Are you thinking of starting a business in Nigeria and cooking gas business has come to your mind? What set out plan do you require to succeed in establishing and running a profitable cooking gas business in Nigeria? How profitable is the business in Nigeria? If any or all of these questions are in your mind then, this article is for you.
Note: This plan is not only for Nigeria. It can apply generally in the business industry in any location or country.
WHY CHOOSE COOKING GAS BUSINESS
1. High Demand: Currently cooking gas is perceived as the most widely used means of cooking in Nigeria due to the high cost of the other alternatives such as kerosene. it also has the advantage of being a cleaner way of cooking with apparently no side effects. Even low income families now own small gas cylinders which they refill often. So, when properly situated close to a residential area, sales are guaranteed.
2. Government Influence: Currently, Governments around the world including Nigeria are strongly warning against deforestation given its effects on the environment/ecosystem. This makes the era of firewood gradually fizzling away, Thus making Cooking gas a ready alternative. This has contributed in making a cooking gas business an ever expanding profitable business in Nigeria.
3. Side Effects Of Alternatives: Stories of kerosene explosion because of poor quality/adulterated product is no longer news in Nigeria as it now happens frequently. Researchers have over and over again reiterated the side effects of being exposed to smoke from firewood.
All these make use of cooking gas a must for many families and the business very lucrative.
4. Cost: Compared to the cost of the other alternatives such as firewood and kerosene, cooking gas is comparatively cheaper when the advantages of clean cooking and side effects are factored in.
5. Profit: At the smallest retail level of gas business, a profit of N50 per kg is estimated. This means that with at a sale of 100 kg gas per day, you will make N5000 . This gives you a total of N150,000 in a 30 day month.
6. Minimal Start up Capital: While wholesale gas business will certainly take millions of naira to start because of so many regulatory requirements, a small retail cooking gas business may take as little as N250,000 to set up.
Cooking gas business plan in Nigeria
1. Form: When thinking of establishing cooking gas business in Nigeria, you need to first decide on the form it would take ie whether wholesale or retail. This however depends largely on the start up Capital you have.
2. Location: Location is a very important factor to consider in establishing a gas business. For a wholesale business, it should be situated at least some 15 metres away from buildings.
The business should located close to buildings where households use cooking gas. This will help to guarantee sales as gas finishes without notice and would need to be refilled as urgently as possible. This is the most important factor while setting your business plan.
3. Training: Given the high risk of fire incident occuring in a cooking gas outlet, there is need to obtain some basic training on handling of gas, fire extinguishers and safety precautions. Also you need training on getting a good quality gas because this willl help you retain your customers as they notice that the gas they buy from you lasts longer than ones purchased elsewhere. This will make your business plan more effective.
4. Government Regulation: The activities of Cooking gas businesses in Nigeria is regulated by the Department of Petroleum Resources (DPR). It licences operators, both wholesale and retail operators. Many operators currently in the country however operate without being properly licenced which is not encouraged.
Even though many retailers find it more convenient and profitable to transfill ie LPG cylinder to cylinder re-bottling. Refilling and decanting is prohibited by Department of Petroleum Resources because the business is highly hazardous and a threat to lives and property of the people. The Agency rather encourages retail operators to sell full gas cylinder either through cylinder exchange or a new one instead of trans-filling. This should be well considered wile setting up your cooking gas business plan.
Cooking gas business in Nigeria is one of the most profitable businesses in Nigeria given that the demand is currently high and increasing for obvious reasons of cost, health and safety. One with limited startup capital can start with retail option which takes less capital to start and possibly expand to wholesale option. To succeed in the business attention needs to be given to training of the operator, the location and Government regulations issued through the Department of Petroleum Resources (DPR).