Hello followers, welcome to our CEREALS BUSINESS TRAINING.
Am Vincent and I will be taking you by the hand and showing you how to start, grow and profit from Cereals Business.
Africa is a hungry continent and you can never go wrong if you invest in food business.
Everyone needs to eat and the escalating rate of rural to urban migration means more new mouths to feed every day.
That is why the idea of starting a cereal business is a good one.
This is one of those businesses that you can start with as little as Ksh.20,000 and scale up to Ksh.1,000,000 in a year if you play your cards right.
Note: When we talk about cereals we mean dry grains e.g. maize, beans, green grams, groundnuts etc. Not breakfast cereals like corn flakes.
Cereals business in Kenya is among the top lucrative business that a common mwanainchi can venture into. It requires minimum skills and also a minimum capital to run this business.
One should be equipped with the basic skills so as to be able to manage this business until it turns out successful. These skills will help you invest more without losses.
Perhaps you are stranded on how to start cereals business in Kenya. Well we got you covered because this training is rightfully meant for you.
We have prepared a program or schedule on how our Cereals Business Training will be conducted.
Our Cereals Business Training will take 22 days (Monday to Friday, excluding weekends)
We will be educating/teaching you from 9.am to 2.pm by posting Articles, Images, Videos and PDF documents. And from 2.pm to 7.pm the group will be open for discussions, questions and answers.
*NOTE*: The training won’t affect your daily schedules. You can access all the information posted in the training group at your own free time.
Also our Cereals Business Training will be on weekdays only, Monday to Friday, excluding weekends so that those who will be busy during the weekdays can catch up with our training over the weekend.
Below is a schedule of what will be learnt each day of our training.
- DAY 1: Introduction to Cereals Business (Is Cereals a Profitable Business in Kenya?)
- DAY 2: Fast moving Cereals and Various kinds of Cereals Business you can venture into.
- DAY 3: Selecting a suitable Location for your Cereals Business
- DAY 4: Writing a Cereals Business Plan
- DAY 5: Cereals Business Registration, Business Permit & Licenses
- DAY 6: Breakdown of Capital needed for a Cereals Business
- DAY 7: Stocking your Cereals Business & List/Contacts of Cereals Distributors in Kenya
- DAY 8: How to Start, Grow and Profit in Cereals Retail Business (Part 1)
- DAY 9: How to Start, Grow and Profit in Cereals Retail Business (Part 2)
- DAY 10: How to Start, Grow and Profit in Cereals Wholesaling Business (Part 1)
- DAY 11: How to Start, Grow and Profit in Cereals Wholesaling Business (Part 2)
- DAY 12: How to Start, Grow and Profit in Cereals Importation Business (Part 1)
- DAY 13: How to Start, Grow and Profit in Cereals Importation Business (Part 2)
- DAY 14: How to Start, Grow and Profit in Cereals Farming Agribusiness (Part 1)
- DAY 15: How to Start, Grow and Profit in Cereals Farming Agribusiness (Part 2)
- DAY 16: How to Start, Grow and Profit in Cereals Processing and Milling Business
- DAY 17: Cereals Pricing Strategies
- DAY 18: Cereals Marketing Strategies
- DAY 19: Management of your Cereals Business (Employee Management, Stock Management, Theft Management e.t.c)
- DAY 20: Challenges, Do`s and Don`ts in Cereals Business
- DAY 21: My Proven Strategies on how to Grow and profit in Cereals Business
- DAY 22: Conclusion of our Cereals Business Training
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.
Some of the fast moving products out of a cereal shop include:
Beans: Nyayo, Rosecoco, Yellow beans, Mwitemania, Butter Beans, Gituru and Gachuma varieties.
Porridge Flour: Baridi, Wimbi, Mawele, Mtama, Ndimu.
Green Grams: Ordinary, Nylon, Makueni, Lentils.
Nuts: Njugu Mawe, Groundnuts.
Rice: Pure Mwea, Thailand, Pakistan, Sindano, Fivestar, Basmati, Brown Mwea.
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.
HOW TO GET STARTED
1. Identify a supplier. We have suppliers in places like Nyamakima in Nairobi. As the business grows, try to avoid middlemen and source directly from farmers. Go to rural areas and strike good deals with farmers.
2. As you do your research, compare prices from different suppliers and source from the ones selling at a lower price. Consider factors such as logistics. Also ensure that the cereals are completely dry when purchasing.
3. It is also wise to buy cereals such as maize during high seasons because the prices are lower then.
4. Start with the fast-moving cereals such as rice, beans, porridge flour and green grams. You can do a research in your area to know cereals that sell fast.
5. You don’t need to have a lot of money. Start by buying small amounts of the cereals, sell and increase varieties and quantities with time. If you can’t afford a shop, start selling from your house or a kibanda.
