How To Start Food Business in Nigeria With Little Capital
HOW TO START FOOD BUSINESS IN NIGERIA
No one expected all this mess, I tell you. No one. My friend Emma just got married in December, and he moved into a new apartment in January in preparation for his growing family. 2020 was supposed to be a good year for all of us. Then April came, and hell blew over. It started in March, but, it was a slow march, and we were all optimistic that it would blow over. In April Emma's wife got pregnant, in April, Emma lost his job and in April, the good year ended.Emma has been searching for a job and battling depression since April. The few jobs he has seen so far are beneath him, and his transport fare is even more than the salaries they are offering. His wife cannot help much because she was working with a private school before the lockdown started, which means that she has been without a job for over some time now. Both of them decided to turn into food business and the results have been tremendous.
Before going into how to start food business with little capital, let's explore the kinds of food businesses available.
Let's break it down to the kinds of food businesses so that you will fall into at least one of the categories. But whichever category your business falls into, whether raw or processed, I can guarantee that as long as you know what you are doing you can get more than 300% return on investment in a short time. Ready? Let's explore.
2. Drinks: selling all kinds of drinks is also a marketable business idea though this may require more capital investment. You can sell beers, wines, soft drinks, gins, bottled water, food drinks, energy drinks, and even beverages in retail quantities to grocery shops and for events.
3. Meal-to-go: Some people do not have the time or skill to cook good food but are willing to pay you to deliver cooked food to their houses. They will pay for the food and the delivery. If you can make excellent Nigerian soups and dishes, you can market this skill to the right people. You can also offer catering services for events and home deliveries.
4. Fish and meat: You will agree with me that these are two of the most sought for in the food market. Almost every household in Nigeria consumes either meat or fish daily. If you could market neatly packaged fish (fresh or roasted), beef, chicken, and turkey to unmarried employed men and women, you will make money in no time.
7. Oils: there is no Nigerian food that does not require the use of oils (whether palm oil or vegetable oils) either as the main item or as a side condiment. There is, therefore, a large market for edible oils. If you focus on selling palm oil and vegetable oil, you may need a personal banker in no time.
Note: The types of food business are not limited to these, but the principles guiding the food business is applicable to any kind of food business.
Having listed all the possible options you can choose from in the food business, the next important question is, how exactly do you start a food business or any business for that matter? I hope the following help:
Read Also: All you need to know about business plan in Nigeria
TYPES OF FOOD BUSINESS
1. Food kiosk : if you are a baker and you can make the common confectioneries with your personal touch then a food shop is a great and affordable idea. You may not necessarily have a kiosk; a shaded area will do just fine. Fast food like puff-puff, doughnut, chin-chin, meat pie, cupcakes, and so on sell like hotcakes (pun intended) especially, when they are located at junctions where people and kids in particular pass all the time.
You can also decide to make and sell Akara, Moin-Moin, fried yam and potato, roasted corn, and roasted plantain (boli). Sell the pastries and confectionery in the morning, sell fried yam and potato, roasted corn and plantain in the afternoon, and sell Akara and moin-moin in the night. Your versatility will even impress people and turn them into loyal customers.
You can also decide to make and sell Akara, Moin-Moin, fried yam and potato, roasted corn, and roasted plantain (boli). Sell the pastries and confectionery in the morning, sell fried yam and potato, roasted corn and plantain in the afternoon, and sell Akara and moin-moin in the night. Your versatility will even impress people and turn them into loyal customers.
2. Drinks: selling all kinds of drinks is also a marketable business idea though this may require more capital investment. You can sell beers, wines, soft drinks, gins, bottled water, food drinks, energy drinks, and even beverages in retail quantities to grocery shops and for events.
3. Meal-to-go: Some people do not have the time or skill to cook good food but are willing to pay you to deliver cooked food to their houses. They will pay for the food and the delivery. If you can make excellent Nigerian soups and dishes, you can market this skill to the right people. You can also offer catering services for events and home deliveries.
4. Fish and meat: You will agree with me that these are two of the most sought for in the food market. Almost every household in Nigeria consumes either meat or fish daily. If you could market neatly packaged fish (fresh or roasted), beef, chicken, and turkey to unmarried employed men and women, you will make money in no time.
