See Below How To Start LPG Business In Nigeria’
It is a fact that cooking gas retail shops are springing up everywhere, but the demand is increasing at a faster rate, so before the demand equals supply it will take a while. Recently the government stopped subsidizing kerosene; this has seen its price soar into the skies literarily. Kerosene users are looking for an alternate source of cooking. Especially in the urban areas and this is where you come in.
You don’t need millions to start up this business, with less than 400,000 naira; you can comfortable set up this business.
Apart from finances, which is very important, certain other inputs are needed for this business; they include
You’ll need LPG cylinders between 12.5 kg and 90kg capacities. Depending on the size of your shop you can have maybe twenty 12.5kg cylinders, or five 45 kg cylinders, or even 20kg cylinders. It depends on your space and your means of transportation to a gas plant. For 45kg cylinders and above you’ll need a car or maybe a KekeNapep to transport you to the gas plant. A second hand 12.5 kg gas cylinder would cost about 7000 naira. If you have a bigger transport you can buy the 90kg cylinder as it would save space in your shop. You can procure these cylinders from gas plants. It is advisable you do so, to create a relationship with your suppliers. According to those in the business, an average of 500naira is made as profit on every 12.5kg gas that they sell. So if you sell maybe five 12.5kg bottles a day, at the end of the end of the month you will be making over 100k,and this is a very conservative figure. If you have your business in a densely populated place you’ll definitely have more than 5 customers a day. You can also reduce your price to attract customers or offer free home delivery services to boost your customer base. You’ll also need a scale or two, to measure the weight of the cylinder as you sell it. An industrial hose also is needed; this is to transfer from your cylinder, to that of the customers.
You need to know how to fill the gas cylinders of your customers, change valves, and learn to connect gas cylinders to various kinds of cookers. The only places where you can acquire these skills are at an existing gas retail shop or gas plant. If you are familiar with the person you could learn this for free or at a very subsidizes price. You are acquiring a skill and don’t be surprised when you are asked to pay, or if the fellow refuses to teach you out rightly. Especially if the person fears you would be a competition. Your internship doesn’t have to last long, if you are really serious and a quick learner you can have learnt all the technicalities in less than a month.
You’ll also need to learn where and how to buy gas, where and how to get the best prices and also how to differentiate high quality LPG gas from low quality. These skills are useful as they could mean the difference between success and failure. They can be learnt from whoever you inter with. You don’t need to be at your place of skill acquisition full time. Of course this depends on the relationship between you and the retailer. You should be able to go out for your other hustle, but make sure you are around in the evenings. These are peak business times as this is when people have the time to refill their cylinders. Therefore you can learn a lot at these peak times. Weekends are also very good times for learning.
Make sure your ear is to the ground as there are sometimes price fluctuations in the prices of cooking gas. This happens especially in the absence of the product in the market. Some weeks ago, an NLNG vessel could not dock at the Lagos port to deliver gas therefore there was a price hike. The price is coming down though as the product comes into the market. Timely information as this can put you at an advantage in your business.
As in every business, you have to consider your prospective market and let it decide where you can set up your business. You should have your business location in a densely populated part of town, a residential area where middle class to the rich live. For example an estate is a very good location for this. Fewer low income earners use gas. So you should target the middle class. Another place to set up this business will be in an area that houses tertiary institution students. About 90% of students who live in off campus accommodations use gas. Due to the ease of use and the cleanliness, and probably the image it gives them. As students occupied areas are densely populated, you might want to consider such places. Just make sure your business is situated in a location where your prospective market can afford the product. You don’t need a big shop, all you need is a well ventilated space and a space to put in your things at the end your business day.
If you hope to procure a loan you might also want to consider registering your business. Most small scale business are not registered are not registered with the government, so if you are not registered well, you won’t be the only one. It’s advisable that you do though, and follow regulations laid down for gas retail businesses.