6. Base your shop in a strategic location or in a densely populated place. In this digital age, think about using online platforms such as Facebook and sites like jiji.co.ke to reach more customers.
7. On storage, cereals must be stored in dry places to avoid rotting. You must also ensure that the area is free of rodents.
The profits you make from cereals business will highly depend on where you buy your stock and how you market and sell to your customers. Build connections with institutions, hotels and organizations that need cereals in bulk.
The cereals business operates best on a “buy low-sell high” basis. You need to do your proper research and identify places that you can source for cereals cheaply. Then compare these prices with what the local wholesalers/retailers are selling.
For example the best place to source for cereals cheaply in Nairobi would be nyamakima. A good place to source for pishori rice would be mwea. At first you may need to identify traders who sell cereals (like in nyamakima) but in the long run it’s always better to cut off the middlemen and go for the cereals from the farmers themselves.
One thing to also look out for would be seasons. It wouldn’t be wise to purchase maize during the low season since the prices are very high at this point and when the farmers start harvesting you will be left with stock that is not moving. Always buy during the high season when prices are cheap.
It is likely that the first days of opening the shop will be dry days in terms of few customers.
But instead of sitting in the cereal store and whining the whole day, the best thing would be to start by visiting institutions around you.
Make friends with the caterers, give them a good deal and they will gradually become your customers.
Apply for tenders from local organizations also.
As for the day-to-day customers, sell to them on a cash-only basis – avoid selling on credit. From our research, credit sales are the main cause of failure for small cereal and wholegrain outlets.
How Much To Invest
Ksh.20,000 – Ksh.80,000
How Much To Expect
Returns vary depending on where you buy your stock and how aggressively you resell it. On average you get 25% net profit.
But you first need to identify an ideal (preferably residential) location. This should be a place that is densely populated.
Places like Githurai, Mwiki, Ruai, Kamulu, Thika Makongeni, Mtwapa – generally you want to open a shop in an area that is densely populated preferably with people of the lower and upper middle class income levels.
A good room with enough foot-traffic in these areas can cost you anything from Ksh.5,000 to Ksh.20,000 per month rent.
But before you rush to invest there is just one more thing you need to do – a FEASIBILITY STUDY.
What is a Feasibility Study?
A feasibility study is simply an assessment of the practicality of your proposed business idea. For instance, if your business idea is about cereals business then your feasibility study will involve determining the capital requirements, competition and market availability.
For example, if you are a farmer in Kilifi, Kenya, you will want to understand the market situation for your cashew nuts business. Likewise, if you are preparing to start a cereals supply business in Nairobi you have to get the inside scoop of the business before you start.
This is the most important study you will ever have to do in your life. And you don’t have to hire an expert to do it for you… we have broken it down into three super easy steps.
STEP ONE: ANALYZE THE BUSINESS IDEA
This should always be the very first stage of your study. Look objectively at your idea and determine how lucrative it is. This is how you do it:
1. Potential Market Size
Let us say you have picked the idea of supplying cereals to schools. At this stage, you need to ask yourself if there is market for your commodity and if yes, how big it is.
2. Competitive Advantage
What makes you a worthy competitor in the market? Do you have more experience than other players in the industry?
In other words you want to figure out what makes you unique in a potentially crowded market place. Also, find out if anyone else has tried your idea, and if they failed – why?
3. Assess Capital Requirements
Luckily for you, we always give a rough breakdown and capital estimates for each idea we teach about. But besides that, you need to do your own research to get the real picture. Keep a small notebook where you can note all the specific cost outline down.
STEP TWO: A DEEPER ANALYSIS OF THE MARKET
Now that you are satisfied that your idea is a good one, it’s time to take a closer look at the market. You goal at this stage is to determine what exactly the market needs and how they want it done.
1. Find the Differentiating Factor
A differentiating factor is simply that one thing that makes you attractive to customers. Ask yourself, why will customers want to purchase my products instead of my competitors?
Is it because I can deliver faster than others or is it because I have better pricing methodology?
What gap have your competitors left so that you can fill?
Once you add a differentiating factor to your product or service, you will have an easier time penetrating the market.
2. Market Barriers Analysis
A market barrier is something that prevents you from entering a certain field of business at any one time.
For instance, there is a barrier to starting a chemist shop since you have to get the approval of the Pharmacy and Poisons Boards.
Look within your industry and see if there are any barriers that bar you from entering. Luckily, most cereals business fields don’t have barriers to entry.
3. What Makes Your Competitors Successful?
In every business there are competitors and learning what makes them successful is the surest way to get an inside scoop of the market conditions of your idea. So once again, keep a closer eye on your potential competitors so that you can fine-tune your game-plan.
STEP THREE: FINANCIAL FEASIBILITY ANALYSIS
By now, given that you have done idea analysis and a bit of market survey, we assume you have sufficient information on the nitty-gritty of running your cereals business.
