For ‘young’ people, starting your very own business and becoming self employed is the most suitable alternative to the ever growing hard to get 9 to 5 jobs. Starting a business is always the best alternative to the ever elusive jobs.
A survey by the Kenya National Bureau of Statistics (KNBS) revealed that seven (7) million Kenyans are unemployed. An additional figure of over 1.4 million are actively looking for employment. With those figures, it is easy to see why more and more people are looking for alternatives.
Because we know very many business ventures require huge amounts of capital to get started, this new How To series will only show you how to start and execute several small business that require capital from as little as 5,000 Kenyan Shillings. Thus giving you the keys to the kingdom of starting a profitable business with little or no capital.
If you are also just looking for a side hustle to maybe supplement your 9 to 5 or full time job, this is for you.
All that you need to thrive in these businesses besides capital, is good customer service of course, great managerial skills, a suitable business location, and a clear cut vision.
Today’s article will show you how to start a Milk Dispensing or Milk Bar business in Kenya. While this not exactly a 5,000 Kenyan Shillings capital business, I am sure you would agree that this is also a very viable option.
Every household in Kenya, consumes milk in its very many forms. As a result of that, milk will always be a commodity in very high demand, making the business of selling milk a very profitable one.
With the introduction of modern technology like milk vending machines which work just like cash Automated Teller Machines (ATMs), any entrepreneur looking to go into this business would be making a very great choice.
How To Start A Milk Dispensing or Milk Bar Business In Kenya
To start a Milk Dispensing or Milk Bar business in Kenya you will need:
- A Location. As with most businesses, a good location is one of the major factors that determine whether or not your Milk dispensing business will succeed. Your location will in a nutshell, determine the success of your sales and subsequently the profits you would potentially make. A milk bar or milk dispensing business, requires a location that is in or at the very least close to an active market, shopping center or supermarket. Think of it this way, you would like to be in close proximity with customers who are sourcing for other food items like vegetables, sugar, butter, bread, etc as this are the same customers who will most likely be in need of your product; milk.
- Proper lighting and ventilation. After deciding on a proper location, make sure that your shop space is very organized, clean and has constant running water with adequate sunlight, electricity and of course ventilation.
- Know your options. While you can go the independent route by setting up your own shop, another good strategy would be to approach any of the major supermarkets with a proposal, negotiating a revenue sharing arrangement with them. You can explain that in order to attract customers who will be shopping, you will be installing your milk dispenser or ATM either inside or at the entrance of the supermarket. In exchange for the arrangement, you will be sharing a percentage of your profit with the supermarket. An added advantage is that you will have access to their security, electricity, and water supply.
- A Milk ATM (Automated Teller Machine). The main piece of equipment that you need to have for your milk dispensing or milk bar business is a milk dispenser, commonly called milk ATM (Automated Teller Machine). These Milk ATMs, come in various capacities such as 150 liters, 200 liters, 300 liters, 400 liters, 500 liters and up to 1,000 liters. The machines are also refrigerated keeping the milk at a constant cool temperature and can dispense any denomination of milk in 100ml units via coins or manual operations. The Milk ATMs (Automated Teller Machines) are however quite on the expensive side. They come with a starting price of 350,000 Kenyan Shillings and could go up to 500,000 Kenyan Shillings. The ATMs (Automated Teller Machines) with that price points have lower capacities like 150 liters to 300 liters. The Higher capacity models will cost anything from 600,000 Kenyan Shillings, 900,000 Kenyan Shillings, to 1 million Kenyan Shillings or more. You can however start with the more affordable variants and upgrade as your business grows. They can be purchased from Buy And Sell, OLX or Pigiame.
- Secure Licenses And Meet Regulatory Requirements. You will need to secure permits from the Kenya Dairy Board (KDB) as well as licenses and levies including the business permits from the County government where your milk dispenser business will be situated. This will cost an estimate of 10,000 Kenyan Shillings. You might also be required to secure additional permits if you plan to transport the milk yourself, as well as health certificates for your staff.
- A Milk Supplier. The success of your milk bar or milk dispensing business, is also dependent on your ability to secure steady supply of good quality milk. This is where a steady milk supplier comes in. While planning for your milk bar or milk dispensing business, please ensure make that you have found a reliable supplier or more than one (1) supplier (just in case), in order to avoid disappointing your customer base. Get in touch with the dairy farmers around you and negotiate a good price.
- Pasteurized Milk. Regulations by the Kenya Dairy Board (KDB) state that all milk sold through a dispenser, must be pasteurized before it is sold to consumers. You can either get already pasteurized milk or pasteurize the milk yourself by heating before dispensing. Already pasteurized milk can be purchased from farmers’ cooperatives. It costs around 50 Kenyan Shillings to 55 Kenyan Shillings per liter. These prices will vary however, depending on the particular farmer, season, location, or distance from major towns.
- A Good Customer Service. Good customer service will always make sure that your customers will keep coming back. Avoid milk or dispenser contamination. Maintain high standards of hygiene and of course, make sure that your machine is well maintained. If your milk dispenser uses milk, ensure that a large number of coins to exchange with notes for customers who would be making purchases with Kenyan Shilling notes.
Your Expected Earnings And Profit
Depending on your location, you can sell your dispensed milk at between 60 Kenyan Shillings to 70 Kenyan Shillings per liter. Selling 200 to 500 liters of milk per day will translate to 12,000 Kenyan Shillings to 14,000 Kenyan Shillings, or 30,000 Kenyan Shillings to 35,000 Kenyan Shillings per day. You can also store plastic water bottles to sell with your dispensed Milk. This come in handy for costumers who do not
come with their own containers but wish to purchase Milk, thus giving you extra income in the process.
Setting up a milk dispensing business may be capital intensive, but the returns are usually well worth it.
Also while the prospects are very promising please have a realistic approach as well. As with any business, there is a chance that you might incur losses. Especially at the beginning.
And that’s it! All you need to know about starting your very own Milk Bar or Milk Dispensing business.
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