How to Start Foodstuff Business in Nigeria

Foodstuff business in Nigeria also known as the raw food business in Nigeria is a lucrative business. It is a profitable business because it was the business that made Aliko Dangote a millionaire in Nigeria. The foodstuff business or grain business is a daily income business in Nigeria and because it is a daily income business this means that you will make money every day, day in day out, week in week out.

Foodstuff business is also a lucrative business in Nigeria because it has to do with goods Nigerians cannot do without every day. Every day Nigerians must eat. We need to eat food not just to fill our empty stomachs, to give us strength but also to nourish our bodies and make us grow.

If there are no foodstuff businesses in Nigeria it is bold to say that Nigeria will soon go into famine. The food industry is a big industry in Nigeria. Asides from the fact that you can have direct customers who buy raw food from you for direct consumption that is to buy and keep at home for eating.

We also have the food processing industry where manufacturing industries like cassava processing plants, plantain processing plants, and other companies that are into animal feed production will also buy from you. So you can see whether you are going into the raw food business in Nigeria directly or indirectly you.

Or you are going into it with a small capital or big capital you will make big profits. However, how big the profit is is related because the more capital you invest in the business in Nigeria the more profits you are going to yield from it. You cannot compare someone that started his or her foodstuff business in Nigeria with N500,000 with someone else that started with N2,000,000 (N2M).

Obviously, the person that started with N2M will make more profits than the person that started with N500K. But if you are interested in starting a foodstuff business in Nigeria you can start small or big. Do not be pushed to start big if you cannot afford it. Do not go and borrow money all in the name of starting big. Start with whatever you have and grow the business.

Besides you need to gather experience even while you are in the business to be able to handle larger contracts when they start coming. This was what Aliko Dangote did during his humble days. He discovered he was passionate about buying and selling so he first started buying and selling sweets to his mates in school and also was helping his uncle “Dantata” in his shop back then to sell foodstuffs.

He took his time to fully understand the business when he was with his uncle and assisting him and after seeing what it will be like in the now and in the future – understanding everything about the foodstuff business from his uncle as regards buying the grains, sugar, and every other foodstuff his uncle sold.

He borrowed money from his uncle to start his own foodstuff business and now he is the richest man not only in Nigeria but in Africa. I will share more of Aliko Dangote’s success story in this article as we move on because I believe understanding his story is what will really help you turn your foodstuff business in Nigeria into a million naira business.

Asides from his story of how he used his foodstuff business in Nigeria to become a millionaire. I will also share some personal tips I have gathered from foodstuff dealers in Nigeria on how to keep the business going in terms of food maintenance and bills. If you are interested in trading grain or foodstuff in Nigeria then you should read this article to the end.

Digest everything before you fully start the business.

Is Raw Food Business Profitable?

Really, how profitable is the foodstuff business in Nigeria? I have shared some of this slightly in my introduction but I feel I should share more reasons why the raw food business is profitable. The first reason why raw food business is profitable in Nigeria is that you will be buying in bulk and selling in small quantities.

This always happens no matter the capital you use in starting your foodstuff business in Nigeria it just depends on how much small quantity you sell. The second reason is you can sell to people who want to cook the foodstuffs immediately what we call direct consumers and you can also sell to people who want to resell the foodstuff when it is cooked.

Example: buka, restaurants, and joints Another reason why the foodstuff business is lucrative in Nigeria is the fact that it has a short life span. Although this is also a disadvantage to you, it is an advantage to you because your customers will not be able to retain foodstuff for a long time thereby always having the need to buy from you all the time.

Foodstuff is not a buy once and for all kinds of goods. Finally, it is a profitable business because even the waste products of the foodstuff are useful. You can also make money from the waste products of your foodstuff by selling it to people who buy agricultural waste in Nigeria. Also, it can be sold as animal feed to those who rear animals. Examples are those in goat farming, cow farming, ram farming even poultry.

Getting Capital Needed for Foodstuff Business

The best way to start your foodstuff business in Nigeria is to self-fund the business but if you don’t have such capital at hand and you really need helping hands make sure you borrow the money from reliable people you know will not disturb you about the money on a regular basis.