You do not even need to have a shop, just form a team of contract butchers who will deliver meat to you on-demand or, you could get the animals killed and carved up yourself. For the fish, you can become a distributor for a fishing company, and also roast them yourself. All you need is a deep freezer with a constant power supply and a good marketing strategy.
What if you don't have a deep freezer? Well there are other preservative methods that could work. Besides, you could strike a deal with your neighbour who always has light and a deep freezer, and pay the neighbour a token to preserve your meet at their freezer.
5. Egg: You can either produce the eggs yourself or buy in bulk from a dealer. It is cheaper to buy in bulk and resell though. You can market it to households by word-of-mouth and social media marketing at little or no cost. You can also submit proposals to restaurants and eateries to supply eggs weekly. The point is that you can sell anything today with a good marketing strategy and quality service. A marketing strategy will bring the customers, and quality service will keep them increasing.
6. Fruits and vegetables: Study your market very well until you find the easiest means to get your products supplied to you. Sometimes, these vegetables waste because sellers are not well positioned to buy it. Locate them and buy from them at reasonable rates (please do not cheat them).
5. Egg: You can either produce the eggs yourself or buy in bulk from a dealer. It is cheaper to buy in bulk and resell though. You can market it to households by word-of-mouth and social media marketing at little or no cost. You can also submit proposals to restaurants and eateries to supply eggs weekly. The point is that you can sell anything today with a good marketing strategy and quality service. A marketing strategy will bring the customers, and quality service will keep them increasing.
6. Fruits and vegetables: Study your market very well until you find the easiest means to get your products supplied to you. Sometimes, these vegetables waste because sellers are not well positioned to buy it. Locate them and buy from them at reasonable rates (please do not cheat them).
People pay more for the packaging more than they do for the good or service. Know your target consumers, market your fresh fruits and neatly packaged vegetables to them, and make a profit without stress.
If you consistently deliver quality goods, your customers will promote your products for you free. Also, we all know how cheap fruits and vegetables are in Nigeria so you can start with little capital. You can always ask those who are already in the business.
7. Oils: there is no Nigerian food that does not require the use of oils (whether palm oil or vegetable oils) either as the main item or as a side condiment. There is, therefore, a large market for edible oils. If you focus on selling palm oil and vegetable oil, you may need a personal banker in no time.
From my findings, the best type of palm oil comes from the east. You can get them in bulk cheaply from local women who are the major producers and you can get them delivered to any part of the country.
8. Grocery store: a grocery store typically sells retail foodstuffs and other household supplies. I am sure that if you stand in front of your house you can count at least five grocery stores in your sight line selling the same items using the same method. Therefore, if you are going to open a grocery store, you had better know how to attract your customers. The profit rate here is quite low; however, it is consistent and spreads over a long period.
8. Grocery store: a grocery store typically sells retail foodstuffs and other household supplies. I am sure that if you stand in front of your house you can count at least five grocery stores in your sight line selling the same items using the same method. Therefore, if you are going to open a grocery store, you had better know how to attract your customers. The profit rate here is quite low; however, it is consistent and spreads over a long period.
While you will need refrigerators, a dependable power supply, and a big shop, you can rest assured that it is highly profitable and can provide you with a steady source of income all year round.
9. Cafeteria: if you can get an official permit to sell cooked food in a canteen, in parks, schools, hospitals, government office complexes, etc., all you need is excellent cooking skills, some furniture, and good customer relations. You can also offer catering services as a side gig.
9. Cafeteria: if you can get an official permit to sell cooked food in a canteen, in parks, schools, hospitals, government office complexes, etc., all you need is excellent cooking skills, some furniture, and good customer relations. You can also offer catering services as a side gig.
10. Farming: If you are thinking this is not for you because you don't have a farm, then your fear might make you to miss big financial opportunities. Firstly, there are different kinds of farming, and to be successful in the business of farming, you have to focus on one particular product - crop farming or livestock farming - if you want to be the best in it.
