There a lot of people coming into the provision store business from time to time as the population of the country increases, and my guess is that you might also be one of those people who are planning to start a provision store business in Nigeria.
How much will it cost me to start a provision store business, how profitable is a provision business, these must be the questions you have been curious about. Today we will share with you all the information you need to start a provision business in Nigeria.
By the end of this post, you would no longer be in doubt of how to start a provision store, this is why we are giving you all the necessary information required.
You may be wondering how to start this business and all the details involved; that is what this piece is all about. To get the most out of the post, be sure to read everything from beginning to end.
One of the biggest mistakes people who plan to start a business store make when starting their store is failing to start with the right capital and this has caused a lot of provision stores to fold up because they may have not started off at the right foot.
It’s important to specify that there are a number of things that affect the actual cost of starting a provision store anywhere in the word, but in this post, we are interested in talking about starting a provision store in Nigeria, so we are going give you an in-depth information about how much it costs to start a provision store in Nigeria, and how to start a provision store.
Well, before we get into talking about, how much it cost to start a provision store, let’s look into the basics of owning and running a provision store and how profitable it’s.
How profitable is starting a provision store in Nigeria?
The short answer, Yes, indeed, starting a provision store in Nigeria is highly profitable.
One of the advantage about starting a provision store, is the market opportunity, and this is what we can use to determine how profitable a provision store business will be, Nigeria has more than 210 million citizens, making it a fairly populated nation among-st all the countries in Africa.
No matter how unstable the economy is, the people living in Nigeria must be able to meet their basic daily necessities.
What does that tell you, it automatically justifies the fact that starting a provision store business is evidently profitable, we you progress in this article you’ll soon find all the steps in this article how to open a provision shop in Nigeria.
Demands for various goods and items will always be requested, for example everyone, including me and you, need soap and detergent for washing and cleaning, we need toothpaste to clean our teeth, we drink milk, chocolate and sugar with our coffee, and we make instant noodles, we purchase soft drinks, we buy various types of snacks too.
In order words, provisions stores will always continue to be a profitable kind of business, the supply chain cannot be interrupted for any of these items and stuffs we need in our daily lives to continue to stay available.
People will purchase these goods in bulk as a wholesaler and resell them to other merchants and final consumers, while others buy these goods in retail. As a result, Nigeria’s wholesale provision industry is immensely lucrative, the retail industry too is not left out.
Looking at the population in the country, you fill the space left by the fact that not every one in your neighborhood has a provision store. In other words, if you discover an area where there are few or no provision store, then before it’s too late, seize the chance and start your own provision store.
In conclusion to how profitable it’s to start a provision store in Nigeria, remember that the demand for food products is constantly growing and many families in Nigeria buy provisions nearly every day, there is a good chance that you will succeed in this provision business.
Mind you, the fact that starting a provision business is profitable doesn’t mean there are no pros or certain challenges to be faced.
Before starting your own provision business in the country, make sure you thoroughly understand how the provision business operates. The reason for this is because, there are many people who also want to own a provision store, in other words, you are not the only one with this business idea, not to worry we are going to discuss a few of the challenges to bear in mind before starting your provision store.
The challenges of starting a provision store in Nigeria
Like we said, there are many challenges that is faced with starting your own provision store, these challenges depends on the kind of store you’re thinking about opening.
Also the challenges will depend on the state you are opening your store, and the store’s location.
As far as starting a provision store is concerned, most people start with wholesale why some starts with retail provision store, whichever one you wish to start, note that it’s accompanied with various challenges.
However, keep in mind that opening a wholesale provision store requires things and it’s more capital intensive, another thing is that you may need to employ people who will work with you on your wholesale shop, this is most notably a human factor because not every potential employee can be trusted, so if you are starting an wholesale provision store, you need to have planned properly for it.
You must choose the goods to buy in order to stock your store after choosing the type of provision store business you want to operate. These goods must be purchased in a certain quantity in order to make room for additional goods.
Why Open a Provision Store?
