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Why Cereals Produce is A Good Business Venture

Vincent Nyoike
Vincent Nyoike Experience

Alice is an entrepreneur in Mwea Town, Kirinyaga County. She started her cereals produce business in 2005 and has grown immensely over the years. She is now a large-scale supplier of grains to many businesses, schools and hospitals in Mwea and Nairobi. In her business, she sells maize, beans, rice, green grams, peas and sorghum. This is her story.

How Alice Started Her Cereals Produce Business

Alice had been a farmer for close to 20 years before starting her cereals produce business. She grew maize and beans and would sell the produce to millers and schools around Mwea town. The returns from her crops were not impressive. Most of the time, she would sell her produce through middlemen take away most of her hard-earned profits even though she was the one doing most of the work. It is then that she decided to take a different approach. She conceived the idea of starting a cereal produce business to sell cereals directly to consumers.

Two years later, she had located suitable business premises for her cereals business. She rented a store for Ksh 10,000 and her first stock was her farm produce. She also started buying produce from farmers who didn't like prices offered by middlemen. It put her in a better position to purchase more produce. Also, she made sure that she paid farmers in cash and immediately after purchasing from them.

She buys grains directly from farmers and sells them to consumers. Her main customers are schools and hospitals. Through her store located in Mwea town, she sells produce to small scale consumers for household consumption.

Read also: How I almost lost Ksh 30,000 in poultry farming.

Revenues from Alice's Cereals Produce Business

Alice says she enjoys being self-employed compared to being employed. Her business generates average revenue of Ksh 180,000 per month. January is usually the best month of her business. It is because most schools make orders for the year at that time. With the revenue, she meets her business expenses and pays her employees.

Through her business, Alice has managed to buy a truck and a pickup. She uses the truck to transport produce to large scale buyers and pick up to collect produce from farmers. The business has employed four direct employees. She has a storekeeper, two drivers and a casual laborer. Most of the time, she is out in the field buying more grains, or she is in schools applying for tenders to supply produce.

Challenges Alice Faces in Her Cereals Business

Alice's biggest challenge is with delays in payment from her large scale buyers like schools. She notes that institutions take a long to pay because of delays in money remittance from the government. Sometimes she goes unpaid for 8 months. This is a big challenge since she is left with no money to run her business. In most cases, she is forced to borrow loans from banks to meet her business' operations. Her advice to those who wish to start cereals and produce business is to sell grains to institutions only when their businesses can survive without the payment for a prolonged period.

The other challenge her business faces is during dry weather. When there is minimal rainfall, there is usually a significant drop in cereal produce quantities. This affects her business since the prices of produce increase, forcing her to buy and sell at a high price. Customers shy away from purchasing produce when prices are high. To deal with the challenge, she travels to Eldoret, which is far to buy cereals. She had to cater for transport costs, which are usually high.

The other challenge she faces is with storage facilities. Her produce sometimes gets attacked by weevils and rodents. Also, when there is a lot of rain, sometimes her cereals get wet due to dampness and she has to employ people to dry ist in the sun. She has also started stalling the maize on shelves to avoid placing sacks containing cereals on the ground. 

Read also: How my retail shop changed my life for good.

Alice's Plans to Expand Her Business

Alice plans to expand her business and start large scale maize and rice milling business. She notes that she has large scale supplies from farmers and wants to start selling finished products like maize flour. It is a great opportunity for her business. This way, she can process rice and maize and stock them in her store. This will help her reduce business expenses of buying finished products at higher prices. Besides, she can also start supplying maize flour to schools where she supplies cereals.