Have you been thinking of starting a frozen food business in Nigeria but you seem confused about how you can go about it and how much capital it will cost you? In this article, I will explain in detail how you can start and how you can start making profits from the business in the shortest period.
The truth is frozen food business will always be a profitable business whether Nigeria is fully developed or not – having 24 hours power or not and this is majorly because of Nigeria’s population. As of the time of writing this article, Nigeria has the largest population in Africa and due to this Nigeria does not have enough frozen food businesses to feed its people.
This means that it needs more passionate entrepreneurs that will open more frozen food business to fill in the remaining space. This is one of the reasons why the frozen food sector is lucrative and why it will always be. There are more demands than supplies.
Capital Needed to Start Frozen Business
Although the capital needed to start a frozen food business in Nigeria usually depends on the prices of equipment, how much you will rent a shop in your area, and how much you will buy your frozen foods. It can be well said that you will need not less than N300,000 – N500,000 to start a small-scale frozen food business in Nigeria.
And the majority of these expenses will go into buying a chest freezer, a generator, and renting a shop for at least a whole year. So you will need to gather this capital and like I usually say it is not advisable to borrow money for businesses like this. This is because the frozen food business usually takes some time (months or years) before it starts making enough profits that will be able to take care of itself without you the owner financially supporting it.
Instead, try to gather the capital yourself. If there is a need to borrow money only borrow about 20% of the capital because this will be easy for you to pay back.
Equipment Needed for Frozen Food Business
Asides from the frozen foods you will be selling in your frozen food business, you will still need equipment to help your frozen food business move smoothly. Below are some of the equipment you will need for your frozen food business in Nigeria.
1. Deep freezers
These are the equipment needed for a standard frozen food business in Nigeria. I listed them out just in case you have the proper list. As for where you can buy them, you can buy them anywhere you feel you can get them all at moderate prices. When you buy them, test them and make sure they are in good condition before you take them home.
Popular Frozen Foods to Sell
You can either sell one of these frozen foods in your frozen business in Nigeria or simply sell all. It all depends on the capital you have.
1. Titus/Mackerel fish
2. Kote fish
3. Panla fish
4. Tilapia fish
5. Chicken laps (orobo)
6. Chicken wings
7. Whole chicken
What is Needed to Start Frozen Food Business
Here are few things you need to start a frozen food business in Nigeria.
1. Unlimited Power Supply
Power has always been a major killer of the frozen food business in Nigeria and it can kill your frozen food business if you do not get prepared for it and look for alternative sources of power. This is what happened to one of my friends that started the business recently.
You have to look for a power that you will use to keep the business going – keeping your frozen foods till customers come to buy them and the best source of power, for now, that is not pocket demanding is buying a generator that can carry your deep freezers.
2. Reliable Deep Freezers
Also in this business, you will need a reliable chest freezer that will keep your frozen food iced and fresh all the time. The ones that will keep your fish frozen for 3 – 5 days are blocked till you are able to power your generator again. Because let’s face it here despite the fact that you have a generator you cannot be putting it on every night to keep your frozen foods frozen. This cost will take a huge part of your profit reducing your profit margin.
3. Good Location
This is the most important thing you need to consider when starting a frozen foods business in Nigeria. You need to consider getting a shop for your frozen food business in a crowded area – a place that thousands of Nigerians pass every day. This can be a popular bus stop or a roundabout or anywhere in your area that is a major spot.
This helps to increase the number of traffic that will be coming to your shop to buy your frozen foods thus increasing your profits in a short while after starting the business. I will talk more about this as we go on in the article.
How to Start Frozen Food Business in Nigeria
Here are steps on how to start a frozen food business in Nigeria. The step-by-step guide.
1. Get the Required Capital
Capital is very important in this business because you need money to buy equipment and you need money to rent a shop. You can only skip this part if you have all that you will need for your frozen food business in place.
However, you can start with anything you have as long as you can buy the basics equipment and your first stock of frozen foods and grow your frozen business gradually. I have seen people start like this and they have starting making money big time. Read our post on how to get funding for your business in Nigeria.
