LPG (Liquefied Petroleum Gas) has become essential requirement in most households. LPG retail business a profitable venture with the rapid urbanization. There will be even more demand for cooking gas as the urban population increases. Cooking gas is clean energy and convenient for cooking compared to firewood and charcoal.
LPG Business in Kenya
The gas business in Kenya is growing fast with urbanization and due to its efficiency. If you are thinking of starting a cooking gas business in Kenya, this is what you need to know.
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First, you need to pay attention to the following:
- Cooking gas business location
- Rules and regulations governing the sale of cooking gas
- Safety and precautionary measures to take
- How to manage LPG retail business
Draft a Business Plan
A business plan is essential for the success of any business to lay down the objectives. It is an important control tool. Therefore, you need to design a good cooking gas business plan. It should focus on startup costs, business location, market segmentation, risks, strengths and weaknesses.
You can hire a professional to help you write your LPG retail business plan. You will need a business plan when looking for investors or bank loans to start your business.
Read more: How to write a business plan.
Raise LPG Business Startup Capital
The size and location of your cooking gas retail business will determine the startup costs. You can opt to secure a loan for your LPG startup, use your savings, or get funding from friends and relatives.
If you do not have enough startup capital, you can look for partners and start an LPG retail partnership.
LPG Retail Business Startup Costs
The following are the startup costs for a cooking gas retail business in Kenya.
- Premises rent and deposit -20,000
- Single business permit - 10,000
- ERC license - 3,000
- Gas supply stock - 50,000
- Metallic grill for storage - 20,000
- Weighing scale - 2,500
- Fire extinguisher - 10,000
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Register Your LPG Retail Business Name
You need to ensure that you are operating a legal business. As such, you need to register your business. With a registered business name, you can work with corporate, schools and restaurants. You can register your business name using the E-Citizen portal.
Secure Business Licenses and Permits
Once you have registered your business name, you need to get the necessary business licenses and permits to operate your cooking gas business.
Single Business Permit
You need a single business permit to operate any business in Kenya. You can get the permit from county government offices. Prices vary from one county to the other, but it is roughly Ksh 10,000 annually.
Energy Regulation Commission License
You need to apply for an ERC license. Indicate your business location and LPG supplier. You must also meet the safety and precautionary measures like having a fire extinguisher and have proper storage facilities for the gas cylinders.
Weight and Measures Certificate
You need to secure a weights and measures certificate once your LPG retail business meets the weights and measures requirements. As such, you need to have a digital weighing scale to measure all the cooking gas cylinders' weights. Ensure they meet the necessary weights before selling them to customers.
You must meet precautionary measures like having a fire extinguisher to get a fire license. You can get the fire license from the county government offices at a cost of Ksh 3,000.
Secure a Good Location for LPG Retail Business
An LPG retail business should be located in an accessible and visible area. You need to have enough storage space for the gas cylinders. Essentially, you need to display the gas cylinders in a metallic grill in an open space.
Ensure that the business location is secure and that the metallic grill is lockable to avoid losing your gas cylinders to thieves.
Secure Reliable LPG Suppliers
You need to find a reliable cooking gas supplier in the market. If you can get supplies from cooking gas companies, it would be best. You will get supplies at lower prices allowing you to set a reasonable profit margins to attract customers.
Some of the cooking gas suppliers in the Kenyan markets include the following.
- KenolKobil (K-Gas)
- Total Kenya
- Hashi Energy
- Proto Energy
- National Oil
Equipment for Starting Cooking Gas Retail Business in Kenya
You need the following equipment to start the cooking gas retail business.
Digital Weighing Scale
It is crucial to secure a weigh scale to measure the LPG gas cylinders' weights before selling them to customers. It is a great way to make customers return to your business for a refill when the cylinders meet the necessary measurements.
LPG gas cylinders are available in different quantities. 3 kg gas cylinders are demand in low-income areas, while the 6 kg gas cylinders are fast-moving and common in middle-income areas. 13 kg gas cylinder is in demand in high-income areas.
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It is necessary to have a fire extinguisher to get a license to operate a cooking gas retail business in Kenya. It is a precautionary measure against fire outbreaks. Make sure to hang the fire extinguisher near the entrance of the gas cylinder store.
Advertise Your LPG Retail Business
You need to attract customers to your cooking gas startup. You can use various means to attract customers, like setting lower prices compared to your competitors. However, you need to be aware that the Energy Regulation Commission sets the prices of cooking gas. As such, prices keep on changing.
You can promote your business by issuing business cards and the use of posters. It is always best to stock posters near entrance points of residential buildings and marketplaces. Indicate your business contact details so that customers can call you whenever they need a supply.
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You need to offer free transport services to succeed in the cooking supply retail business. Customers will call you and provide you with their location for deliveries. It is a sure way to get and retain customers for the retail cooking gas business. I hope this has helped you know how to start gas business in Kenya.