Cooking gas refilling business is a highly lucrative business that anyone may start with as little as N100,000 and earn up to a 100% ROI (Return on Investment) each bottle of gas.
Since a few years ago, a large number of people have delved into this business and have been making a lot of money from it, particularly during the price increase or scarcity of gas in the country.
Due to the consistent increase in demand for cooking gas from houses and restaurants, this business is profitable; nonetheless, it entails a great deal of risk, making prior knowledge of gas refilling a prerequisite for anybody wishing to enter the industry.
To establish a cooking gas business in Nigeria, however, you only need a little amount of money for training and initial startup costs.
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This post explains everything you need to know about the cooking gas industry in Nigeria, including its profit margin, initial capital, hazards, and how to establish and run a successful cooking gas business in Nigeria.
Are you prepared to learn more? Then, continue reading.
Equipment Required to Launch a Cooking Gas business
The following equipment types are required to launch a successful gas refilling business in Nigeria.
- Gas cylinder to store up gas
- Hosepipe Verve screw
- Small start up capital
- Fire extinguisher
- A good location far away from anything fire
How Profitable is cooking Gas Business?
Prior to considering the cost of beginning a business, it is always crucial to determine whether the business is successful and worth your time and money. So, is the business of refilling cooking gas profitable in Nigeria?
The obvious response is YES! As a cooking gas refiller/seller, your profit margin could range from 30% to 100% if you are in the gas refilling company.
However, keep in mind that there are a number of things that may alter and damage this business’s profitability.
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In the event of gas leakage or unexpected wastage (such as a broken hosepipe), you may break even or incur a slight loss.
How to start a Successful Cooking Gas refilling Business in Nigeria
Starting a cooking gas business in Nigeria is quite simple, although the approach may vary based on the type and size of enterprise desired.
Whether you wish to start small or large, the steps outlined below will help you launch a gas business in Nigeria.
1. Conduct an Appropriate Market Analysis
In order to launch a successful firm, it is essential to conduct extensive market research. This will increase your understanding of every area of the firm, including how it operates and what to do and what not to do.
Despite the fact that this post is part of your market research. However, take the time to conduct a thorough market analysis by approaching gas sellers in your area, establishing business relationships with them, and learning how to start the business in your area from them.
They will enlighten you on the business, when to begin, where to begin, marketing strategies, pricing, and, most importantly, how to register your business so that you are not bothered by anyone once you begin.
Also, if there are associations of gas refillers in your area, market research will help you determine which is the best.
2. Determine the optimal strategy for you
After conducting a market analysis and determining the business’s dos and don’ts, as well as its types and sizes, it is time to determine the optimal strategy.
A cooking gas company strategy mainly depends on your budget. If you have less than 200,000 Naira, the ideal strategy would be to begin as a retailer (little gas plant) selling in tiny volumes (1kg, 3kg, 6kg, 12.5kg, etc).
With a bigger capital investment of between 5m naira and above, the optimal strategy would be to establish a conventional gas plant that sells to both merchants and end users.
3. Acquire the Knowledge and Training Necessary to Commence Gas Refilling
Before beginning, you’ll need some expertise with the practical element of gas refills once you’ve determined the optimal strategy for you.
Since cooking gas is highly combustible, it is not a good idea to jump start it as most people do without any prior expertise.
Therefore, it is essential that you receive all the appropriate training, including the placement of your business, how to refill gas, and safety procedures to follow as a gas refiller.
4. Acquire the Required Tools
Starting a small-scale cooking gas refilling business requires several essential tools and equipment. Here are some of the necessary tools you will need:
- Gas cylinders: You will need to purchase gas cylinders in different sizes, depending on the market demand and your business capacity.
- Weighing scales: You will need a weighing scale to measure the weight of the gas cylinders before and after refilling to ensure that the right amount of gas is filled into each cylinder.
- Gas pumps: You will need a gas pump to transfer the gas from your storage tanks to the cylinders.
- Gas filling gun: A gas filling gun is used to connect the pump to the cylinder valve for filling.
- Safety equipment: Safety equipment such as fire extinguishers, gas masks, and gloves are essential for the safe handling of gas cylinders.
- Storage tanks: You will need to have storage tanks to hold the gas that you will be refilling the cylinders with.
- Work area: You will need a safe and well-ventilated work area to refill the gas cylinders.
