Module 1: Setting Up the Shop

Choosing a Location and Retail Format

In retail, the location you choose decides who walks past your door, what they want to buy and how much rent you pay for the privilege. A good shop in the wrong place struggles; an ordinary shop in the right place can do well. The format you choose (a kiosk, a minimarket, a specialist store, a stall in a mall) must match that location and the customers there. This lesson shows you how to assess a location with evidence rather than a feeling, and how to choose a format that fits.

Start with the customer, not the building

Before looking at premises, write down who your customers will be and what they need. A shop selling everyday groceries depends on many small, frequent purchases from people who live or work nearby. A shop selling mobile phone accessories depends on passing foot traffic and impulse buying. A shop selling building materials depends on contractors with vehicles, so parking and road access matter more than pedestrians. Each customer type points to a different kind of location.

How to assess a location

Visit each possible site several times, at different hours and on different days, including a weekday morning, a weekday evening and a weekend. Look for:

• Foot or vehicle traffic. Stand nearby for 30 minutes and count the people who pass. More useful still, notice who they are: students, office workers, mothers with children, matatu commuters.
• Visibility and access. Can people see the shop from the main path? Is the entrance easy to reach? Is there somewhere for a customer's car or boda boda to stop?
• Anchors. Places that draw people regularly, such as a bus stage, school, hospital, market, church or large supermarket, bring customers past your door.
• Competition. Count similar shops within walking distance. Some competition is healthy because it shows demand, and clusters of similar shops can attract shoppers, but too many may mean thin margins.
• Costs and terms. Rent, service charges, any deposit and "goodwill" payment, and the length of the lease. Read the lease carefully and get advice before signing.
• Practical issues. Security at night, water and power supply, delivery access for suppliers, flooding risk, and the local authority licences and permits required. Check permit requirements and fees with your county government, as they vary and change.

Choosing a retail format

Many shops now also sell through WhatsApp, social media or delivery apps. Treat these as extra channels that support your physical location, not a replacement for choosing it well.

Worked example: two possible sites

Faith plans a minimarket in Ruiru. Site A is on the main road near a busy matatu stage, with rent of KES 60,000 a month. Site B is inside a large residential estate, 300 metres from the road, with rent of KES 25,000. (All figures are hypothetical.)

She counts traffic at both. Site A has far more people passing, but most are rushing to catch matatus and buy only airtime and snacks. Site B has fewer passers-by, but they are residents buying bread, milk, flour and cooking oil every day, and the nearest competitor is a small kiosk. She estimates that at Site B she needs daily sales of about KES 20,000 at her expected margin to cover rent, staff and other costs, against about KES 35,000 at Site A. She chooses Site B, a format of self-service for groceries with a counter for high-value items such as cooking oil and phone accessories.

Common mistakes to avoid

• Choosing a site after one visit at a single time of day.
• Counting traffic without asking whether those people are your customers.
• Ignoring the total cost of occupancy: deposit, goodwill, service charge and fit-out, not just rent.
• Signing a long lease before testing whether the location works.