Maize milling business is a profitable venture in Kenya, with many people relying on agriculture. Maize is the commonly grown food crop in Kenya. A posho mill business can thrive well in towns and rural areas. You can start a flour milling business on a small scale or large scale depending on the demand for maize flour and maize supply.
If you are planning to start a maize milling business in Kenya, this is what you need to know before you can get started.
Do a Market Research
Before you can start a maize mill business, you need to consider several factors. For instance, the type of maize mill you will install, either diesel powered or electricity powered. The business location will determine the posho mill to install. If it is a business location without electricity, you need to install a diesel powered maize mill.
Also, consider the demand for maize flour and competition. Look also at the supply for maize. If the supply is high, then you can start a large scale maize milling business.
Write a Business Plan
A maize mill business plan should highlight the things you found out in your market research. It should have startup costs, target customers, business location, demand for maize flour, the supply of maize, marketing strategies, competition, risks and strengths of the business. Also, a good business plan should have cash flow projections of the business. Writing a business plan will help you prepare for unforeseen circumstances.
Read more: How to write a business plan.
In-depth market research will help you identify a good business location. A good business location for a posho mill should be near highly populated areas where people rely on agriculture.
Most small scale maize mill businesses thrive well in low income and middle-income areas. In these areas, posho mills rely on customers who come to mill maize for their subsistence use. However, you can start large scale posho mills in a densely populated area and supply maize flour to shops and supermarkets. Before deciding, consider the supply of maize and the demand for maize flour.
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Learn the Milling Process
You need to know how to mill maize. There are different types of maize mills and they all require some skills. The milling process and the demand for maize will determine the kind of machinery to install. You can hire qualified personnel to operate your maize mills.
If your maize mill business is a large scale, you will need a more sophisticated machinery. You will need to learn how you can operate the machinery. You may also need additional equipment and skills like in weighing and packaging.
Secure Business Licenses
To operate a maize milling business, you need to secure the necessary business licenses. You need a single business permit that goes for Ksh 5,000 annually. You also need a health certificate since you will be dealing with maize flour for human consumption. A health professional will come to inspect your premises to ascertain if it meets the health requirements, you will be issued a health certificate.
If you are milling maize on a large scale, then you need KEBS certification. The certification is meant to ensure that the maize you mill is fit for consumption and meets health safety requirements.
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Purchase and Install Flour Milling Machine
You need to purchase the maize milling machinery. Depending on your business plan, you can buy a diesel-powered or electricity-powered maize mill, depending on power availability. The demand for maize flour will determine the kind of machinery to buy.
Maize milling machines come with different grading levels. For instance, machines that sift maize are more expensive. Once you have bought the machinery, you can now launch your business.
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Market your Maize Milling Business
You can market your maize milling business using posters, business cards, and word of mouth. You can visit farmers and tell them about your business. If it is a large scale business, you can start buying maize from them. If it is a small scale miller, then they can bring maize for milling to your business.
Cost of Starting a Maize Milling Business in Kenya
The cost of starting a maize mill business will determine the kind of machinery you intend to buy and its size. However, if you want to start a small scale maize mill business, you can purchase a machine for Ksh 70,000. These are the startup costs.
- Maize mill – Ksh 70,000
- Business licenses – Ksh 7,000
- Rent – Ksh 10,000
- Electricity or diesel – Ksh 5,000
How Profitable is Maize Milling Business in Kenya?
Maize milling business is a profitable business, especially if you have many customers. Price setting will also determine your profits. If you are in high-income areas, you can make huge profits. Small scale posho mills in the middle-income areas can earn you a profit of over Ksh 20,000 while large scale posho mills can make over Ksh 100,000 profit in a month.