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How To Start A Cooking Gas (LPG) Refilling Retail Business In Nigeria Business Plan. Contact us for the Complete Comprehensive Guide on How To Start A Cooking Gas (LPG) Refilling Retail In Nigeria Business Plan Click here

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Cooking gas business is a viable business as evident on every street corner. Often times I wonder how they make their profit seeing the intense competition. The good news remains as more homes embrace this fuel, more customers arise.

How Much Do I Need To Start A Cooking Gas (LPG) Refilling Retail Business In Nigeria



The sudden shift by Nigerians from the use of dirty fuel such as kerosene, firewood and charcoal to a cleaner and more environmentally friendly source of energy, which is the Liquefied Petroleum Gas (LPG) popularly called cooking gas, may have opened a new vista of investment opportunities for Nigerian entrepreneurs.



The sudden shift by Nigerians from the use of dirty fuel such as kerosene, firewood and charcoal to a cleaner and more environmentally friendly source of energy, which is the Liquefied Petroleum Gas (LPG) popularly called cooking gas, may have opened a new vista of investment opportunities for Nigerian entrepreneurs.

Though Nigeria still ranks lowest in per capita usage of LPG with 1.1 kilogramme consumption rate behind South Africa, Morocco and Ghana, the intervention of the Nigerian Liquefied Natural Gas (NLNG) Limited has somewhat helped Nigerians to embrace the use of LPG. Prior to the intervention of NLNG in the domestic gas market, the use of LPG was exclusively for the rich because the price was out of the reach of the common man as LPG was majorly imported with annual consumption rate of 70,000 metric tonnes per annum.

The coming on stream of NLNG broke that monopoly and afforded a lot of Nigerians to begin the use of LPG as against the kerosene and other unconventional sources of energy.

The incursion of NLNG into the domestic gas market equally created massive investment opportunities for local players to key into the LPG value chain business.

Nigeria, according to statistics from the Nigeria Liquefied Petroleum Gas Association (NLPGA), currently consumes 385,000 metric tonnes of LPG per annum, up from the 2013 consumption of 250,000. This is even considered too low when compared with Ghana, Senegal, Cameroon and Kenya’s utilisation.

Despite the massive investment opportunities that abound in this sector, one area that is still largely untapped is investment in LPG plant. While other areas of the value chain such as the retail arm, gas accessories and parts, investment in LPG is at its lowest ebb.

Liquified Petroleum Gas (LPG) is environmental-friendly, much cheaper and cooks meal faster. The market for this product is growing by the minute as even rural areas are shifting from using kerosene and firewood.

Cooking gas business is a viable business as evident on every street corner. Often times I wonder how they make their profit seeing the intense competition. The good news remains as more homes embrace this fuel, more customers arise.

What you need to start

To start cooking gas business you will need the following;

• Gas cylinders (preferably, 12.5kg, about 20 pieces)
• Long hose
• Regulator (gas corks, 3-4 pieces)
• Industrial scale

Most homes use the 12.5kg gas cylinder so it is better to get this variant first. You may, however, choose to buy one or two bigger-sized gas cylinders. An industrial scale is used to weigh the gas after filling. Having one is optional but it is sure to draw customers when they can see they are getting exactly what they are paying for. I once had a gas supplier that undersupplied the needed weight of gas. We noticed the gas was finishing faster and confronted him to either deliver well or we stopped buying from him. He changed. Having an industrial scale puts integrity in your cooking gas business. Even when customers are not there, make sure to deliver the weight paid for. Honest business still pays.

A 12.5kg cylinder is sold between ₦6,000-₦12,000 depending on the quality and previous usage.

Proximity to gas supply plant

Cooking gas plants are more like wholesalers of cooking gas, while your business is the retail end. It is from cooking gas plants you buy in bulk and sell to customers. It is important to have your store close to a cooking gas plant. This is to save money on transportation. Spending as low as ₦150 to transport a cylinder will help you save money and give more competitive pricing to customers.

Also, consider cheaper means of transportation where available.

Location and marketing

Your cooking gas business should be in a good location, easily accessible to customers. Marketing for this business is mainly through word of mouth. Visit homes, families and friends in your vicinity to tell them about your service. Offer to give sell at cheaper price than the competition if you can. You can also type and print small flyers and share.

As you grow in the business you will have some customer’s phone numbers. Send them goodwill messages during celebration periods. These little acts may just be what knocks the competition off.

Consider home deliveries

One way to stand out in this business is to do home deliveries. We all like comfort and can even pay extra to get it. These days, cooking gas suppliers are doing home deliveries at no extra cost. The guy who sells gas in my area sometimes carries it on his shoulders for deliveries close by. This may be stressful physically but it serves his business.

The other day, I saw a branded bus supplying cooking gas. The bus was painted with the brand name and contact information of the business. There are cheaper alternatives to supply gas. One example is using a bicycle. Our previous gas supplier had a bicycle. He made sure to properly tie the gas to the bicycle to avoid it falling off.

Safety and other best practices

Perhaps the biggest danger in cooking gas business is the flammability of the product. Safety measures should be employed to reduce the possibility of fire explosions. Be quick to detect and stop any gas leakage. Where you refill gas should be as far as possible from any fire source. Smoking, bush burning, waste burning should be avoided in the vicinity. Get a fire extinguisher and keep it where it is easily accessible. Fire is your enemy. Fire is everybody’s enemy. Fire does not want your business to succeed.

Profit

Average profit on every 12.5kg gas cylinder is ₦500. Therefore, it is possible make at least ₦20,000 every month by selling 10 cylinders every other week. Depending on location and marketing, the profit margin is expected to be much higher.