It is one thing to borrow capital to start a business in Nigeria it’s another thing to be able to sleep at night without worrying that one day your debtor might want your head (figuratively). Aliko Dangote was wise about this which is why he borrowed the money to start his foodstuff business from his uncle.

He could have gone somewhere else – maybe the bank or perhaps a stranger but he went to his uncle. He went with the saying “the devil you know is better than the angel you don’t know”. This choice is entirely yours to make.

List of Foodstuff to Sell

When it comes to starting a foodstuff business in Nigeria there is a list of foodstuffs you must sell. This is because are high in demand. Nigerians love these foodstuffs because they can use it to cook different foods.

1. Rice

2. Beans

3. Corn

4. Guinea corn

5. Garri (White and Yellow)

6. Semolina

7. Wheat

8. Yam

9. Cocoa yam

10. Potato

11. Irish Potato

12. Yam Flour (Elubo) 

13. Dried grinded Pepper (Ata gungun)

How to Start Foodstuff Business in Nigeria

These are the steps on how to start a profitable foodstuff business in Nigeria.

1. Do your Market Survey

Yes, this is important. Asides from all the information I will be sharing with you in this article you still need to do your own findings as regards this business. As we usually say no knowledge is wasted so can we say as regards this business that no finding as regards this business is wasted?

In as much as I try my best to share everything I know about a topic when I am writing an article on it, I still believe I am not sharing it all. Somehow my writing may be short on one point or another that’s why I usually encourage my readers to do their findings asides from what they have read on the blog.

Doing your personal findings is important. Who knows? You might even be able to share points I have missed in this article in the comment and we can all learn. Doing your own findings does not only add to what you know, but it also gives you live information because this time around you are in the field.

So my best advice here is if you can visit any of the raw food shops around you and tell them you want to know all they know about the business please do. They might be reluctant at first to share but I am sure if you tip them – give them some money they will give in and share with you.

As they share this information it might be best for you to jot them down for future reference. Do not rely on your brain as it is not built to remember but to create. After gathering – doing your personal findings and gathering all the information you need you can now proceed to the next step.

Read our article on how to conduct market research for new and old businesses.

2. Get your Capital Needed

There is no specific capital needed to start a foodstuff business or grain business in Nigeria. But with that been said it does not mean you can start with any amount you have. So on average, to start a foodstuff business in Nigeria you will need a capital of N400,000 (N400K) – N1,000,000 (N1M).

We can also say the specific capital also depends on so many factors like if the area you want the business to be is a rural area (a village type of setting) or an urban area (a city kind of setting), how big you want to start and so on. But just in case you do not have enough capital read our article on how to get funding for your business in Nigeria.

3. Rent a Shop to Sell Foodstuff

Foodstuff shop for your foodstuff business is very important because you cannot afford to expose your foodstuffs to things that will make them spoil on time. When you rent a shop for your foodstuff business, you are able to protect your foodstuff from rain which can cause massive spoilage, from the sun which is not also good, and lastly from rodents.

I will talk more about how you can prevent rodents even in your shop later in the article because this could also happen to your foodstuffs even if they are in your shop. If you want to go into foodstuff business wholesale I will advise you to rent a warehouse instead of a shop. The massive space will allow your foodstuff to breathe and will always give you the opportunity to buy more foodstuffs without fear.

4. Considerations Before Renting Shop

There are many things to consider when renting a shop for your foodstuff business in Nigeria.

A. Consider Location

You need to consider location and this is because it has a lot to do with how customers can easily locate you. When it comes to choosing a location you need to consider where thousands of likely customers will pass every day. It is at this kind of location or area you should rent a shop.

B. Money for Shop Rent

After deciding your location, you also need to consider how much you will pay for rent at least for the first few months. This money is often taken from your capital and to make it logical it must not pass more than 20% – 30% of your capital. For example, if the capital you have set aside for your foodstuff business is N1M this means the money for the yearly rent for your foodstuff shop must not exceed N300K.

C. Consider Shop Space

You need to consider the space also. Is the shop spacious enough? Can it contain your foodstuff now and will it be able to contain more foodstuff in the nearby future when the business starts growing? These are the 3 main factors you need to consider when renting a shop in Nigeria for this business.

