Starting a cooking gas business in Nigeria is one idea you can never get wrong. It is a booming industry, with billions of potentials waiting for entrepreneurs like you.
What determines the profitability of a business is often demand, and LPG comes with orders that are over the chart. You heard me! Over the chart!
This business will make you a millionaire in Nigeria, and you’re also helping save the planet by delving into this incredible business idea.
It helps mitigate problems such as deforestation, cuts down on the emission of carbon dioxide, which harms the environment, and even more.
This business automatically makes you a superhero entrepreneur who makes money by taking care of the environment at no cost.
But to start a gas business in Nigeria, you will need a lot of things in place. Most notably, the capital, since this business is somewhat capital intensive.
Do you know the intriguing aspect? None of the things needed to start this business is impossible to get. You have to be determined enough to start this lucrative gas plant business.
When you make up your mind, nothing can stop you from starting that dream business of yours.
Since we have a lot to cover in this guide, let’s begin!
Table of Contents
- How To Start A Cooking Gas Business In Nigeria
- The Profitability Of Cooking Gas Business In Nigeria
- Gas Plant Business In Nigeria – Success Tips
- Over To You
How To Start A Cooking Gas Business In Nigeria
1. Business Capital
Before starting any business in Nigeria, the first consideration should be the cost of a startup. The only downside of this business is its capital intensiveness.
If you’re going to start on a small scale, you’ll need to budget at least #3,000,0000, especially since LPG tanks are costly.
Source for a business capital shouldn’t be a hurdle. As an entrepreneur, numerous avenues are open to you, and they include:
- Personal savings
- Family & Friends
- Bank Loan
- Business grants, etc.
There are numerous sources on the internet claiming you can start this business with #300,000, #400,000, or even #500,000.
Sorry to burst your bubble, you will need much more than that. I was in contact with a Chinese company that supplies LPG tanks a while ago.
Getting 2 ton of LGP tank cost over #3,000,000. I was able to browse some more and guess what, I even found one of #19,000,000.
If you want to start incredibly small, I recommend buying one or two bigger sized gas cylinders.
Overall, starting a cooking gas business is capital intensive. But don’t lose the sight of its profitability, which tends to cover the cost in less than a few months of startup.
When you embark on market research, you will get an idea of the equipment needed to run this cooking gas business.
With this information, you will get the exact amount you need to start this business.
2. Great Business Location
The prerequisite for a successful cooking gas business is ensuring you’re in a business good location. In this case, you need to be in proximity to residential areas.
If you’re far away from your target market, it might affect your revenue, which is something you don’t want.
But when you’re close to residential areas, you become the only option for residents to fill their gas cylinders.
Due to the hazards involved, you will need to obtain a permit before you can begin operation.
If you’re in a place like Lagos, Abuja or Port Harcourt, your chances are huge since the demand for LPG is rocket high in such areas.
Besides proximity to the target market, you also want to make sure that your location is not a known notorious point.
There have been cases where robbers are known to terrorize businesses in odd locations. Imagine losing your business revenue to hoodlums.
It would help if you considered security and proximity before you established a gas plant business anywhere in Nigeria.
That way, you have nothing to worry about.
3. Register Your Business
Irrespective of how much you hate the sound of it, you can’t run away from this. The reason many Nigerian entrepreneurs dread from this is because of the protocols involved.
Years ago, you will need to walk into numerous offices before you could even get the right body in charge of business name registration.
However, everything is no longer the same. Today, you can easily register your business in the comfort of your home.
As long as you have a computer system and an internet connection, you have nothing to worry about.
Registering your cooking gas plant business will help you build a strong brand for your business. Furthermore, you become eligible to open a business bank account.
Since you’re registering an LPG plant, you will need permission from the Department of Petroleum Resources (DPR).
If you can work with a lawyer, it will readily help you to avoid defaulting in any existing laws.
4. Build Your Infrastructure
Your structure is mostly dependent on how big or small you want to start. To many entrepreneurs, they want to start small and grow from there.
In that case, they might not even spend beyond #500,000 for a startup. All they need for a smooth business operation will be a shop, a couple of cylinders, and a scale for measurement.
But if you’re starting a medium or large scale gas plant business, you’ll need a bulk storage bottle for gas storage.
Also, your business will need an open refilling bay since the accumulation of LPG can be hazardous. But when there is a free flow of fresh air, such occurrence is less likely.
You cannot run a gas plant business all by yourself, so you will need to build a small office where administrative and cash transactions occur.
When it comes to filling, numerous technologies help you with this. If you’ve refilled your cylinder before, then you will notice that they use a pump.
