There one common problems with almost all third world countries and Nigeria isn’t left out, Nigeria being part of the third world countries also partake in this common problem and that’s inadequate power supply.
For a business to strive and be profitable, they ought to be at least a steady power supply to some certain degree. As Nigeria is till building and developing its power sector. Starting a cold room business is one hell of a good business to venture into as there are small scale enterprise that need to preserve their perishable goods.
Cold room business are profitable especially when one target the right customers in a good location with a good managements. In today’s article I will show you how you can start a cold room business without much worries and stress.
What are Cold Rooms?
Cold rooms are enclosement, which can be a standard room or just a space that has a refrigerator attached to it and is capable of retaining cold air. Cold rooms can differ based on the type, size and the purpose of their construction. Generally cold rooms are built to store either perishable goods or to keep consumable items cold.
Cold room differs as I had said earlier, there are some that can be as big as a room, insulated and with rack of shelves, hangers along the roof (to hang items such as meats) and others that can be a normal room with refrigerators line up.
In this articles, we will focus on the later one, this kind of cool room is suitable for start-ups and small scale enterprise as it is affordable and can be easily built.
Steps in Starting a Cold Room Business
Remember that this business is suitable in areas where there are lots of markets or in a major market and even in areas of poor power supply – as many people will patronize your services just to keep their consumables goods cold and refrigerated.
Always remember that the business goal here, is to provide your services to commercial marketers to preserve and keep their commodity cold.
The following are steps to take in to consideration when venturing into this business.
You need to get a room or shop closer to a market or in a market and there is no better way to achieve than to do a market survey. When looking for a shop you ought to keep your eyes open for areas with optimum power supply and good security –as we don’t want people breaking into your shop.
When doing this market survey, don’t forget to swallow your fear and ask if there are any competitors within, so you don’t get knock of business early or have difficulties attracting potential customers.
Buying the Equipment
This is the tricky parts and the expensive part too, you do not want to spend so much money buying loads of equipment’s that you would probably won’t use in the nearest future that’s why I said start small and slowly grow your business.
The equipment you would mainly need are as follows:
- A scale weigh
- Containers (4 litters or lesser)
- Some Chairs and tables
- A Television set (optional)
- Registers (Note Books)
You need a generator set, but before you buy a generator please check the voltages of the freezes you would need, you need a generator set that can carry those freezes and other appliances without breaking down due to over load.
Ideally, many people would have gone for a brand new ones, that’s good, but in order to save some money you can go for the fairly used one (second hand). These one can last a longer time before developing any fault, while consuming lesser gasoline.
Chest freezers are great and can do the job as they can retain cold air as well as refrigerating very fast. For a start you can get 2-3 depending on your start-up capital and preference. You should meet a technician (fridge and freezer repairer) and tell him what you want to do with the freezers and he might recommend a good brand or a fairly used one which can be nice and long lasting.
They are a must so as to be able to use your freezers without any issue, based on the voltage of the freezers you bought, these stabilizers should be able to step down or step up the voltage of the current so as to power the freezers without interruption.
You need a scale to measure the quality of item you put in the freezers. Remember each freezers have a maximum threshold of item (in kilogram) they can carry.
You don’t want to over stack a freezer with items and reduce the freezing rate or even under stack the freezers and waste precious resources cooling it –as there will be fewer item to keep cold.
Containers (4 litres or lesser)
The purpose of these containers are to store water which you would put in the freezer, you might be wondering why you should put containers with waters in a freeze. The reason is so that when the freezer is freezing up, it will automatically freeze the water and in scenario of low or no power supply the iced water in the container will gradually melt while keeping the freezer cold –this is a very effective way of saving resources such as fuel to power the generator when there is poor power supply.
Chairs and Tables
These are essential as you would need to entertain your customers, that either comes for enquires or to deposit or collect there item. The quality you would need depends on the available space in your shop.
This is optional and totally depends on you and your finances cos it might be a good idea to have a better way to entertain your customers and yourself too.
The registrar will be use to record the items that each customer brings into the cool room and the item leaving as well as other financial records –you can record a customer’s name, address, shop number and the item he brings into the cold room with the quality and the weigh same goes when an item is leaving the cold room.
Marketing your business is a very essential and is the best way to reach your potential customers and clients, your targeted customers are people who have perishable good and need to have their commodity refrigerated such people are people that sells ice cream, drinks, meats, fish, etc.
Marketing your products to them can come in various ways such as:
- Printing flyers and hand bills and approaching them one or one
- Do a rally, this may be expensive and but nay be effective depending on how you do it
You can approach people and offer them a discount in exchange for your services when doing your marketing campaign.
How to Run Your Business
This is a critical decision that you have to figure out on our own along with your business plan in place. You can decide to segment each part of the freezer to hold a different commodity, for example one of the freezers might hold drinks while the other might hold foods stuffs and another meats and fish.
Cost of getting the equipment will definitely differ based on your location. But based on estimate, you should be able to get a generator set for ₦80,000, a chest freezer for ₦70,000 each and a stabilizer for ₦5,000 each. The rent of your shop is based on location but an estimate of ₦7,000 monthly seem fit, with the above price an aggregate will cost ₦389,000, we will approximate everything to ₦400,000.
We have done a rough estimate that with a ₦400,000. You can set up a cold room business in Nigeria.
Another factor we will to consider is “how much to charge your customer for the item they bring for you to refrigerate”. As a start-up you should be able to offer a better price to your customers so as to retail them in the future.
You can charge in two ways: monthly bill or daily bill:
Monthly billing maybe good for those who have a large stock of item they would love to keep at the cold room.
Daily charging rate may be suitable for those who bring little item for preservation over the night.
In other to maximize your profit you should charge per kilogram example ₦250 per kilogram brought to the cold room.
You can make enquires from any of your competitors around before setting the price
Keep in mind that you should be able to make enough to cover the price for petrol would spend monthly and make enough for profit to cover monthly expenses.
Starting this business might see stressful and capital intensive, but if probably planned like how I outlined in this article then it will be easier and less tense for you.
I believe in starting small and scaling up high than to start big and be wasting resources and the same principal should be applied in the business.