So let’s now show you how to do the very last stages of a feasibility study.
Estimate The Start-up Cost
The start-up cost comprises the cost of setting up the business (e.g. renting a room, painting it, branding it etc.) and the initial working capital (i.e. the money you put into the business).
Determine if your savings will be sufficient to start the business. If not, then look for a loan.
Basically, the entire cost of starting up should be made up of:
– Cost of setting up the shop/working area
-Cost of buying equipment
-Cost of acquiring licenses and certificates (e.g. Single business permit, health and hygiene certificates among others)
The working capital comprises of:
-Cost of buying stock
-Cost of initial promotion of the business (For instance, you can choose to start your business with an offer price)
-If you are going to hire any members of staff, you will have to pay salaries
How Viable Is My Business Idea?
An idea is only viable if and only if:-
(1) There is market for it
(2) You have figured out how to finance it either through your savings or loan
(3) You have a differentiating factor that sets you ahead of the competition
(4) You are passionate about it
(5) You are ready to be patient with it.
Keep in mind that some ideas may not be as lucrative from the onset. In fact in some cases you may even have to wait for some time in order for your business to start repaying you.
Before you invest your money in any business idea, it is always wise to do a feasibility study. Sometimes this small measure of security can help you save a lot of cash that would otherwise be wasted chasing the wind – like most people do!
WHAT TO CONSIDER BEFORE STARTING A CEREAL BUSINESS
Before you start a cereal business, ensure that the following points are taken into account:
1). The cereal market is extremely competitive. You will need to have a unique product or a very low price point to be successful.
2). You will need to have a large amount of capital to invest in inventory and marketing if you are planning to start a cereals wholesale or importation business.
3). Cereal is a perishable product, so you will need to have a reliable distribution network.
4). You will need to have a strong sales and marketing strategy to differentiate your product from the competition.
5). Cereal is a convenience food, so you will need to make sure your product is easily accessible to consumers.
6). Cereal is a high-volume product, so you will need to have a reliable supplier.
7). You will need to have a good understanding of the cereal market trends to stay ahead of the competition.
15
8). You will need to be able to manufacture a quality product that meets the standards of the major retailers if you plan to venture into cereals milling and packaging business.
9). You will need to be prepared to compete with the big players in the cereal industry.
IS CEREAL BUSINESS IN KENYA PROFITABLE?
The short answer is yes, cereal business in Kenya can be profitable.
The cereal business is a highly profitable venture in Kenya. The main crops grown in this region are maize, wheat, and rice.
The high demand for these crops in the region and abroad makes the business highly lucrative.
By and large, the main markets for these crops are the local market and the export market.
Therefore, the high demand for these crops in the local market makes the business highly profitable.
The high demand for these crops in the import and export market makes the business highly lucrative.
However, there are a number of factors that will impact profitability, including the type of cereal products being sold, the location of the business, and the level of competition in the market.
The most popular cereal products in Kenya are maize-based, followed by wheat-based products.
There is also a growing demand for high-value products such as breakfast cereals, which offer a higher margin.
Location is key when starting a cereal business in Kenya. The best locations are in high-traffic areas, such as near schools, universities, and major retail outlets.
Competition is also fierce, so businesses need to ensure they have a strong marketing strategy in place.
Overall, the Kenyan cereal market is a promising one, and there is potential for businesses to achieve significant profits.
WHY YOU SHOULD START A CEREAL BUSINESS IN KENYA
Cereal is a high-demand product. There is a growing demand for cereal in Kenya, and this demand is expected to continue to grow in the future as the population keeps growing.
The cereal market is growing rapidly. The cereal market is growing at a rate of 10% each year, which provides ample opportunities for businesses to grow and succeed.
The future of cereal looks promising in Kenya. The population is growing, and with it, the demand for cereal.
There are also many opportunities for innovation in the cereal industry, which should lead to even more growth.
Additionally, the cereal industry is becoming more and more competitive, which will help to keep prices low and increase availability.
END OF DAY 1 CEREALS BUSINESS TEACHING SESSION
The good thing with starting a cereal shop is that unlike other ideas that we have discussed in our Profitable Business Ideas WhatsApp Group, you can start this immediately. Typically, apart from securing a good location, quality stock and the county license there are no other major requirements for starting.
Also you don’t have to spend the whole day in the shop to ensure your workers conduct themselves appropriately.
So in other words, you can either start this as a full-time business or as a side-hustle. You only need to invest in stock cards so that you can track how and when every kilo of cereal is bought from your shop.
The returns are however not as mouth-watering as you would expect especially if you are one of those who dream of getting rich overnight. This is the kind of business where you start small and grow big especially as you build connections with institutions and hotels around your place.
We now come to the end of today`s teaching session, The PDF of this teaching is available here. Please comment your thoughts and questions below.
