Electrical Parts Business Guide

Business Plan Electrical Parts Business Guide 2020-07-09

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This guide looks at the business of selling electrical parts at a retail level. This generally includes parts and equipment used to connect power to buildings; residential, commercial or otherwise. It also includes electrical utilities used by those who are already connected such as bulbs, sockets and heaters.

From conversations with players in the industry, the electrical parts business has been enjoying positive growth for the last 15 years or so. This is as indicated by the increase in the number of players at all levels of the business from manufacturing to retail.

The growth of the business has been driven by a number of factors. One by the expansion in real estate. This has been due to some positive economic policies since the Kibaki era, access to credit, tenderpreneurs, devolution and public works which opened up previously inaccessible areas.

Secondly is government policy which seeks to connect as many households, hospitals and educational institutions as possible to the national grid. As a result of this demand for electrical parts from rural households and businesses has positively impacted the business.

Thirdly, but to a lesser extent, has been the on-off security situation in Kenya. The threat of terrorism and even common thieves have seen many especially business units install CCTV cameras. Parts for these are either supplied by specialist CCTV equipment shops or by general electrical shops.

The Future
Although recent data from KNBS generally indicates the growth of the real estate sector has been slowing down specific areas are still enjoying growth. And the shrinking of the sector is not to such an extent that it has slowed the electrical retail business such that it’s not profitable.

Competition in the business will continue increasing. To start with the business has low barriers to entry both in terms of capital and licensing.

Moreover from the outside, the business looks attractive to many would-be an entrepreneur who will then invest in it. And as long as real estate developments occur at whatever level there will be a need for power connections, this is reason enough to attract investors to the business.

Lastly, as long as consumers, be it households or businesses, are connected to power they will need utilities such as bulbs, sockets and switches.

Is it a business to invest in at the moment? Generally yes but where you locate, who you target and how you source will be the specific factors that will determine the success or failure of the business. For the truth is despite the overall rosy picture of the business there are electrical shops which fail and then for a variety of reasons which will be clear as you read this report.
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