It is no news that Kerosene is now expensive than cooking gas, and no one can stay without food. So, cooking is a must one way or the other.
And even those that buy food from eatery contribute more to the high demand for cooking gas than those who cook at home. If you don’t understand how, you can ask me in the comment question.
So with the daily increment on the price of kerosene in Nigeria, the cooking gas business has now become one of the lucrative businesses to venture into in Nigeria because of the shift in demand from kerosene to cooking gas.
Like I do say;
So in this article, I will be teaching you guys how to start a cooking gas refilling business in Nigeria and also how to make it in the cooking gas business.
You can start this business with as low as 300,000naira and in one month you can recoup as high as 150,000naira as profit which gives you a 50% return in one month.
Very few businesses can give you a 50% return in one month, which makes it a very profitable business to engage in.
The reason behind such high profits is because of the excess demand. Like I said earlier in this post; a shift in demand from kerosene to Gas.
There are different Kg of gas cylinders you can start with, in this business. They ranges from; 50kg, 25kg, 20kg, 12.5kg, 10kg, etc.
Let assume you choose to start with 12.5kg (which obviously is the most popular kg), each time you fill this cylinder you can make as much as 500naira when you sell to consumers as refill.
If that 500naira is maintained for ten days, that is 5k for you.
But we both know you definitely going to sell more than one cylinder in a day.
The price to fill a 12.5kg at the depot varies a lot but it mostly falls below 3,500. So let say you fill at 3,500 you sell at 4,000niara to consumers, this gets you 5000naira as profit.
This means if ten persons come to get gas from you in a day, it means 5,000naira as profit.
So the monthly profit will be 5,000 x30 = 150,000niara
If your location is right, you can expect as high as, 20 to 30 persons a day.
A filled cooking gas cylinder is expected to last for at least a month that’s if the person barely cook. but if is someone who cooks a lot, it is expected to last for a minimum of 2 weeks.
This means you are rest assured that the probability of them coming back that same month for another refill is high. this means the probability of having more than 150k a month is also high.
But if the 300k startup capital is on a high side to your pocket, you can start with even 50k.
The biggest risk in this business is; “fire explosion”.
But that being the case, it is very rear, in fact, have not seen Gass station caught up in the fire.
The reason being that you must be sensible enough to know that you are to set up this business in a location where people who use fire are not close by.
And besides, the location must be an open place not enclosed. The reason is that; in an open field, the gas dissolves faster into the air, preventing it from having the capacity to attract fire.
3. Price fluctuation
Price fluctuation may become a problem mostly to your costumers. At first, when you tell them the price has gone up they may feel you want to extort them.
The high price can also affect your profits because there is what we call; “a benchmark in price” in any business.
If your selling price becomes high as a result of the high buying price, it might make your customers seek other sellers to confirm the new price.
And if by any chance, they discover a seller with a lower price it means they are done with you.
So how to overcome this situation is by you sacrificing your 500naira profit. it might mean you losing 200naira out of the 500nair for that month sales.
Trust me when other new customers start coming to enquire about the new price and they discover your price is a bit lower than others they will subscribe to your services.
This can Skyrock your consumers from the daily limit of 10 to 50 if you are faithful to maintain the acceptable price.
But the amazing thing is, it doesn’t happen often. In fact, it rarely happens.
In Location, there is one most important thing you must consider, or else you will be wasting your time doing this business.
When it comes to finding the right location for this business, the first thing that comes to people’s minds is to look for the busiest area to set up their cooking gas business.
It might work for those who want to set up a Gas plant business but not a retail LPG business
If you stick to that mentality, you might end up missing out on the lucrative aspect of this business.
Such a place will give you publicity as a retail cooking gas business owner, not money. And that is not the aim of any businessman.
The question now is where can we set up our cooking gas business?
An area that is residentially dense.
Meaning your location necessary doesn’t need where there are other businesses, all it needs is where people reside.
The surprising thing about this business is, where people reside more is often the most less busy or even most quiet place.
Even with the quietness, it has more potential to provide you the maximum profit you desire than those busy areas.
How to spot a good area to setup?
- Must be residential
- There could be possibly no land space or very few land not occupied by residential buildings.
- Make sure is an area that you know people live in not just the unaccountable number of houses.
Emphasizing on number 3, there are some locations; “mostly newly developed areas”, where you see endless numbers of completed buildings, furnished but no occupant.
Areas such as that have the potential to bring in high profit but the only price you have to pay is; “patience”.
The reason why is patience is that it can only be possible when people start occupying those houses.
But if you want instant cash flow in this business, I advise you don’t set up in such an area, as it will yield to little or no returns.
Last but not the least; “this is not a recharge card business you do under an umbrella, (like I see some persons do in Lagos). You must have a shop even if it’s just a caravan.
The reason being that your gas cylinders need to be kept safe in a place after closing for the day. Not on a to and fro transportation (from house to business location).
5. Buying your Gas to sell
It is one thing to buy gas and another to sell.
So as a retail seller that you are, you must recognize that you are also a customer to direct dealers.
There are several gas depots you can get your refill from and they are very easy to locate due to their obvious gas plants.
And besides, petrol stations are now into the gas depot business. So in case, you are finding it difficult to locate a depot, you can locate a filling station that has a substation for a gas station to get a refill.
After those whole areas have been touched, 4 things are important, and without them, it is impossible to even begin this business.
- How to Fill gas cylinders
- How to refill gas cylinders
- How to transfer gas from one cylinder to another
- How to take the exact measurement of gas Cylinder before and after filling it.
- How to change valve
Those 5 things can only be gotten through a one on one practical. This means you must look for someone to teach you or someone you can work with for at least a month.
A month is too much to learn everything, but it is important to stay for a month just for perfection’s sake.
With all this knowledge put together, you are good to go start your Liquefied petroleum gas (LPG) business.
But you must know this rule: the only people you can call your customers in this business (applicable to all businesses) are only returning customers not a first-time consumer.
And the only way a consumer can return back to you is when your business honesty is still very active.
Do you have questions or contributions? drop them in the comment section below.
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