2. Where to Buy Frozen Foods
After getting your capital the next step is to figure out where you can be buying your frozen foods at cheaper prices. The best place, in this case, is to buy from a frozen food company that deals in frozen foods wholesale that are near to you. You can ask any frozen food seller around you for the address of where they buy their’s if you do not know anywhere.
After getting the address, you can visit this frozen food company to check out their frozen food prices if they are moderate enough. To know if they are moderate enough you will need to get the prices of each frozen food you are interested in and compare them to other frozen foods wholesalers. Also, visit other frozen food sellers in your area to confirm their prices. Know how much they sell a kilo of any of their frozen foods and more.
3. Buy Equipment for your Business
We all know the major equipment for running a frozen food business in Nigeria are freezers and a generator but it can be well said that this is truly not the only equipment needed. You will also need a scale and other equipment like a cutlass, knives and more so you will need to buy all these equipment down.
Some of these equipment can be bought new and some of them can be bought fairly-used. It depends on the capital you have at hand.
4. Rent a Shop/Container for Business
When it comes to renting a shop for the frozen food business you need to rent a shop in a populated area, an area where thousands of people pass regularly. I mentioned this earlier because it determines a lot in your frozen food business. It determines how fast you will sell your frozen foods and it determines how fast you will start making profits.
And remember if you start making profits on time the frozen food business will grow on time. So renting a shop at the right location is very important. Also, when renting a shop in an area make sure there is no other frozen food business close to where to to-be shop will be located. This is to make sure you do not have any known competitors in the frozen business close to you.
Another thing you should put into consideration is to make sure the shop you are renting is not too expensive. At least, it should not take more than 40% of your capital as the remaining 60% will be used to buy equipment, frozen foods and to keep the business running till profits start coming in. After renting your shop, furnish it to taste by cleaning, painting the walls, and put all your equipment at the right place.
5. Buy Frozen Foods in Bulk
At this point, you can now go ahead to buy frozen foods. You should locate the frozen companies around you and buy your frozen foods. After buying these foods you can now take them to your shop to stock and start selling. At this point do not forget to always check the frozen foods to know whether they need power to be frozen or not.
Always do these two hours before you close for each day and immediately you open for business in the mornings.
6. Profits in Frozen Food Business
When it is time for you to start selling the frozen foods you need your family, and friends, to be your first customers. These people coming to your shop will attract other traffic (unknown customers) to also buy from you. So at this point, you need to inform your family and friends about your new business adding that you will love that they patronize you anytime they want to buy frozen foods.
After doing this, the next way to attract traffic immediately at your shop is to do something that is eye-popping that is; to play loud music. This will attract passers-by that there’s a new business in the area. Do this for some days and as time goes by because of the location you are your customers will increase naturally. In fact, they will triple.
7. Running your Frozen Food Business
There are a few things you need to always do to keep your frozen food business always going some of these I will list below.
A. Keep Daily Records
In this business where you incur expenses and make profits, it is very important for you to always have a book where you write down everything you buy and everything you sell. You also need to always write your expenses and your profit. This will make sure there are no loopholes in the business.
B. Delay Spending your Profits
It is normal once in a while to take out of the proceeds of the business to take care of your urgent needs but you need to resist the urge to always spend all the profits you make daily. Rather re-invest all profits back into the frozen food business so that it can grow fast.
C. Always Refill your Stock
Do not wait to run out of stock for some specific frozen foods before you buy more. This will discourage your customers from always patronizing you. Always refill your frozen food shop once you realize you are running out of stock.
D. Be Vigilant
There are times when the prices of frozen food increase generally due to some reasons or the order and there are times the prices reduce also. You need to be vigilant so as not to make profits during these times. Always ask other frozen food businesses around for updates on the prices of frozen foods in other not to be left behind.
Frozen food is a profitable business in Nigeria you just need to be bold to know what you want from the business and follow the steps and precautions I have giving and everything should be fine. That is all in this article.
Image Credit to emart.com.ng