Starting a business and becoming self employed, has become the most popular alternative for today’s generation of young people. The growing success rate of this development, has led to the other option of a 9 to 5, becoming less and less attractive. Especially for individuals looking to accumulate long term wealth and stability.
An estimate of 7 million individuals are unemployed in Kenya and more than 1.4 million individuals are on the hunt for jobs. This is according to a survey conducted by KNBS which is the Kenya National Bureau of Statistics. This harsh reality, is part of why the self employment route, continues to grow in popularity and success.
Our How To series on mpesapay.com, will put you on game so to speak and open your eyes and mind to the quite numerous business ventures in today’s world that could potentially keep you busy, put more money in your pocket and also increase your spending and purchasing power.
If it so happens that you are only looking for a business to set up on the side i.e a side hustle to add to what you are already involved in, you might still find this series useful.
With a very clear vision, great customer service, fantastic management skills, Capital and other things that will be noted in each post, you are almost guaranteed success in these business ventures.
Today’s article will show you how to set up your very own Butter business in Kenya. While this is not exactly a 5,000 Kenyan Shillings capital business, I am sure you would agree that this is also a very viable option.
Butter is a dairy product that is created from the fat and protein components of milk or cream. While Cow’s milk is what is usually used, Butter can also be created from the milk of other mammals, including Buffalo, Goat, Sheep and Yaks. It is created through the churning of milk or cream in order to separate the fat globules. If you are someone you go already made or makes butter for family and friends, you should consider doing it for sale to the general public. The transition to selling your butter to the public, will open you up to a potentially lucrative business.
How To Start A Butter Business In Kenya
Just how much do you need to set up a Butter business? What paperwork, and or equipment are you required to have in Kenya? If you are considering this option, here is everything you will need to kickstart your Butter business in Kenya.
- Acquire The Needed Training. Yes, even the Butter business requires some level of training. Especially if you have never done this professionally before. The training will enable you better understand the technicalities behind your chosen business. You can get this by ‘interning’ or working under an already established Butter business. YouTube will also provide a ton of information and knowledge, in the form of Do It Yourself (DIY) videos and tutorials available on the platform. Doing this, will ensure that the Butter you produce, will be of the best quality attainable and will also increase the confidence of your customers, while enhancing the reputation of your business, and ultimately improving your skill level.
- Have A Business Plan. For every business, having an effective and concise business plan is very important.
- Know If There Is A Demand. Yes this is very important. You need to find out if there is a demand for you intended business.
- Figure Out Your Market. It is very important that you figure out your market. Especially before starting your Butter business. Your potential customers will basically be everyone from grocery and convenience stores, health food stores, food shops, farm shops or stores, restaurants, hotels, the middle class, upper class, the expatriates and foodies in general who are usually open to paying substantial amounts for homemade products like Butter.
- A Location. As with most businesses, a good location is one of the major factors that determine whether or not your Butter business will succeed. A Business located at a major street, will benefit from a large amount foot traffic and more people will get to know about it maybe even out of curiousity. Especially customers who prefer to meet up in official settings or a physical premises as opposed to just receiving deliveries. Find a location that is both ideal and easily accessible. Also make sure that it as affordable and within your budget. In addition, confirm that the location you settle on, does not have extreme cases of break-ins, theft and shoplifting. In scenarios where you are renting, do ensure that you get the necessary approval from your landlord or owner of the building, for the alterations and adjustments you might be carrying out when occupying said space. This is to avoid any fall out between the both of you.
- Figure Out How To Raise Capital. The Butter business like any other business, requires capital investment. After completing your business plan, knowing your market and finding a location, this should be your next line of action. Although Personal funds are sometimes the primary source of funding for many new businesses, doing just that may not be enough. Taking on a financial partner is your best bet. If obtaining a business loan from financial institutions proves difficult, the next option should be getting it from friends and family. Loan arrangements in this setting are usually much more flexible as they come with much lower interest rates. All you would need to do is convince said friends and family, of the profitability of your business. Please make sure however, that you pay back the money and in good time too, so as to maintain confidence which you would need if you would require money from them in the future.
- Choose The Most Suitable Business Structure For Your Butter Business. Choosing a business structure can determine your personal liability, how much you pay in taxes, as well as your ability to raise financing. This is why it is very important that you choose the business structure that is most suitable from the get go because changing structures later on, could lead to tax consequences. Be sure to consult a business accountant and a lawyer too before deciding if your Butter business would be a Sole Proprietorship, a Partnership, a Corporation or a Limited Liability Company (LLC).
- Secure a Kenya Bureau of Standards (KEBS) License. This will cost you an estimate of around 20,000 Kenyan Shillings.
- Decide Your Pricing. One important factor that should influence the pricing of your Butter products, is whether or not the intended buyer is a retail buyer or wholesaler. In addition, please put into consideration your labor, logistics expenses, as well as the cost of the ingredients used when figuring out your pricing. While competitive pricing is always best, keep in mind that customers and potential customers will be more inclined to purchase your Yoghurt products as a result of their quality. In some cases, with or without competitive pricing.
- Make Sure Your Butter Products Are Well Packaged. Source for and buy packaging materials like containers, boxes, as well as labels. You will definitely need them when delivering your Butter products.
- Get An Employer Identification Number. If you will be looking to set up checking accounts for your business and or hire employees, you will need an Employer Identification Number. To get one, simply get in touch with Kenya Revenue Authority which is Kenya’s internal revenue service.
- Employ More hands. No one is an island, you really cannot carry out all the daily activities of a Butter business efficiently, on your own. Especially when your customer base, starts to grow.