How to go about it? Well, I would advise modern mechanization and farming methods. Niche farming is more profitable that way Some of the low-cost options for niche farming are:
- Poultry farm
- Fish farm
- Apiary (honey farm)
- Snail farm
- Plantain
- Oil palm
- Maize/cassava
- Vegetables (leaves)
- Tomato
- Pepper
- Cucumber
- Onion
HOW TO START FOOD BUSINESS WITH LITTLE CAPITAL
1. Understand The Business
Being very good at what you do is good, but not enough. Learn everything you can about the product or service you want to sell to maximize profit and minimize risk. Seek sufficient knowledge about the market dynamics of the product you want to sell. How do you do this? Ask questions, meet people who are already in the business, and learn directly from them.
What methods have my competitors been using to get retailers?
Where do my target audience (retailers) go mostly?
What gets their attention the most?
Why should they buy from me?
How can they locate me?
When you ask these questions, they will lead you straight to your retailers. Your retailers are your customers, yeah? So, go get em.
2. Understand Your Market
I understand that you are so passionate about food, talented and skillful in some kinds of food. But dear, it is one thing to learn how to bake, it is another thing to understand who to bake for, when to bake for them or even why.
Understanding your market helps you get result within a short period of starting the business. Here is how to understand your market. Ask yourself the following questions:
- What is the size of my market? (Is it the street, the town, the city, the region, the country or the global market?)
- What age range am I rendering my service to?
- What level income are the customers/client?
- Where do they likely stay at?
- Where can they always be found? etc.
3. Write a Business plan
A business plan is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavour and implement activities necessary and sufficient for the venture to succeed (Wiktionary). In simple English, a business plan is a written document showing;
The sole aim of any business enterprise is to make a profit for which need a business plan. Business plan shows that you are serious about your intentions. Moreover, it helps you to measure your progress and to keep a balanced financial sheet.
- What business idea you want to pursue
- Your goals based on consumer needs and research
- A systematic breakdown on how you intend to achieve your goals
- Who your target audience is; and
- Wow you intend to reach them.
The sole aim of any business enterprise is to make a profit for which need a business plan. Business plan shows that you are serious about your intentions. Moreover, it helps you to measure your progress and to keep a balanced financial sheet.
4. Follow Your Business Plan
Most people go ahead to write a business plan with the sole aim of obtaining loan, grants, etc. This is good and a very good reason for writing a business plan. However, it is not the only reason. Part of your business plan is a detailed explanation of the marketing strategies, market research, target market, etc.
In other words, it is like a map, an architectural design of how your business will take off from where it is to where it ought to be. So, you will make it a lot easier to succeed in your business if you go beyond writing the business to following the written plan of the business. You can contact me for your business plan on +2347080225737 (Call/WhatsApp) or send me a DM on any of @manicleworld social media platforms.
5. Register Your Business
If your business is just a side hustle - something you are not really serious about, then it's fine to ignore business registration. BUT if you see yourself doing this business in the next 3 to 5years and even more...if you see yourself becoming a CEO of this business, employing others to work for you, and making tremendous sales through this same business in the next few years, then sweetheart, thou needest to register thy business. Kin gane? Iwatago? Se o ye e?
How to go about it is simple. You can choose to register it yourself, and you can choose to give to a professional who would register it for you. Personally, I can register business, but I choose to hand over Manicleworld, this consulting company, to our lawyer to register it for us.
Fine, the usual cost for registering is N15,000 according to Corporate Affairs Commission, but I was willing to pay more to have my lawyer do it for me because of some legal benefits backing the business registration.Today, we are registered, and thus even more credible than before. You might want to consider that too. Your choice!
6. Choose a Location
Now, there are two kinds of location. the physical location and the digital location, depending on your kind of food business. Understanding your business well can help you make the right choice in location.
Too many people have jumped into food business ignorantly, opening Twitter account to sell raw food, or renting a shop to start pastries business when they can barely afford to pay their house rent. You don't want to fall into that error.
So, how do you go about it.? Very simple. Ask yourself simple questions:
- What methods have my competitors been using?
- Where do my target audience go mostly?
- What gets their attention the most?
- Why should they buy from me?
If you can answer these, then you will have a clue on the most suitable location for your business.
For physical location, if your target audience is kids and homemakers, then your location should be close to schools and residential areas, and so on. You also have to consider your supplies in choosing the right location. You can start some of these businesses in your house or front of your house if you want to start small.
For digital location, your market analysis would determine which digital platform suits your business best.
