How to Start a Cereal Business in Kenya
Cereals business in Kenya is a profitable venture with a ready market. Food-related businesses rarely lack customers, even during tough economic times. Starting cereals business is not expensive since you can start small and expand your business. You can source cereals produce directly from farmers to save on costs. This is what you need to get started with the cereals business in Kenya.
Research the Market
You need to find a good place to set up your cereals and produce business in Kenya. Also, identify fast-moving cereals and produce in the market. Get to know potential customers for your business. Among them include boarding schools, hotels, maize millers and households. See what works best for you.
Identify a Business Location
It is best that you set up your business in a busy location or fast-growing towns like Mwiki, Kenol, Mtwapa and Ruai. You can get business stalls in such areas at relatively low prices. Also, in such areas, people depend highly on cereals produce for livelihood, creating a demand for cereals.
Identify Cereals Produce Suppliers
You need to find reliable cereals suppliers for your business. Look for reliable cereals produce suppliers near you. Consider their prices, reliability and if they offer transport services. However, most successful cereals produce sellers in Kenya buy cereals from the Western part of Kenya like Bungoma and Eldoret in wholesale. They then transport these cereals using trailers.
Related: How to start a maize mill business in Kenya.
Identify Types of Cereals in Kenya to Sell
It is good that you first identify the most profitable cereals in Kenya before you can buy stock. This will help you avoid buying slow moving stock which may end up going bad before you can sell it. You can stock cereals like beans, maize, rice, wheat, sorghum, millet, green grams, and flour. Among the varieties include:
- Rice: Basmati, Pure Pishori, Pakistan, Sindano and Brown Mwea
- Beans: Yellow beans, Gituru, Wairimu, Nyayo, Rosecoco, Mwitemania
- Green Grams: Ordinary, Makueni
You can stock other cereals like wheat, oats, barley, sorghum, corn and millet, depending on the market demand.
If you are in Nairobi or its surroundings, a good place to source cereals is Nyamakima. If you near rural areas, you can source produce from local farmers. Those near Mwea can source most of the produce there at wholesale prices. When getting cereals and produce supply, you need to be very cautious. Make sure that grains are well dried, failure to which they will spoil.
Acquire Cereals Business Licenses
You need business permits and licenses to get authorization to operate cereals produce business in Kenya. You need a single business permit to run cereals and produce business. The permit costs around Ksh 10,000 every year and you can get it from County Government offices. However, the prices vary from one county to the other.
Cereals Produce Business Startup Costs
To start small cereals and produce business, you need to invest at least Ksh 20,000. The best practice is to start small and increase your stock as the demand grows. Also, with large stock, the produce can quickly get spoilt before your business gets customers.
Storing cereals produce stock is essential. You need to have a storage facility that is near your cereals shop. Also, avoid storing grains on the floor. It is likely they will absorb moisture from the floor. You should get a carpenter who can make for your strong stands to support up to 10 sacks of cereals.
Make sure that all the cereals are dry before storing them. When you get supplies from suppliers, from time to time, make sure to dry them. Also, put in place measures to keep away rodents like rats that can eat significant stock. Also, you need to know how to arrange a cereal shop. You need to adopt a professional cereal shop design in Kenya so that it looks neat and organized.
How Much Capital to Start a Cereal Shop in Kenya
The cost of starting a cereals business in Kenya depends on the size of your business, type of cereals you intend to sell and where you are sourcing them. You need at least Ksh 30,000 to start a well stock cereals business in Kenya.
Read also: How to start tents and chairs leasing business.
Is Cereal Business Profitable in Kenya?
Yes. Cereals produce business is one venture that is less affected by economic hardships since food is essential and people have to eat. However, your business location can determine how much profits you can make. Generally, cereals business makes 35% profit of the total sales. This means that the higher sales you make, the higher the profits.
Challenges Facing Cereal Business in Kenya
If you are planning to start a cereal business in Kenya, it is important that you be aware of the following challenges and prepare for them:
- Poor storage facilities
- Cereal gets eaten by rodents like rats
- Inadequate cereals produce during dry weather
- Lack of enough capital