your business.
• Define your target market (who your customers are or will be) and how to best reach them through strategic marketing actions or expanding market coverage or reach.
• Establish or reevaluate your competitive position within the marketplace, by conducting a thorough analysis of the competition (finding out where your competitor’s weaknesses are and how you can take advantage of them).
• Define corporate objectives and programs to achieve those objectives.
• Help your business make money from the start by developing effective operational strategies.
• A business plan in Kenya helps you understand the risks involved and anticipating potential problems so you that can solve them before they become disasters.

Click Here to speak to an expert for help on how to write a business plan in Kenya.

Business plan faqs, how to write a business plan in kenya.

Depending on the complexity of the business idea and the amount of data required, a business owner can opt to write the business plan by themselves if the idea is not soo complex. Alternatively they can opt to engage a consultant to help them come up with the professional business plan with an extensive market research and accurate financial projections. Contact us today for more.

How much does a business plan cost in Kenya?

The cost for business plans vary depending on the complexity of the idea and the amount of research work to be carries out. reach out to us today for a free quote on the the same.

How much capital do I need to start a business in Kenya?

The capital requirement for starting a business in Kenya depends on the specific business idea and hence the need of having a business plan to guide you on the costs related to successfully running and growing the business idea. A Business plan will form a good basis to support your business idea when seeking for funding.

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How to Start a Water Refilling Station Business In Kenya

Water is very essential for our daily life routine. People need to drink water in order to live. However, because of human introduction, directly or indirectly, of substances into the marine environment, our waters become polluted and undrinkable.

Because of the high demand for cleaner water, starting a water refilling station business becomes one of the most promising and profitable business in Kenya today.

Step by step procedure in starting a Water Refilling Station Business In Kenya

Decide if you want to put up your own water refilling station or just acquire a water refilling station franchise. If you have decided to put up your own, proceed below:

1. Make a Business Plan For Water Refilling Station Business In Kenya

This is created to outline your business’s vision, brand values, identity, and how it has to operate to become successful. It also helps in keeping you focused on your business goals and making your business attractive to investors.

2. Right Location For Water Refilling Station Business In Kenya

Finding a good location is one of the problems a new business owner must face. The location needs to be near your target market, making your business visible to people or look for a site that is heavy in foot traffic. Situate in places near schools, hospitals and clinics, offices, hotels, apartment and high-rise buildings, and subdivisions.

3. Look for Tassmatt In Your Water Refilling Station Business In Kenya

Tassmatt Agencies is the leading manufacture and supplier of water refilling equipment’s in Kenya. Visit or call us for a site visit and quote. After studying the quotations and the total costs, decide which you think is enough for your budget, and choose the right equipment’s to purchase. Don’t buy cheap machines and equipment’s as these will not last long.

After finalizing the location for your water refilling station, contact us for supply and ask for a layout plan that you can copy for constructing your water refilling station. As a reputable supplier, we normally go to the particular area to measure, evaluate and make the right design for your water refilling station business in Kenya.

After closing the deal, you can now start the construction of your water refilling station which will take 3 to 4 weeks to finish. At the same time, start making the deep well if this will be your preferred water source.

4. Register the Business To Start Your Water Refilling Station Business In Kenya

This will make your business legal and functional. If you’re a single owner, go to huduma center, which will issue a certificate of registration of business name (list at least 3  preferred business names). For other license, we do help our clients obtain them without hustle.

You can now start buying other supplies you will need like water containers, seals, heat gun, sanitizer soap, etc. At the same time, you can also start constructing your business’s signage and sticker labels for your products.

Once the construction is finished and the water source is ready, you can now schedule the installation of the machines and equipments (it’s better to do it at night to avoid people around). Complete installation takes 1 to 2 days only.

Dry run the machine and equipments for 1 to 3 days before selling the product, or get a sample for a water analysis.

Wait for the result of water testing. If it passed, then good luck and welcome to the club!

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Kenya: President Ruto Launches Plan to Revamp Nairobi

Nairobi — President William Ruto has launched a plan that will tackle the economic growth challenges related to urban land use and transport planning in the Nairobi metropolitan.

Referred to as the Kenya Urban Mobility and Growth Threshold Programme, the initiative aims to benefit more than 4.3 million people.

"This programme is about delivering results and unlocking greater opportunities for Kenyans," said President Ruto.

The Millennium Challenge Corporation CEO Alice Albright was present in the event that took place on Thursday in Washington, D.C.

"This is an exciting milestone in the growing partnership between Kenya and the United States," explained President Ruto.

Read the original article on Capital FM .