7. Find Suppliers
If you are into raw food, you will need people to supply you with foods. Here is a quick trick to pulling traffic to your sales. Look for the nearest farmers to you, within or outside your town/city, and do a deal with them to supply you with products at cheap prices. Then transport it and sell it fresh.
Here is why the method will work: ask a real woman to choose between fresh and preserved food, no matter how much and how cheap the preserved is, most real women would rather go for fresh ones. Just find suppliers that you can trust to give you quality products on time.
8. Find Retailers
On the other hand, if you are into wholesale food business, then find your retailers. Here's how? Ask yourself similar questions I asked earlier above:When you ask these questions, they will lead you straight to your retailers. Your retailers are your customers, yeah? So, go get em.
9. Employ people
You may not need employees at first, but, as sales begin to increase you can enlist family members to work for you. Never be in a hurry to employ anyone to work for you until you are sure it is highly needed in the business. Ensure the business is capable of making enough gain that there is still much left after paying your employee from it.
10. Customer Relationship/Service
Here is the secret to the biggest form of marketing: if you treat your customers well, they will always come back to you. Excellent customer service is the best way to promote your business. Referral is worth more than the costliest advert. But it all begins with a healthy customer relationship and an excellent customer service
Show them that you are more interested in their welfare than you are in their money by delivering quality services, following up on them, listening to them for feedback, offering free added services and your human side. If they are satisfied with your business, they will loyally advertise for you free.
11. Marketing/Advertising
This is not as hard as it sounds. Be innovative with your services and have excellent customer relationships; word of mouth alone will increase sales. Social media marketing is also quite cheap and accessible to your target audience.
Take good pictures and videos with your android or iPhone and use Facebook, WhatsApp, Twitter and Instagram to your advantage. Know which media your target audience uses frequently and leverage on it. Chances are that if you are visible online all the time, you will quickly come to their minds when they need your service.
Bill Gate said once that if your business is not online, you are not in business yet. While that seems arguable in Nigeria, give it some time and you will realize the truth value of the statement.
And if you are not a tech savvy, then you don't need to do it yourself. I can do it for you at a reasonable price. Simply contact me: call or WhatsApp on +2347080225737. Also, if you have any question or inquiry, do not hesitate to ask. You can also give us your comments and contributions in the comment box below.
12. Get your Capital or Seek Funds
This is the part that concerns starting your business with little or nothing. Poeple say it is not possible. My take is, business is not always about having money. It is about being smart enough to know how to have money.
For every incredible business idea you have, there is someone somewhere who is looking to sponsor it. Here is what I mean. Some people don't have the time to think of business ideas and all the strategies involved. All they have is money and they are looking for someone with ideas they can trust and invest in.
A nice way to having nothing in your account and yet kick off your business with huge amount of money is to ensure your food business is feasible and your facts and figures are right. Often times, you will be asked by your investors and sponsors to provide them with a template for your business. When they ask for your business plan, be sure to have one ready. And if you don't, you can contact me for it, like I said earlier.
Interestingly, another way to gather your capital is to talk to close friends and families, especially if you are someone like me who doesn't like loans, and who doesn't mind starting small. It will go a long way, if you are patient enough to start the business with the very little you have.
13. Start
The next step is to start. This is my favorite part. Unfortunately, for some, it's their dead end. I think one of the differences between successful people and people with big dreams is that the latter are always dreaming, while the former are busy taking the first steps, failing, and taking another step, and another, until they succeed. Question: are you a dreamer or an executioner of dreams.
Your next step after reading this article will determine what the answer is.
CONCLUSION
These are hard times, but, the business-smart people are still managing to stay afloat and even build equity. You can do the same by starting where you are. If you wait to be rich before you start making money, how exactly do you intend to become rich?
Take the bull by the horn, build your original idea, seat down and make concrete plans. Then run with it, and you will be surprised how much you will be able to achieve in a short time. This time too will pass, and the wise ones will be the better for it.
Written by:
Solomon Faniran
Take the bull by the horn, build your original idea, seat down and make concrete plans. Then run with it, and you will be surprised how much you will be able to achieve in a short time. This time too will pass, and the wise ones will be the better for it.
Written by:
Solomon Faniran
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