- Business registration and licenses: For large scale gas plant, you will need to register your business and obtain the necessary permits and licenses from the relevant authorities to operate your cooking gas refilling business.
5. Determine a Good Location
Unlike other businesses in the oil and gas industry, such as the engine oil company, which requires a location near a mechanic’s shop in order to flourish, this business does not require a location near any other businesses. There is no specific or required site for beginning a gas business.
This is because there are gas stove users on every street and in every community. You can therefore start a cooking gas company in front of your home.
However, it is preferable that you seek either a densely populated area or one in which there are no (or few) gas plants or sellers.
6. Find a Supplier
After identifying a good location and acquiring the necessary equipment, the following step is to locate gas supplier in your area.
7. Begin to refill and sell cooking gas
After finding a nearby gas plan, the next step is to begin selling. As part of the business strategy, you would want to give discounts and make your price competitive if there are competitors in your area, despite the fact that the price of gas.
If you began your business on a small scale, you would want to go out to your neighbours and other locals and tell them about your business, the discounts it offers, and the quality of service you will provide.
As a conventional gas plant, you would need to reach out to merchants and provide them the greatest price and discounts in order to get their business and turn them into loyal consumers.
Obtain a Permit from the Department of Petroleum Resources (DPR)
After completing all preparations and launching your cooking gas refilling business, you must apply for and receive a licence from DPR. This is a must for all gas plants, especially large-scale gas plants, to prevent frequent disruptions and the possible shutdown of your firm.
You can visit a local DRP branch office or their website to obtain additional information about the licence. Prepare your Police Report, Fire Planning approval, state land, physical planning permit, and town planning permit regardless of the circumstance.
How Much Money Is Required to Launch a Cooking Gas refilling Business in Nigeria?
How much does it cost to set up a gas plant or small scall gas refilling business in Nigeria?
The answer to this question depends on the type and size of the gas refilling business you intend to launch.
With N100,000, you may launch a small-scale gas refilling business in Nigeria. Here, you will need buy a small cylinder a 100kg scale for about 25,000 naira, buy a gas cylinder (say 25kg) for like 30,000 naira or rent a bigger cylinder in your neighbourhood. And lastly you use 25,000 naira to stock gas for sale and then keep the remaining 10,000 naira for other expenses.
How to Become a Successful Cooking Gas seller in Nigeria
Every state in Nigeria has a significant need for cooking gas, making it relatively simple to achieve success in this industry. To earn more money in the gas refilling business, though, you must take an additional step.
The following are some of the most effective sales techniques for selling cooking gas.
Location of your company: Although it is possible to start a gas business everywhere there are people. However, establishing your gas plant in a densely populated region will provide the maximum revenue.
Start with the lowest cost: In the beginning, you will need to give the lowest possible pricing in order to build brand recognition and familiarity.
As time passes, you can eventually adjust your prices to match those of your competitors, but once a large number of people are already familiar with your business, you will continue to sell more than thy do.
Dangers Associated with Beginning a Cooking Gas Business in Nigeria
As we all know, all petroleum products are extremely flammable, and cooking gas is no exception. In reality, selling gas is riskier than selling gasoline, especially on a large basis.
As a gas vendor, you should be aware of the following sources of flame outbursts:
Leaking gas cylinders: ensure that you inspect the gas cylinders of every customer before refilling them. In addition, regularly inspect your gas tank/cylinder/bottle in order to promptly notice a leak.
Setting up a gas plant near a restaurant or anywhere that anything fire is used is something you should avoid at all costs. As an example, both restaurants and panel beaters use fire/flame, so locating a gas plant near them could be hazardous.
Conclusion
Cooking Gas refilling business in Nigeria is one of the fastest-moving businesses and it is a wonderful source of daily income for people seeking businesses that provide daily revenue.
It’s a worthwhile business due to the escalating demand for cooking and the regular price increases.
Despite the periodic price increases of cooking gas in the country, gas usage for cooking never decreases; rather, it continues to rise, earning more cash for vendors.
This business is highly profitable and simple to launch because it requires little capital, but good training is necessary due to its dangerous nature
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With this post, you should have a better understanding of the cooking gas refilling business in Nigeria, how it operates, what to do and what to avoid, and most importantly, how to establish a successful gas business in Nigeria with a modest investment.
Good and comprehensive display of gas Plant business. I want to do the business in a large scale. I hope you will be of help?