Unlike large supermarkets that serve a variety of needs of people as evidenced by the various types of goods that are purchased and sold in supermarkets, provision store is a business that does not really require a large amount of money because you will be dealing with basic household items that are not really expensive.
For this business, all you really need is a good and open location where there is a market.
As we go on, we’ll give you helpful advice on how to effectively start your provision store business in Nigeria, despite the competition and difficulties you could face along the road.
How much capital do I require to start a provision store?
Now let’s talk about how much is required to start a provision store business.
With the current economy and ride of goods in the market, for bare minimum, you might need at least 500 thousand Naira to 1 Million naira, to get off to a good start.
If you have more than this, it’s in your best advantage because it will make your store or shop look well-packaged and may help you draw in more customers. Why do we say so?
What would you think if you went to a provision store and asked for something, then you were told it wasn’t available, then asked for something else, were told the same thing? Compared to a store, where you can essentially find everything you want, that means you will keep coming back to that store, because they sell all your basic needs.
A proper capital that we recommend for anyone to start a provision store in Nigeria especially on states with high leaving cost is N3 million, you can at least get started with 3 million, 1 Million out of this capital will be used to rent a shop or warehouse, furniture, and business registration which is optional.
At least 1.5 Million should then be set aside for purchasing enough goods, fully stocked in your shop, and in addition, if you are running an wholesale store, you will need a few employees to assist you with running your shop.
In other words, you will need the remaining cash so that you can pay your staffs, at least set aside three months payment on ground, finally you will need an additional cash as well as for advertising and marketing until the business really takes off, but at the same time, this is if you want to really brand your business, if you place your provision store in a very open area that’s also busy. Then it will promote itself.
For a start too you would be needing a supplier, as for the supplier, the majority of large businesses today only need to view your bank statement to verify that you have an actual account, a guarantor, and collateral. Some people could also ask for a bank manager.
After reviewing your proposal, inspecting your shop, and signing an agreement with you, they will immediately begin supplying you with goods.
That’s as much as you need to know on how much is required to start a provision store business in Nigeria.
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Advice for running a good provision store business in Nigeria
Before we talk about the steps on how to start a provision store, we believe the following information will give you a head start and prepare you ahead.
A lot of people who are operating provisions store most times run into shortage of customers thereby making it hard for them to make a better sale to keep the business running and growing.
So we will share with you the most common advise that can keep your business steadily growing once you start, we expect you to be serious about running your business.
First off, make sure you provide quality customer service
Customers is the lifeblood of any business, so have more and more people retuning to your shop even if you are dealing with competition from other shops, the trick to have more customers coming to your store is to have the most superior customer service, I will explain better now.
At the start of your business, you may not be getting flood of customers as you imagine, but once you start getting customers, you need to do your best to make these customers happy, you must provide excellent customer service to generate ongoing sales.
It’s likely that there will be other people with provision stores offering the same things that you do. The way you serve your consumers will influence whether or not they come back to your provision store.
- Treat your customers with respect.
- Don’t treat your customers badly.
- Avoid raising prices above the average for commodities.
- Quickly address the concerns of your customers.
- Ensure a welcoming atmosphere for both purchasing and selling.
- Customers who notice that you provide good customer service will stick with you and bring more people into your store.
Remember that the country is going cashless so have a plan for it
With the current status of the company, the flow of cash is being reduced, in order words you must be ready to accept payments without cash,.
You can expand your provision store’s business technique of receivingg payments for goods by adding a point of sale (POS) service because we now live in a cashless world and a digital age.
If an ATM card isn’t available when a consumer wants to use one to pay for items, you’ll probably lose those sales. Add point of sale services to the provision store in order to avoid missing any potential sales.
This will simplify the payment process for your customer, and you will also earn a little commission from the use of the POS.
This should be a prior concern to your business, since people are no longer allowed to withdraw or carry cash over certain amounts, and with the withdrawal limit of cash by the CBN of Nigeria, having a POS on ground thereof, is essential.
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Keep a digital inventory record of your sales.
A good record keeping is necessary for people who buy and sell goods, even if you will be operating a provision store, keeping a log of your sales and profit will help you appropriately manage the business. The days of keeping a hefty notebook of your in-stock and out-of-stock goods are long gone.