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At International Energy Conference, Delegates Push to Make Clean Cooking Accessible to All

Discussions on how to scale up resources to deliver efficient and affordable clean cooking to all are on the table at the 9th Annual Global Conference on Energy Efficiency by the International Energy Agency

Hajarah Nalwadda

FILE - A sack of charcoal is filled in Gulu, Uganda on May 27, 2023. (AP Photo/Hajarah Nalwadda, File)

NAIROBI, Kenya (AP) — Participants at a global conference on how to reduce the world's energy use are calling for universal access to clean cooking through government incentives and subsidies to unlock more private sector funds.

The Paris-based International Energy Agency's 9th annual conference on energy efficiency brings together ministers, CEOs and thought leaders from around the world to discuss how to speed up progress on energy efficiency, which experts say can drastically reduce planet-warming emissions. On the agenda is how to deliver affordable clean cooking, which involves using electricity, solar and other solutions instead of more polluting fuels like charcoal, wood and kerosene.

“There are many practical barriers to energy efficiency, and of course the barrier of the need for investment up front,” said Brian Motherway, head of IEA’s office of energy efficiency and inclusive transitions. “The key to unlocking efficiency is in the hands of governments – strong, co-ordinated policies by governments will unlock finance and enable business and consumers to take the actions required to lower their bills.”

This year’s conference, which is being held in Nairobi, focuses on accelerating progress towards doubling energy efficiency progress by 2030 as agreed by governments at COP28.

Rashid Abdallah, the executive director of the Africa Energy Commission, said at a panel discussion on Tuesday that “clean cooking should be part of any energy policy" or socio-economic development plan.

Globally, around 2.3 billion people cook using solid biomass fuel – such as wood and charcoal – and kerosene. In Asia, 1.2 billion people lack access to clean cooking facilities, and in Africa, more than 900 million people use biomass as their primary energy source. These energy sources release harmful toxic fumes and smoke that leads to illnesses and deaths and contribute to climate change.

There's also evidence that household air pollution from cooking with dirty fuels can lead to diabetes and adverse pregnancy outcomes such as stillbirth and low birth weight, said Matt Shupler, a postdoctoral fellow at Harvard T.H. Chan School of Public Health. “There are many known health effects,″ he said.

Cleaner alternatives include electric and ethanol cookers that emit fewer pollutants.

High prices are an obstacle to making clean, green and affordable cooking available to all, but positive trends are emerging in the sector, with investment in clean cooking enterprises surging to an all-time high of $215 million in 2022 and the number of clean cooking enterprises with revenue exceeding $1 million growing to 11 that same year, according to a report by the Clean Cooking Alliance .

Despite this progress, a huge capital gap remains in achieving universal access to clean cooking by 2030, as IEA estimates that $8 billion is needed annually as investment in clean cooking stoves, equipment and infrastructure to meet the goal.

One of the countries that has significantly scaled up affordable, high quality, clean cooking is Indonesia. In 2007 the government started implementing a program to transition its primary cooking fuel from kerosene to LPG. The proportion of the population with access to clean cooking doubled from 40% in 2010 to 80% in 2018. Regulation and incentives have been key to the program’s success, said Dadan Kusdiana, Secretary-General of the Ministry of Energy and Mineral Resources Energy and Mineral Resources.

“What we do is to provide the energy with affordability,” he said at a panel discussion on Tuesday. “They need this kind of energy, but they can’t afford it at the commercial price.”

The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org .

Copyright 2024 The  Associated Press . All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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State unveils plan for clean power generation

NAIROBI, Kenya, May 23 – Energy and Petroleum Cabinet Secretary Davis Chirchir and the European Commissioner for Energy Kadri Simson launched the Kenya Green Resilient Electricity System Programme during the International Energy Agency’s (IEA) 9 th Annual Global Conference on Energy Efficiency.

The initiative, which was unveiled with the support of Global Gateway, Europe’s investment strategy initiative for the world, will support the nation’s goal of a complete 100 percent transition to clean power generation by 2030.

It also aims to boost Kenya’s sustainable energy efforts by providing critical investments to expand the country’s production of green electricity as well as improving grid stability and efficiency.

“By making the Kenyan energy system more resilient, efficient and clean, the programme definitely contributes to Kenya’s energy and climate goals, powering socio-economic growth and transformation. It will also support reduction of greenhouse gas emissions and green industrialization,” said CS Chirchir.

The program has been developed under the European Union’s Global Gateway initiative in close cooperation with the Kenyan government and Team Europe partners, including the European Investment Bank (EIB) and KfW Development Bank.

