Milk is one of the essential products in a family. Many people use it to prepare tea while others take it raw. The demand for milk makes the milk business a profitable venture to start in Kenya. To succeed in it, it is best that you start it in areas where milk supply is scarce. In this article, I will take you through how you can start a milk business in Kenya.
Write a Milk Distributorship Business Plan
To ensure that your milk business starts and runs in the right direction, it is crucial to develop a detailed business plan however small the business is. This business plan act as a guideline and reference for the future of your business.
Your business plan will answer questions like how many litres you will sell per day, where you will sell your milk, and how much money you will need to start and run the business. Including your finances and cash flow in your business plan will help you set a fair selling price for your product.
Read more: How to write a business plan.
Find Milk Business Location
A strategic location for your milk business will play a critical role in the success of your business. It is best to start your milk business in shopping centers or major towns where there is a high population. A milk business premises should be well lit and ventilated, and have a steady water supply.
You can make more profits by selling milk in areas where it is not readily available. You can start a milk business in Kisumu, Nairobi, North Eastern, Nakuru, Ukambani and Mombasa where milk is not readily available.
Identify a Reliable Milk Supplier
Finding a reliable milk supplier is important to ensure that you have enough to sell and meet your expenses. You can get find large scale dairy farmers who can be supplying you with milk. Make sure that the milk is fresh and not mixed with water.
They are reliable and have favorable prices. Finding a milk supplier who sells milk at low prices will help you set fair prices and leave you with significant profit margin.
Secure Milk Business Licenses
You must have business licenses and permits to operate a business in Kenya. Among the requirements for a milk business include:
- Single Business Permit: It can obtained from county offices. The cost depends on the size of your business and the county in which you want to operate. In Nairobi, for example, you can get the license from City Hall and it will cost between Ksh 7,000 and Ksh 15, 0000.
- Public Health Certificate: It ensures that the business adheres to cleanliness and standards of hygiene especially if you are handling foodstuffs. A county official will visit your business premises to inspect and if he is satisfied, he will issue you the certificate.
- Kenya Dairy Board (KBD) Permit: The license will cost about Ksh 5, 000.
Cost of Starting a Milk Distributorship Business in Kenya
Capital is one of the main things to consider before launching any business. The startup costs will depend with the size of your business and the customers you intend to serve.
You need between Ksh 350, 000 and Ksh 400, 000 to start a wholesale milk business. You can start a small milk distribution business with Ksh 50,000 and expand it with time. The following is the startup cost breakdown for a medium milk business:
- Business rent – Ksh 15, 000
- Business Licensing – Ksh 20, 000
- Renovation and branding – Ksh 10, 000
- Milk pasteurizer machine – Ksh 250, 000
- Stock – Ksh 15, 000
- Marketing – Ksh 20, 000
After identifying an ideal business location and a business premise, you will need to renovate the room by installing shelves and counters. Branding your business premises will help make it visible to potential customers.
Launch your Milk Business
When everything is in place, you can start your milk business. It is important to maintain high standards of hygiene to avoid milk contamination. Offer exceptional customer service will help to retain your customers and bring more customers to your business.
Marketing your Milk Business
After dealing with the basics of starting a milk business, it is time to market the business. You can never make profits if people do not know that your business exists. You can distribute flyers, pamphlets, and brochures to passersby or stick them in public places.
Alternatively, you can market your business on social media or create a website. This way, you will reach many people at the same time. Another perfect way to market your business is by offering exceptional customer service. Your customers will definitely recommend your milk to their friends and family.
Is the Milk Distributorship Business Profitable in Kenya?
Yes. Surveys show that the average profit you can make per day from a milk business is between Ksh 5, 000 and Ksh 10, 000.
Unpasteurized milk costs Ksh 35 per litre. You can then pasteurize the milk and sell it at Ksh 90 per litre. If you buy and sell 200 litres of milk per day, you will make Ksh 18, 000. This makes a profit of ksh 9, 000 per day.
On the other hand, you can decide to buy pasteurized milk for Ksh 50 per litre. If you buy 200 litres in a day and sell each litre at Ksh 90, you will make Ksh 18, 000. This generates a profit of Ksh 8, 000 per day. Therefore, the milk business is a profitable venture.
Read also: How to start chips business.
Summary of How to Start Milk Dairy Shop in Kenya
Although the milk business is naturally lucrative, you will need to go the extra mile. Offer excellent customer service and always ensure that you maintain high standards of cleanliness and hygiene. Employing smart marketing strategies will keep you ahead of the competitors. It is that easy to start a milk distribution business in Kenya.