Keep a digital record of your in-stock and out-of-stock items and you will be able to easily go through your daily sales, profits and loss.
To start a successful provision store, follow the procedures above. It is unquestionably merely a useful model that you can use to become successful once you start out.
One benefit of the provision store business in Nigeria, is that you can open one without having to create or own certain goods. I.e you can get suppliers who will give you those goods to sell, and you make your profit off it.
A final advise for you is to open chains of businesses (provision stores) in the same location if you want to succeed in this industry, but make sure the locations are not too near to one another.
You must also hire a salesperson and an accountant to help you if you want to handle and operate these stores for maximum profit making.
What are the things need to start a Provision store in Nigeria?
Now, let’s talk about another important part of starting a provision store, there are several things you need to start, however the exact requirements can only be determined by certain factors such as location where you are setting up your provision store and how big you want to make your shop.
But I am going to list the most important things you would need to start your provision store.
Enough Capital:
To start your provision store, you’ll need to have enough cash on hand. The amount of money needed to start this business will depend on how big you want it to be, as well as how many and what sorts of things you plan to sell.
A part of the money will be used to rent a shop or other location for your business such as a warehouse to store your goods before taking them to shop, especially if you want to go into wholesale.
We already answered how much is needed for you to start a provision store above, if you read through that part above carefully, you will notice we discussed the minimum and a required amount to make you run a successful provision store.
That being said let’s go into the next on the list
Well written business plan:
You must have a clear and well written plan on how you would go about running your business, I can’t overemphasize how important this is, but doing it gives you a clear purpose and a vision, have a documented business plan, this will act as a compass and a road map for you and your business.
Before beginning plan it out, you don’t really need a 100-page business plan; instead, a one-page strategy with doable tactics will produce greater outcomes for you according to experts.
Renting or owning a Shop or storefront:
This business benefits from having a shop that customers may easily visit, without a shop we won’t be talking about provision store, in other words a shop should be the number one requirement.
A large store is advised if you have the funds available so that you can keep all the products your consumers could possibly need in stock. Additionally, we have known that people in Nigeria prefer going to just one store for all of their needs.
In this age of ease, everyone makes an effort to reduce the amount of stress they experience every day.
Advice for you while running a shop, don’t use more than 40% of your capital to buy a shop and pay the rent. If you don’t have the resources to open the type of store you want, you can rent a smaller one and keep the remaining stock in your house.
Second piece of advice, unless you are renting near a market, keep your shop close to your house. Walking home in five minutes is ideal; eight minutes is OK; and ten minutes is not suggested unless you wish to pay for transportation.
When she first started her business, a person I know kept all of her inventory in her living room. Before she could rent a large shop, she used a little shop. Don’t give in to any justification, then.
Wheelbarrow, delivery bike, minibus, tricycle
If you will be doing wholesale then this is where this comes in, since you would need to hire others to help you with your most aspect of the business, this is might be something you would want to have, a wheelbarrow will hep you in transporting your goods, in and out of your shop, and delivery bike can be used far transporting the goods to far distance.
You’ll need them for uninterrupted business operations, if you’re wondering why I included the tricycle, minibus, and delivery bike on my list, then I would clarify.
I know you may have seen many people operating the same businesses you wish to establish, I do advise people to keep their business strategies professional.
There may be a large number of people working in the business, but how well are they managing it?
Does their company offer customer a decent value and excellent customer service? The truth is that the answer is NO. If you’re up for the challenge, step up and take on what others won’t or can’t accomplish to achieve outcomes others could only imagine. Period.
To be specific, it would not be a bad idea to offer to help hour customers transport the foods to their final destination for little to no fees, depending on their location and this can make you standout in the business. You will grow quickly and have returning customers.
Tables and Shelves
You will undoubtedly need tables and shelves to arrange and display your goods so that customers can see them. Additionally, it will make it easier for you to identify when certain products are running low.
Some of your customer will make the long journey to your store, and they will require a place to sit and unwind while completing the purchase. Their comfort is your concern, therefore providing them with a convenient spot to sit will help your company grow.
