Cold room business is one of the businesses making many millionaires secretly which many persons are not yet aware of! Cold room business entails preserving food products like fish, chicken, turkey, prawns, shrimps and other perishable products in a refrigerated room. It can also include the storage and sales of frozen ice cream, soya milk, yoghurt, satchet or bottled water and making ice-blocks.
The products in the cold room may be owned by you for sales or by people who pay you to preserve their products in your cold room. It is a lucrative business and it can be your full-time business or your part-time business.
Increasing importation and local production of chicken, fish, turkey and other perishable food products due to their high consumption following growth in population has made the need for cold rooms for the preservation of these products highly in demand.
Steps to take in starting a cold room business
To start up a cool room business, the following steps should be considered:
1.Carry out proper market survey– This involves going to the field and getting the necessary information needed. This can be based on observations or speaking one-on-one with the cold room owners and retailers who buy and sell frozen chicken, fish and turkey.
You need to be sure that there is a high demand for the services of cold room and/or demand of frozen foods products at the your intended location of the business. You may also need to find out if there is fair supply of power at the locality and if there are too many competitors in the business at your prospective business site.
2. Choose the aspect of cold room business you will like to go into- There are different products you can decide to deal with in your cold room business. You can engage in one, two or more products as you wish. You can decide to enter into preservation of food products like poultry, fruits, vegetables, fish, ice cream, making ice-block etc.
For poultry and fish, you might decide to go into poultry and fish farming yourself and then preserve your produce in the cold room.
To save stress and for effectiveness, you may rather choose to be buying the chicken, turkey and frozen fish from importers and stocking them in your cold room for resale to wholesalers and retailers.
You can learn how to make ice cream, do it yourself and freeze them in your cold room. You may make more gain than buying and selling.
You may also decide not to selling any product. Instead you focus on preserving other people’s products in your cold room. They pay you to preserve their poultry products, vegetables and other perishables.
You can also learn how to construct, service and repair cold rooms.
You need to decide the aspect of the business you want to go into and focus on it.
3.Get a good location to site the business – The cold room should be located in a good site, with good access road network, close to the market or industrial areas. This will make the business accessible to customers and aid easy transportation.
Depending on the scale of the business you want to venture into, a quarter of a plot of land to a plot of land should be sufficient for the business.
It is not advisable to set up a cold room in residential areas because of the high power supply it requires and the noise pollution from power generator, unless you are using a sound proof power generator.
4. Get the required equipments- The number one equipment needed is the cold room. If you have enough capital, you can purchase already-made foreign cold room. However, if you have a low budget, you can get an expert to construct a local one.
Other equipments needed include measuring scales, tables, knife, cutlass, refrigerator, buckets, cutting planks, drum for water, polythene bags, cartons, bowls, packaging supplies, safety equipments, etc. All depends on the type of cool room business you want to venture into.
Cooling van/truck is also necessary for conveying products to distant clients in order to retain the cold products.
5. Get an alternative source of power – If there is reliable power supply in your state or country, then you don’t need to worry about this step. However, due the epileptic nature of power supply in Nigeria, it is advisable or compulsory to have a stand- by power generating set to serve as a backup power source. In times of public power outages you just switch to the power generator to keep the products in the cold room frozen and to avoid spoilage. The power generating set should be sound proof to prevent noise pollution.
6. Register the business with applicable regulatory bodies – Choose a name for your cold room business and register it with the corporate affairs commission. It is also necessary to register with NAFDAC if you are in Nigeria, since you will be dealing with consumable products, so you will be able to transport your products from one state to another or internationally. NAFDAC regulates the commercial production and distribution of food products and drugs in Nigeria and ensures that these products do not cause any harm to consumers.
7. Contact retailers and interested distributors- Make contact with owners of hotels, fast food joints, restaurants, supermarkets, shopping malls, schools, canteens, shops, market women, etc, and other people who would need the products you are selling or who would need the services of a cold room.
This will enable you distribute your products without much faster and would provide you with a hand full of patronage once you open the doors of your business to the public.
8.Carry out effective marketing –Once the business is in operation, you need adequate marketing to make it a continuous success. We always advise that you explore every reliable means of advertisement within your power and budget. Do not fail to use the social media to market your goods and services. In addition to the use of social media you can also use flyers, handbills, radio, television and even word of mouth to promote business.
Cost of starting a cold room business
This is dependent on your location and the size of cold room you want have. However, on the average, 8 to 10 million naira should be sufficient to start a medium scale cold room business in Nigeria.
There are basically three major costs that you should be concerned about in starting this business:
* Cost of buying or leasing a land – You don’t need a very large land for this. Half or even a quarter of a plot of land should be sufficient. You may rent the land if you don’t have enough money to buy. However, it is more cost effective to buy a land for this business in the long run. Except for major cities like Lagos, Abuja and Port Harcourt or city centres of major towns, N 1 – 2 million should be sufficient to get a suitable land for this.
* Cost of importing/buying a cold room facility – If you are operating a smale scale facility, then you may have to get like 5 or more deep freezers for the business. But, if you want a medium or large scale business, you need to procure a standard cold room.
Budget about N 5million for procurement and installation of cold room.
* Cost of buying a suitable power generating set – 10 KVA to 50KVA diesel generating set ( e.g. sound proof Mikano diesel generator ) will be sufficient, depending on the capacity of your equipments. This would cost between 1.5 to 2.5 million naira to procure and install.
Cold room business is one of the money most profitable businesses in Nigeria currently, evenugh it is not very popular. Hence the less competition and high potential for profits.
In choosing the kind of products to preserve, or store, consider your locality and the preferrence of the people in the locality and the availability of power supply in the area, as this will give you an upper edge over your competitors.
Keep evolving and flowing with the current tide in the business. As technology changes, adapt to the new technology or method to retain old customers and attract new ones.
You need to know the products you sell very well, their shelf life and how to preserve them to avoid deterioration.
When all these steps are put in place, be ready for success.
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About the writer:
This was written by Chiamaka Uduezue, content contributor 1 at MyAfribusiness.com. She is a graduate of Environmental Management and enjoys researching, learning new things, sharing knowledge with others and motivating people to succeed.
Reviews, research and additions were done by Gospel Emeka.
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