The government, in collaboration with Team Europe, the world’s biggest climate finance contributor, will commit up to Sh36 billion as investment to finance the program, including a contribution of Sh2.8 billion in grants provided by the European Union.

The European Commissioner for Energy, Kadri Simson, affirmed that the program will also provide technical assistance and capacity building for the Kenyan implementing partners to ensure the successful and timely implementation of the project components.

“The programme will support Kenya’s socioeconomic development and green transition. It boosts the renewable energy sector by increasing electricity generation capacity, through additional generation from hydro, geothermal and solar sources, and strengthening reliability and efficiency of the transmission system,” stated Simson, European Commissioner.

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At international energy conference, delegates push to make clean cooking accessible to all

FILE - A sack of charcoal is filled in Gulu, Uganda on May 27, 2023. (AP Photo/Hajarah Nalwadda, File)

• Copy Link copied

NAIROBI, Kenya (AP) — Participants at a global conference on how to reduce the world’s energy use are calling for universal access to clean cooking through government incentives and subsidies to unlock more private sector funds.

The Paris-based International Energy Agency’s 9th annual conference on energy efficiency brings together ministers, CEOs and thought leaders from around the world to discuss how to speed up progress on energy efficiency, which experts say can drastically reduce planet-warming emissions. On the agenda is how to deliver affordable clean cooking, which involves using electricity, solar and other solutions instead of more polluting fuels like charcoal, wood and kerosene.

“There are many practical barriers to energy efficiency, and of course the barrier of the need for investment up front,” said Brian Motherway, head of IEA’s office of energy efficiency and inclusive transitions. “The key to unlocking efficiency is in the hands of governments – strong, co-ordinated policies by governments will unlock finance and enable business and consumers to take the actions required to lower their bills.”

This year’s conference, which is being held in Nairobi, focuses on accelerating progress towards doubling energy efficiency progress by 2030 as agreed by governments at COP28.

Rashid Abdallah, the executive director of the Africa Energy Commission, said at a panel discussion on Tuesday that “clean cooking should be part of any energy policy” or socio-economic development plan.

Globally, around 2.3 billion people cook using solid biomass fuel – such as wood and charcoal – and kerosene. In Asia, 1.2 billion people lack access to clean cooking facilities, and in Africa, more than 900 million people use biomass as their primary energy source. These energy sources release harmful toxic fumes and smoke that leads to illnesses and deaths and contribute to climate change.

There’s also evidence that household air pollution from cooking with dirty fuels can lead to diabetes and adverse pregnancy outcomes such as stillbirth and low birth weight, said Matt Shupler, a postdoctoral fellow at Harvard T.H. Chan School of Public Health. “There are many known health effects,″ he said.

Cleaner alternatives include electric and ethanol cookers that emit fewer pollutants.

High prices are an obstacle to making clean, green and affordable cooking available to all, but positive trends are emerging in the sector, with investment in clean cooking enterprises surging to an all-time high of $215 million in 2022 and the number of clean cooking enterprises with revenue exceeding $1 million growing to 11 that same year, according to a report by the Clean Cooking Alliance .

Despite this progress, a huge capital gap remains in achieving universal access to clean cooking by 2030, as IEA estimates that $8 billion is needed annually as investment in clean cooking stoves, equipment and infrastructure to meet the goal.

One of the countries that has significantly scaled up affordable, high quality, clean cooking is Indonesia. In 2007 the government started implementing a program to transition its primary cooking fuel from kerosene to LPG. The proportion of the population with access to clean cooking doubled from 40% in 2010 to 80% in 2018. Regulation and incentives have been key to the program’s success, said Dadan Kusdiana, Secretary-General of the Ministry of Energy and Mineral Resources Energy and Mineral Resources.

“What we do is to provide the energy with affordability,” he said at a panel discussion on Tuesday. “They need this kind of energy, but they can’t afford it at the commercial price.”

The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org .

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Microsoft, G42 Announce Geothermal-Powered Data Center in Kenya

By Dina Bass and Farah Elbahrawy

Microsoft Corp. and G42, the United Arab Emirates’ top artificial intelligence firm, are joining forces to build a $1 billion geothermal-powered data center in Kenya, the initial phase of a multiyear plan to dramatically increase cloud-computing capacity in East Africa.

G42 will lead the initial investment and handle the facility’s construction in Olkaria, which has abundant geothermal resources — a key benefit in a continent plagued by power outages and a potential boon for Microsoft’s efforts to meet its climate goals. The first phase will have a capacity of 100 megawatts and is expected to be operational in about two years.

Ultimately, the full project ...

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