Some customers may choose to write their shopping lists in your store.
For them to be able to write clearly, they will need a seat. Additionally, certain customers may appreciate it if you choose all the things they require while they are seated. A customer is king, after all, and you are in business to serve them.
Don’t treat them badly. Laugh a lot. When you have a salesperson at your store, things will be simpler.
Books or Website for Inventory
A factor in why business in Nigeria fail so quickly is a lack of bookkeeping. Take note of everything you acquire and sell each business day. Do not put it off until later.
Your books or website will act as your database for the time being as you gather data for use in business choices.
We always advise businesses to keep inventory record of their business on a website, as it will be more efficient and it well help more because books can get lost, turn or roughly handled.
How to start a provision store Business in Nigeria
Great, now you have learned a lot about starting a provision store in 2023, in this section, we are going to give you a step-by-step process for starting a provision store. Each of this process is important and you must understand each process and do what is required.
The research and planning process
Before starting, please do your research and have a solid plan in place before starting your business. Your planning and research are crucial to the success of your provision store.
No matter how tiny, a business plan is an essential thing that needs to be created by any business.
Setting a business plan too, can help with making you more professional, it will help you make better decisions. You won’t overlook any crucial choices because everything is documented.
To have a good plan, research about this, research about the location, the goods you will be selling, a list of everything you will be needing, document these and know what you will be doing before starting.
Research what kind of goods you will be selling, this is very important, especially if this is your first time in this type of business, some experience we can share with you is, the type of goods and products you choose to sell should rely on the needs of your area when you first start this business. You can sell a variety of goods and earn money.
If you are In a location with rich people, you might choose to sell expensive drinks, which wouldn’t be appropriate in a lower neighborhood.
To determine the types of products that will thrive the most in your location and to stock up on those products, you must conduct a thorough investigation.
Also making thorough research is quite important because it enables you to compare your prices to those of competitors and set reasonable ones, this will then help you pan out the business moves to make.
Getting a store/vendor and the supplies process
Finding a shop comes next after the appropriate research.
For small provision stores remember that this business can be started in your neighborhood, particularly if there are lots of people there.
It is important to consider your shop’s location, and a knowledgeable expert would advise against setting up shop close to several other stores in the neighborhood that operate similarly.
Because there are so many people who operate businesses in an area where the same services as yours are widely available, you can lose a lot of money before you even get started.
You should seek for a nice location where you will be prominent enough to be recognized as the top seller in your space because you cannot compete with them.
For any business, a good location is crucial. You can set up shop in key areas in the city center or in a popular area like a market where lots of people go to shop. Your customer base will considerably grow as a result.
You will need to have a lot of products if you are a wholesaler. These items must be kept dry, cool, and pest-free while being stored.
You will require a medium-sized room, several shelves, and a refrigerator. Because you won’t be able to display all of your inventory in the main store, this tiny space will function as your mini-warehouse.
As for your shop, make sure the shop is spacious and situated in a busy area so that customers can easily find you.
This does not imply that you must lease an enormous store, but it is necessary to find a store with adequate room for your goods and items so that people can readily observe your store and freely look through and choose what they want.
Don’t forget the proverb that “how you dress determines how people will address you.” In our context, this means that how we show our store and how we want people to perceive it will affect the types of consumers we attract and the volume of sales we hope to generate each day.
After setting up the store. The shop needs to be completely prepared.
All you need to do is gather as many shelves as you can, bags for packaging, chairs for seating, and any other items you see necessary.
Please try to have at least five (5) vendors as you will be purchasing in large amounts at most in order to avoid failure. This aids in obtaining the greatest price offer so that you can make profit.
Ensure that the goods you obtain are reliable and have a long lasting life. Purchasing products that are about to expire might cost you a lot of money, especially if you do not see a lot of return, people will return expired products or goods.
Finding the ideal suppliers for your company is crucial. The vendor you should be on the lookout for should credible and dependable wholesalers who can provide for you at reasonable prices. To ensure that your business is not badly impacted if one of your suppliers stops providing for whatever reason, you should have at least three reliable suppliers.
