Step One: Find a Good Location
The secret to success in this business lies in achieving a large volume of sales per day. You therefore should locate your business in an area that is adequately populated. The more walk-in customers your ATM can attract, the better. But what if finding such a location proves difficult? Well, worry not.
You can approach your nearest supermarket or mini-market and negotiate a revenue sharing agreement. Like there is one guy from kahawa who has partnered with Quickmart. They will give you the space and you will give them the machine and vegetable oil to dispense. Smart…isn’t it?
Step Two: Choose a Good ATM Machine
Choose a machine that does not strain your budget and one that has enough capacity to sustain your customers’ demand. You can start small with a 100 litre machine and then graduate to a bigger 500 litre machine as demand rises.
As for purchasing the machine you can either buy one locally from local manufacturers like Herritech Ventures or import directly from Italy. Locally manufactured machines are cheaper Ksh (90, 000- 110, 000) and as you know, it’s a good idea to BUY KENYA, BUILD KENYA. Here are some tip that will come in handy in your search for a good vegetable oil ATM machine.
*If importing, consider buying the machine in separate parts to be assembled locally. That will help you save on tax.
*Generally, look for a machine that is easy to use. Preferably one whose technology can be understood even by kids.
*Look for a machine whose spare parts are readily available locally and insist on warranty cover on all your purchases.
TIP: we highly recommend you to purchase one locally because of maintenance that may be required and spare part availability locally . Also remember locally made is way cheaper than imported which costs between 250,000 to 400,000 before tax
Step Three: Arrange With Cooking Oil supplier and get relevant licenses.
In order to get consistent supplier, it is highly recommended to consult vegetable oil suppliers like Bidco Kenya, Bahari oils who will deliver to your station.
Also you need to a license for operating the business (business permit) .Remember cooking oil is not perishable hence, doesn’t require any board licenses.
A small business house will cost rent of Ksh 6000, and business permit will cost you Ksh 4000
HINT: Areas that fall in Machakos, Kiambu or Kajiado counties tend to have cheaper single-business permit charges than ones in the core Nairobi despite their proximity to the city (Examples: Ongata Rongai (Kajiado), Syokimau (Machakos), Githurai 45 (Kiambu), Kahawa Sukari(Kiambu), Kahawa Wendani (Kiambu), Ruaka (Kiambu), Mlolongo (Machakos), Kitengela (Kajiado)), pipeline,dandora, stage mpya,
How Much To Spend As You Start (Estimates)
Buying Vegetable Cooking oil ATM (100 Litres) – Ksh90, 000
Rent & Deposit – Ksh12, 000
Transport – Ksh1, 000
Relevant Licenses – Ksh4, 000
Maximum starting budget = Ksh110, 000
Profit potential (estimates)
A well-established vegetable cooking oil ATM can sell over 160 litres of vegetable cooking oil per day. This is because ATM milk is of the same quality as packaged vegetable cooking oil yet 20% cheaper. So provided your shop is clean and your customer service is on point, there is no reason as to why you should not sell more than 80 litres a day.
There is even more potential if you partner with a renowned supermarket on a revenue sharing agreement. That way you can sell more than 300 litres of vegetable cooking oil per day.
Okay…let’s stop day dreaming and stick to the 80 litres for purposes of calculations.
CALCULATIONS
Four- 20 litre jars of oil each @ 2100 Total= 8,400
Sell 160sh per litre total sales (160 X 80 ltrs) Total = 12,800
PROFIT per day =12,800 – 8400 =4,400
Estimated Expenses per day (rent=200+employee= 400) total =600
*NET PROFIT = 3,800
*Monthly NET PROFIT= Ksh114, 000
*MINIMUM PROFIT per Month = Ksh114, 000 (Per ATM)
Going by this rule, you will need just 2 month to recoup your initial investment.
Final word.
Vegetable cooking oil atm is easy to start up, because it doesn’t require complex licenses to get going. More so, it takes relatively small space hence can be started just outside your shop to cut cost on a new business house.Further, people can join hands and open one then another and keep generating money. Remember cooking oil is not perishable it can even stay 3 months without going bad. Isn’t that something worth pondering upon?
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