It looks similar to the ones used in petrol filling stations. With this gas pump, your workers can easily punch the kilograms (KG) a customer needs and deliver.
Another option is the weight sensing equipment that determines how many kilograms of gas that has been dispensed.
By working with an LPG gas plant design and construction company, rest assured you’ll love the final look.
5. Employ Skilled Workers
If you want to run a successful cooking gas business in Nigeria, you’ll need skilled individuals.
At the minimum, here are some of the workers needed in your gas plant business.
- Security guard
- Accounts officer
- Technician, etc
If you have time, you can fill in some roles and help move your business forward. When recruiting workers, it is best to work with a recruitment agency.
You don’t need to employ your families or friends in your business unless they have the skill.
By all means, avoid trying to bring in sentiments as it will ruin your business. Hire people only because they have the skill and passion, not because you owe them a favor.
A vital factor to consider when employing someone is the experience. For safety reasons, the person must be someone who has worked in a gas plant before, especially the technician.
6. Marketing Strategies
The dream of every entrepreneur is to make more revenue and increase the customer base. But that won’t be possible without some marketing strategies.
At the infant establishment of your gas plant business, no one knows your business. In that case, you have work to do.
There are numerous ways to get your target market to notice you, and the number one strategy is making conscious efforts to build a brand.
It entails having a professional-looking logo, slogan, and some color theme for your brand.
Aside from branding, other ways include social media marketing, TV or radio adverts, newspaper ads, etc.
You might even need to consider home deliveries since it is something your competitors aren’t doing. By delving in this angle, you distinguish yourself from the competition.
When you make a sale, instruct your cashier or account officer always to get your customer’s mobile number.
Your customer’s mobile number should be on your copy of the receipt since it helps you build a database of your customers. With this, you can disburse bulk SMS that notifies them about a new promo or deal.
If the mobile number doesn’t sound appealing, maybe you should consider their email addresses since they are somewhat cheaper.
With the right marketing tips, growing your cooking gas business to the point of success is possible.
No matter how big you become, marketing should be active every hour of the day.
There are lots of companies in Nigeria. Despite how gigantic they have become, they still run numerous ads and advertisements.
That is to show you that no matter what, marketing never ends. Despite how popular coca-cola is, the company still spends millions of dollars on marketing every year.
The Profitability Of Cooking Gas Business In Nigeria
The profit you generate lies on how big or small your gas plant business is. However, the average profit on every 12.5kg gas cylinder is #800.
Take note that this can change since prices are always fluctuating, all thanks to the dollar. But no matter what happens to the dollar, a filling gas plant business remains profitable.
If you’re in a good location with a robust marketing strategy, you will be making more than #300,000 every month.
It would be enough to pay your workers, run some maintenance with some change remaining.
As you keep pushing forth in this business, your revenue will gradually rise as your customer base increases.
With dedication, you might be able to expand and even begin sales of associated items like:
- Empty gas cylinders
- Gas burners
- Hoses, etc.
Running a gas business in Nigeria isn’t always pleasant, but you will pull through with patient, perseverance, and zeal.
The reason most businesses in Nigeria fail is often lack of patient or zeal. If you can beat that, there will be nothing standing in your way.
Anyone can start an LPG supply business, but not everyone ends up pulling it off. It needs an entrepreneur who is not ready to take a calculated risk…
Gas Plant Business In Nigeria – Success Tips
1. Business Plan – Before you kick this business off, ensure you have a gas plant business plan. With this, you will get a detailed overview of how the industry works.
2. Get Training – Getting training from a gas plant company or even depots for six months or more will help you. That way, you get practical knowledge of how the business works.
3. Safety – Do not forget that you’re dealing with inflammable products. That means you always need to take safety precautions.
4. Competitive Price – If you’re selling higher than your competitors, your customers will feel ripped off. Even if your competitors are miles away, maintain the normal price.
5. Customer Service – To succeed in the gas business, you need to take customer service to a new height. That entails making sure that your workers are excellent and friendly.
6. Marketing – Marketing is the backbone of your business, and you mustn’t joke with it. Through it, you’re able to expose your business to targeted audiences.
Over To You
What is stopping you from starting this lucrative cooking gas business in Nigeria?
What is your pain point?
Use the comment box, and I’ll guide you.
If you’re pretty new to this business idea, that means you need guidance – a business consultant.
In that case, you’re on the right page. I work with a reliable Chinese firm that deals with all the equipment and materials needed to start a gas plant in Nigeria.
Besides getting this crucial equipment, I will offer some outstanding insights that will ensure you never go wrong in this business.
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In that light, good luck!