WHAT YOU NEED TO START A COOKING GAS RETAILING BUSINESS

GET TRAINED

Before starting this business, it is important to get training in other to know the con and pro of cooking gas retail business. The things to learn are:

HOW TO MEASURE THE GAS

Cooking gas is measured in litres, kilogram or tonnes. 1kg is equal to 1.75 litres while metric tonne is equal to 1,750 litres

HOW TO REFILL CUSTOMERS CYLINDER

Gas can be refilled into another cylinder in two ways depending on the type of filling system;

AUTOMATIC FILLING SYSTEM

Insert the nozzle into the cylinder and press the exact amount of quantity whether in kg or litres into the cylinder. Because it is automatic when it gets to the actual quantity that is programmed to disperse it will stop.

PNEUMATIC DISPENSING SYSTEM

The cylinder is placed on a digital scale which is adjusted to its zero limit. After pressing the quantity that is equivalent to the amount required you stop dispersing.

HOW TO HANDLE THE GAS CYLINDER (PRECAUTIONS)

* Make sure you place the gas cylinder in a vertical direction except it is otherwise stated by the manufacturers.
* Be sure it is well positioned so that it doesn’t topple.
* Always make sure the cylinder valves are tightly closed in other to avoid leakage.
* Also make sure you always protect the valve with a valve cap to prevent damage whenever the cylinder is dropped.
* When loading or unloading the cylinder don’t drag or roll it over because it can result in damage to the cylinder. Place them in a well ventilated room with enough air.
* The cylinder should not be placed on bare ground but on a pelleted wood. * Don’t allow the cylinders to have contact with each other.

GOOD LOCATION

It is always very important to set up a business where the population of consumers is high. Therefore set your cooking gas retail business in the centre of attraction. Most of the sellers converge in town which is not wrong. But why increase the number of sellers in a particular place while some places are left with non. It will shock you to know that it is not only the rich or people in town that make use of cooking gas. Low income earners now use it in good numbers. Before the guy I made reference to opened close to us we were all buying in town You can imagine the stress, inconveniences and money spent on transportation.

THEY PLACES TO SET UP A COOKING GAS RETAIL STANDS ARE:

More than 70% of the people living in an estate make use of cooking gas. It will be an opportunity to established one in such areas. Other places are Government reserved areas (GRA), communities where high income earners are located and Urban centers.

CAPITAL FOR STARTING A COOKING GAS RETAIL BUSINESS

Well with N50,000 you can start the business in small-scale. This may include a 12.5kg used cylinder and 2 different cylinders for a refill.
Others are a new 12.5kg, 6kg, 5kg, 3kg; 1 bundle of hose, burner, regulator etc . Cooking gas comes in different shape, colour and sizes. The sizes ranges from 3kg, 5kg, 6kg, 12.5kg, 25kg and 50kg. For a large-scale cooking gas retail business you will need millions of Naira maybe about 2 or more.
But this is outside the space to use. You either buy or rent. Lets say you can attach a container to a shop in a commercial area where it will not pose a challenge. Capital is very important because it is the foundation for starting a business. You can get a soft loan for the business. This is the first time I’m actually encouraging the sourcing of loan for a business. This is because within 6 months you should be able to return the loan if you are not yet expanding.

PLACE OF PURCHASE

Research to find out where to be buying the gas. There are many major cooking gas stations. Before now there were only two known dealers; NAVGAS which is the biggest and NIPCO both are in Apapa Lagos. In a cooking gas retail business where to purchase gas from is very important and the source of such gas. The station should be closer and the price fair. Every dealer has their different prices.

PROFITABILITY

If you make #50 for a litre of gas you bought assuming you sold up to 100litres. That will be 50×100 which is equal to #5,000 . Making this amount for just a day is not bad. But it could be more depending on your location. You can also make money from the sell of cylinder to old and new customers. This will give you additional income.

MARKETABILITY

Print flyers for your cooking gas retail business and distribute it to every house or most houses in your location. If you cannot place sign post at least line the cylinders outside so that the people passing will be aware of what you are offering..

Click here to get the complete guide on the above business plan  Click Here

Uses of this Business Plan (PDF and Word)

This business plan can be used for many purposes including:

•    Raising capital from investors/friends/relatives
•    Applying for a bank loan
•    Start-up guide to launch your business
•    As a business proposal
•    Assessing profitability of the business
•    Finding a business partner
•    Assessing the initial start-up costs so that you know how much to save
•   Manual for current business owners to help in business and strategy formulation

Contents of this Business Plan (PDF and Word)

This business plan include:

•    Marketing Strategy
•    Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
•    Industry Analysis
•    Market Analysis
•    Risk Analysis
•    SWOT & PEST Analysis
•    Operational Requirements
•    Operational Strategy
•    Why some people in this business fail, so that you can avoid their mistakes
•    Ways to raise capital to start your business

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Oyibo E. Moses8 Posts

The sudden shift by Nigerians from the use of dirty fuel such as kerosene, firewood and charcoal to a cleaner and more environmentally friendly source of energy, which is the Liquefied Petroleum Gas (LPG) popularly called cooking gas, may have opened a new vista of investment opportunities for Nigerian entrepreneurs.

3 Comments

  • Jessie Reply

    12 Dec 2019 at 11:12 pm

    This is the latest business in town now, thanks for the write up

  • Oyibo E. Moses Reply

    13 Dec 2019 at 11:08 am

    Thanks for the comment

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