5. Buy your Foodstuff in Bulk

It’s impossible to go into the sales of all types of foodstuff unless you are sure that you can really handle every part of it. Even Aliko Dangote did not go into the sales of all foodstuffs he specialized in some. However, here is the list of foodstuffs you can buy and sell in your foodstuff business in Nigeria.

Some of these foodstuffs are grain foodstuff while some are tuber foodstuff and lastly pepper. When you are ready to buy them you need to make sure you are buying it from the right source – a trusted customer who has built his or her reputation over the years and has gathered experience.

This customer must be a wholesaler of foodstuff so that the foodstuffs you will be buying from him or her will be at their lowest prices. This is to make sure you have a bigger profit margin when you finally start selling too.

6. Stock Foodstuff in your Shop

When it comes to stocking your shop with foodstuffs one needs to be extremely careful because how you place these foodstuffs will determine how long they will last in your shop before they start spoiling. If foodstuffs are well placed in your shop or store they should remain in good condition till you sell them.

This is why when you are about stocking your shop you are to make sure the floors of the shop or store are dry enough and you should not place the foodstuff on bare ground but on planks. The best planks I have seen shops around me place their foodstuff on pallets – the wooden pallets that come with goods from the seaports.

These wooden pallets are bought from ports and laid on the floor before placing the foodstuffs. Also, make sure the foodstuffs are not resting on the wall so that when rain falls water will not spoil the foodstuffs. After proper placement of the foodstuffs in your shop the next thing you should do is to do an inventory of all the foodstuffs.

This is to make sure all the foodstuffs bought are complete and none was missing during transport.

7. Start Selling Foodstuff

At this point, you can inform your friends and family about your new business so that they can start patronizing you from day one. Also because of where you are located, you will be able to start selling your foodstuffs immediately after you open. To draw people – potential customers closer to you, you can reduce the price of your foodstuffs a bit.

For example, if a paint of garri is sold for N500 in that area you can sell your own paint of garri for N480. This will attract the traffic of customers to your shop. Also, develop a good relationship with your customers. This was one of Aliko Dangote’s strengths.

He was able to keep customers for years and because of the way he treated them these customers also brought their friends to buy from him.

8. Raw Food Business Ideas

There are many raw food business ideas in Nigeria you can try. Here is the list.

A. Grinding of Foodstuffs

You can make extra profit in your foodstuff business by grinding foodstuff for your customers. Foodstuffs like yam flour, plantain flour need to be grounded before they can be consumed. You can diversify your income by doing this. Read our article on how to start grinding business in Nigeria.

B. Production of Poultry Feeds

Another raw food business idea in Nigeria is the production of poultry feeds. All you need to start this is to buy the machines needed and a space to install the machines for production. Read our post on how to start animal feed business in Nigeria.

C. Sell Waste Products of Foodstuffs

I mentioned this earlier. You can also go into the business of selling waste of foodstuffs to people, and companies that need them.

9. Profits in Foodstuff Business

There are different ways to increase profits in your foodstuff business in Nigeria. Some of these are:

A. Re-invest your Profits

After reading Aliko Dangote’s biography and how he made his millions selling foodstuffs to Nigerians I would say one of the reasons why his business grew so rapidly is his ability to always re-invest the profits of his foodstuff business back into his business. He did this for a long time and at some point he had enough money and was able to import these foodstuffs into the country by himself.

This made him the author and finisher of his foodstuff business in Nigeria. You should apply this method too if you really want your foodstuff business to grow quickly.

B. Diversify your Foodstuff Business

I just mentioned all these ideas. All you have to do is to choose which of them you want to go into. But mind you doing this will cost you more in some of the foodstuff business ideas. An example is diversifying into the production of animal feeds.

Conclusion

When it comes to starting a business like a foodstuff business in Nigeria, you have to properly plan on how your business will grow if possible, have branches, see into the future, and aim higher like Aliko Dangote. Do not be driven by your everyday profit and therefore remain stagnant.

And one more thing make sure your shop or warehouse for your foodstuff business is rat-free so as not to incur loss unexpectedly.

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