- Secure A Food Handling Medical Certificate. This is basically proof that anyone handling your Butter products including you and your staff, is free from any diseases that can contaminate said food. A Food Handling Medical Certificate costs 600 Kenyan Shillings and is valid for 6 months.
- Secure A Food Hygiene Certificate. This costs 300 Kenyan Shillings depending on the size of your business, and is valid for an entire year.
- Create A Unique Logo. Yes even your Butter business needs a logo too and the importance of a very well done Logo cannot be over emphasized. Especially with regards to having a positive first impression on your potential customers. Make sure you create a logo that stands out and sets you apart from the competition.
- Register The Name Of Your Butter Business. You will need to register the name of your Butter business if you plan to run it as a legitimate business. The business name registration would cost you around 1,000 Kenyan Shillings.
- A Business License Or Permit. This is one of the most fundamental licences that businesses in Kenya are required to have before commencing operations, so you will definitely need one for your Butter business. Although the cost of a business licence or permit differs from county to county, it usually sits at around 3,000 Kenyan shillings.
- Secure A Fire Clearance Certificate. This is received after undergoing an inspection which you pay for. It also involves getting advice regarding the guidelines of protection against fire, and the installation of the required equipment like fire extinguishers.
- Make Sure Your Butter Business Is Insured. Although nobody likes to incur extra costs, Insurance is one essential part of starting any business.
- Be Trained In Sales. Ensure that you as well as your staff are very well trained in sales. This will especially come in handy when your business begins to grow.
- Brand Yourself As Authority In The Butter Industry. Customers and potential customers tend to believe more in businesses who are perceived as Authorities or seen as authoritative in their fields. When you are making a pitch to a potential customer, make sure you are confident.
- Plan Out Your Marketing. Next after figuring out your target audience, should be planning out your marketing. Yes, your Butter business just like any other business venture, definitely needs marketing too. Learn how to get the attention of your target market. Would discounts work? Or referrals or both? How about posters, sponsored adverts on social media and fliers. Email marketing for example, is one cost-effective way that is also very efficient in building the customer base for your Butter business. If you have a website for your business, you can gather email addresses of people who visit your site. Fliers, are also another cost-effective way to market. Flyers are one ‘page’ advertisement pieces that can be created at little or no cost. You can distribute these to people, in and around the area where your Butter business will be located. Find out what is most effective for you and use that or a combination of all of them.
- Take Photos Of Your Butter Products. A very potent way to win over potential customers, will be to impress them with visual showcases of your Butter products. You can opt for hiring a professional photographer, or taking the photos and videos yourself with the aid of a smartphone. You can then upload and display said content on your social media pages and website.
- Make Sure Your Butter Business Has An Online Presence. Yes, you need to have an online presence. This includes creating a Facebook page, as well as Twitter and Instagram accounts for your business. You can also get a website created for your Butter business as well, to further attract larger customers who may require your products in bulk. Make sure the website is easy to navigate, make sure your content is also engaging. Ensure that all the relevant information about your business (which includes the contact details for your business and testimonials) is included, as well as the terms & conditions and privacy policy. Be sure to hire a professional for this, so as to ensure that the website is very well done and looks presentable. The hired professional, will also make sure that your website is well maintained and updated regularly. Creating a LinkedIn profile for your business will also be a good look and will help you further network with other businesses. Just make sure that you update your LinkedIn.
- Figure Out Payment Arrangements That Work Best For Your Customers. You need to know the payment methods and arrangements that would work best for your customers and potential customers i.e if they would prefer to pay via M-Pesa, T-Kash, Airtel Money, via POS or in cash. Knowing this will help you offer more payment options and also be more equipped to serve them better.
- Make Sure The Accounting For Your Butter Business Is In Order. Make sure you always have a record of your expenses as well as the income your business generates. Doing this, will ensure that you have a full understanding of how your business is performing financially. It will also help you when it’s time to file your annual taxes.
- Talk To Others Who Have Done This Before You. No man is an island. While a number of established business owners are more than happy to give advice to new entrepreneurs, it can take a while to find one who will be willing to do so. The wait however, will be worth it. Talk to entrepreneurs who have gone into or are still in the Butter business. Examine, study and understand their various business models and strategies. You never know, you just might pick up one or two nuggets of wisdom from them.
- Buy An Already Established Butter Business. Alternatively and if you have the resources, you can opt for buying an already established Butter business, instead of going through the motions of setting up one from the ground up. Buying an already established Butter business means that the customers, production line, equipment and premises are already in place. It also means that there is already staff set up and sales figures that will give you an idea of just how much money the business makes and if it is a profitable venture. Keep in mind however, that buying an already established Butter business might be a complicated and also expensive process. To successfully pull this off, ensure that you and your team have the right experience and skills for carrying out an acquisition. This will almost guarantee that you will not over pay for said business. Also make sure the financial and legal necessities are in order.
And that is it! All you need to know about starting your very own Butter business in Kenya.
Is the Butter business, a suitable business venture for you to go into? That question, is left for you to think on and answer. The goal of this How To series is primarily to open you up to the various entrepreneurial opportunities that abound in the country.
One important thing you should take away from this article is to continue thinking of new ideas and ways to grow and expand your business. The tips here only a small fraction of what you need and are solely for pointing you in the right direction.
Also while the prospects are very promising and running a Butter business might seem easy, please have a realistic approach as well. It still requires a sizable amount of patience and dedication regardless and as with any business, there is a chance that you might incur losses. Especially at the beginning, so please keep your overheads low.
Was this article helpful? Are there any other How To topics you would like us to write on? Feel free to reach out to Mpesa Pay in the comment section.
