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 or large scale, depending on the demand for maize flour and maize supply.
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 is 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 the competition. Look also at the supply of 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 for the business. Writing a business plan will help you prepare for unforeseen circumstances.
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- 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.
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 large-scale, you will need more sophisticated machinery. You will need to learn how to operate the machinery. You may also need additional equipment and skills, like in weighing and packaging.
Also read: How to start a fast food business in Kenya.
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, and 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 and safety requirements.
Cost of Starting a Maize Milling Business in Kenya
You can start a small maize milling business with about Ksh 100,000 for a small diesel-powered machine that goes for about Ksh 85,000. To start a large scale maize milling business, you will need at least Ksh 500,000. The following is a breakdown of start-up costs for a small posho mill business:
- Maize mill - Ksh 85,000
- Business licenses - Ksh 7,000
- Rent – Ksh 10,000
- Electricity or diesel – Ksh 10,000
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.
How Profitable is the 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 middle-income areas can earn you a profit of over Ksh 20,000, while large-scale posho mills can earn you over Ksh 100,000 in a month.