A strong working relationship with your suppliers might enable you to reap long-term rewards including price breaks, credit purchases, and seasonal discounts.
Keep in mind that product costs are variable. Try as hard as you can to find the best deal on affordable quality. Remember you should adjust your selling price according to how you buy from time to time. This also means that in order to increase your profit, you should constantly remain careful.
Use WhatsApp or email to communicate often with your vendors to know just as much when needed.
Hiring a salesperson or shopkeeper, vans and others, process
Now that you have a shop, vendors and goods, optionally, you may want to hire a shop assistant. Keep in mind that, as a wholesaler, you will be moving cartons, large kegs, counting money, and answering inquiries from customer at the same time.
You might need to buy/lease a delivery van if some of your clients insist that you deliver to their retail stores or residences. Additionally, a driver will be hired and paid daily, weekly, or monthly.
However if you would be operating a small and not too big provision store then you might not need this.
Getting customers process
Keep in mind that there may be other people running this business in your neighborhood. Making everyone who comes to you feel welcome and at home is what you need to do to get customer growth.
Your behavior toward your customers is quite important. You should be approachable and completely marketable, maintaining your customers will be mostly dependent on your customer relationships. Treat everyone with respect because everyone enjoys it.
A small discount or free present for a customer who makes numerous purchases from you will also be very appreciated. If you need to hire staff. To ensure a smooth company flow, just as we talked about in the salesperson process, make sure they are honest and reliable people.
This does not imply that you should solely rely on your trust; you must also keep an eye on them and evaluate how they operate.
Also to get customers, your business can grow beyond your wildest dreams if you advertise it through the appropriate means.
Use the many advertising avenues to reach out to potential customers rather than keeping your supermarket or provision shop business just there waiting for the customers. This is a crucial step that must never be skipped.
A provision store typically isn’t a large business that calls for significant marketing budget. A good idea for you, is to target a particular neighborhood rather than the entire city. Try adding ludo or table tennis close to your shop to attract your initial clients.
Don’t draw terrible boys, please, the idea is to do something that will make your shop noticeable.
There are other ideas too, a sound system is an excellent addition because it is so effective at grabbing people’s attention.
Follow these steps and you will be ready to start making money in your provision store business.
How much money can you make from a provision shop?
Now that we have discussed the process involved in starting your provision store, we will like to also conclude by giving you a break down of how much you can make from a provision store.
The quick answer is, it depends on your location and how effective you are at keeping up strong relationship with your customers.
5 to 10 thousand naira should be your gain if you can sell 50,000 naira worth of goods each day. Would you be concerned about the unemployment problem we are experiencing in Nigeria if you were receiving such a large amount on a daily basis?
The majority of big provision stores make N20,000 or perhaps more every day. Everything relies on the size and location of your provision store. For a single sale of some products, you can make a profit of N20, but for a single sale of other things, you can make up to N300 or even more.
So that’s the general idea of how much you will make in a provision store business. We already discussed before that a provision store is no doubt profitable, you can see from this simple breakdown of how much you can make from a provision store. The bigger you establish yourself, the more you earn
Conclusion:
Are you still in doubt of how to start a provision store business in Nigeria? I guess you shouldn’t be, we have covered a lot, in summary, we have discussed all the challenges you are likely to face and the advantage of starting a provision store, we also shared some advise, and to specify, one of the advise is to ensure you treat your customers well, there is competition in starting a provision store anywhere in Nigeria.
So to succeed you need to have a good customer relationship, also we discussed that to start off on the right foot, the bare minium capital required to start a provision store is N1 million naira, you will need to get a shop, goods and other things, at average, having up to N3 million is required for you to grow well and fast in the provision store business, you need stock your shop with as many types of goods and products that people need, this will give you an edge and make your customers keep coming back.
An advise also in the concluding part of this informative article is to set very good price, if possible make your price a bit lower than the usual In the starting part of your business and build a customer base.
Did you have any questions related to starting your provision store business? Kindly drop them in the comment box below.
