In Nigeria, the food industry is quite lucrative, just like the provision industry. It is the kind of business that can be quickly launched. Foods like beans, rice, garri, crayfish, etc. are fast-selling food items, but they must be preserved properly to prevent deterioration and financial loss. The majority of Nigeria’s wealthy businessmen got their start in the food industry.
Food can be purchased and sold in retail establishments, public spaces close to residential areas, open markets, and even online. Everyone with a strong interest in business can establish this enterprise.
Your level of entry into the business will be based on how much funding you have. You can establish a food distribution or wholesale business if you have a significant amount of money, such as ten million naira. With little money, however, you are limited to purchasing from wholesalers and selling to merchants and customers.
Why Start A Foodstuffs Business In Nigeria?
Check out some of the reasons listed below if you’re wondering why starting a foodstuff business in Nigeria is a good idea:
• There’s a huge demand for it
One of the few goods we absolutely require is food. There are very few families in Nigeria that can go for more than one day without eating rice. The human body needs food to keep its organs operating properly.
• It can be done anywhere
Yes, you heard me correctly; the food business can be conducted wherever, no matter the location. If you live in a city or a rural area, you can still sell your goods and make a good profit.
• It can be done any season
The food industry is not like the fruit industry, which is influenced by the season. You are always welcome to purchase food in bulk from wholesalers and sell it at any time of the year.
• The enterprise will bring in money for you.
Every business owner wants to generate a decent profit, and working in the food industry will assist you. Despite the fact that this is not a “get rich quick” scheme, you will be content with the profit rate at which your business is expected to grow after a few months of operation.
Is Nigeria’s foodstuffs industry profitable?
Yes, the food business is incredibly lucrative and may drastically alter your life if you are willing to put in the effort to convert nothing into something, this is the short and easy answer to this issue.
A logical person would also wonder why the food industry is profitable, but let me tell you that no matter the state of the economy, it doesn’t matter how hard we have to work to earn food; what counts is that we eat at least twice or three times every day.
The food industry is one of the industries that will never go out of business, particularly in Nigeria, where there are an estimated 200 million people and a fast-growing population. These 200 million people consume food every day. Even though there are currently a lot of people in the company, there is still a lot of demand since there must be more vendors to satisfy the needs of more than 200 million people in the country.
Steps to Starting Foodstuff Business in Nigeria
- Obtain capital for your foodstuffs shop
Obtaining business funding is the first step in starting a food-related business. It is preferable to self-fund the firm rather than borrow money to do so. However, if you absolutely must borrow money, make sure to do so from a reputable source or a lender that you are confident won’t bother you every day.
There is no set amount needed as startup capital for the food industry or the raw food industry. However, if you want to start a small-scale food business in Nigeria, you can do it with between N500,000 and N1,000,000 in funding.
You’ll require between N2,000,000 and N5,000,000 on a medium scale and between N10,000,000 and above on a huge scale. When addressing the capital requirements for any business, we frequently express scepticism.
This is due to the fact that starting a food business, for instance, in a rural location will demand a different amount of cash than starting a similar business in an urban area.
The startup capital requirements for a food business will vary even across two nearby cities or towns. The best course of action is to determine the prices of food goods outside (within your area).
- Do Market Research
Market research is the next stage to starting a successful food business. In addition to the information we’ve provided in this post, you’ll still need to conduct your own market research into the food industry. This is crucial because market prices for food goods fluctuate daily, making it impossible to rely on historical prices.
Once more, prices differ from one place to another. We always advise readers to conduct their own marketing research on any companies we discuss on our website. Therefore, while we work to provide you with all the information you need to launch a successful food business, conduct your own market research and familiarize yourself with the current trends in the market.
- Hire a Store or Warehouse
Renting a reputable shop is a crucial step to consider when beginning a food business. Renting a quality store is crucial since you cannot afford to expose your products to hazards that could cause them to spoil or be damaged.
It is advisable to rent a warehouse rather than a store if you plan to start a wholesale food business. You will be able to purchase bulk food items in this room without worrying about them spoiling.
Additionally, you should make sure that the store is shielded from pests and rodents that can ruin a lot of the food as well as sunlight that can deteriorate the food. When renting a space for a food business, the following factors should be taken into account:
Good placement: Where you locate your food business depends on the firm’s location. It must be a key location within a bustling open market or a residentially congested region. Because it greatly affects how clients may find your business, a good location is essential. Your store should be situated in a key area, where thousands of the people you anticipate will pass each day.
Money for Shop Rent: after choosing a nice location, think about how much you’ll have to pay in the beginning. The majority of the time, this money is deducted from your capital; therefore, it should not exceed 15% to 35% of your capital. For instance, if you have N1.5 million set up for your food business, your annual rent for your store cannot be more than N350,000.
Shop Space: Is there adequate room in the shop? When the company starts to expand, will it be able to hold more food in the near future as well as bulk food now?
- Purchase food in large quantities.
Selling all varieties of food is actually impossible unless you are certain that you are capable of handling every aspect of it. When he first started out, even a business tycoon like Dangote did not sell all kinds of food. With little food supplies, he began. So you might begin by stocking up on a few foods in large quantities. So that you may be certain you’re getting the best deal, purchase from a manufacturer or wholesaler. Bulk food purchases guarantee a significant after-sale profit margin.
- Stock up your shop
You should take additional care while replenishing your food store since how you arrange your food will affect how long it will keep for you before going wrong. Food that is properly stored in your store will last a long time and be sold in good condition.
Be sure the floor is sufficiently dry before storing or stocking your store. Avoid setting the food on the ground and count each item as you load it to ensure none went missing during transportation.
- Start your sales
At this point, you should inform your friends, family, and neighbours about your new company so that they can start using your services as soon as you open. You can hold “an open business ceremony” to introduce the public to your culinary business.
Again, you might lower the price of food items in comparison to your rivals to attract more potential clients. For instance, if other vendors charge N800 for a bottle of red oil, you may begin by charging N750. More people will visit your store as a result of this.
The profitability of the food industry
Yes! You will make a significant profit whether you start small or big if you get into the raw food business in Nigeria. But the more cash you put into the company, the more money you’ll make.
You cannot compare the success of a food business that someone started with N400,000 with N1,000,000 investment (One Million). The guy who starts with N1 million will undoubtedly profit more than the person who begins with N400,000.
You can, however, start off little or huge. If you can’t afford it, resist the urge to start out big. Start the business now with whatever resources you have and expand it.
In Nigeria, one of the successful industries is the food industry, but for you to succeed in your venture, you must use the right positioning strategies. You must also keep reinvesting your profits in order to expand your firm.
Additionally, to prevent damage from rodents and pests, make sure all openings in your store—on the floors as well as the walls—are sealed off. This will prevent rodents from entering your store and causing damage.
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