One of the lucrative businesses to venture into in Nigeria right now is the Palm oil business. It is, without doubt, one of the profitable business ideas any entrepreneur can capitalize on and realize huge profits.
Hence, if you will like to diversify your business empire or become your boss by establishing a profitable and reliable business venture, below is a comprehensive guide on how to start Palm oil business in Nigeria.
But before then, you must know that the importance of palm oil is beyond kitchen usage. Apart from using it to cook, palm oil is also medicinal, it has vitamin A content which is very good for eyesight and it can be used as an antidote for stomach upset.
As such, its diverse usefulness gave rise to its huge patronage. So if you will be kick-starting this business any time soon, you might want to consider reading through this guide for a better understanding of how to successfully start the business.
How To Start Palm Oil Business In Nigeria Successfully
1. Define your niche
The first step to starting a palm oil business is identifying and defining your niche. This is so because there are three distinct and definite niches you can actually choose from in the palm oil business industry and they are:
- Palm Tree Plantation
- Palm oil mill
- Bulk trading of palm oil
Palm Tree Plantation
This particular aspect of the oil palm business requires intensive start-up capital. Since the business involves planting palm seed on large acres of land, huge money will be needed to secure the land.
However, if you already have the land to be used, it’s important you still note that you will need to wait for 5 to 10 years for the palm tree to grow and incubate. If you can do this, once the palm tree is grown and due for harvest, then you are in money.
Palm Oil Mill
The palm oil milling or processing business is another profitable niche in the palm oil business realm. This business also requires huge investment capital to buy all the needed milling machines.
If you like, you can locally fabricate one or simply buy and import one from abroad. Whatever the one you choose, you can be using the palm kernel milling machine for a commercial activity where people will be bringing their palm kernel for milling, processing, and oil extraction.
And if you like, you can be using it to your private advantage. That is, you plant palm kernel seed, harvest it, and extract the oil yourself for bulk selling. And you can be buying the palm kernel as raw material, mill them, process them and extract their oil for commercial purposes.
Bulk Trading of Palm Oil
The third sub-niche under the plan out business is investing huge capital in buying and re-selling (in bulk) palm oil.
2. Market research
Once you’ve identified the particular niche you will be investing in, the next cause of action is to embark on an extensive market survey on the chosen niche. A proper feasibility study of the palm oil business is very important if you are determined to succeed in the oil business.
In the cause of your research, you must understand the nature of your chosen niche and you must equally find the answer to questions like; is the palm oil business time-consuming? Who are your potential target customers? Where can you find them? Where can you get cheap palm kernel? Etc.
Once you have successfully found answers to all these questions, then you are halfway through on your mission to start a palm oil business. Most importantly, you need to know and identify your potential competitors and find lasting solutions on how to compete alongside them.
3. Write a business plan
There’s no way you can start a business venture from the scratch without having an effective business plan or else if you want to see the business crumble in the next few years. Just like any building, a business plan is akin to the foundation, it’s where the business will be built upon.
4. Source for fund
You can’t start a palm oil business in a vacuum, and as such, there is a need for you to source for investment capital. But if you have the needed startup capital all ready, you can skip this step but if the reverse is the case, kindly read on.
Specifically, you can source your palm oil business investment capital from a family member, friends or any financial institution. And if you have a well-written business plan, you can pitch it to investors and wait for their response.
Your choosing niche in the palm oil business industry will determine the kind of location that will be perfect for you. If you will be dealing in the Palm kernel business, then you’ll need a place that is very fertile and good for farming.
Should you be going for palm oil milling and extraction, then your ideal place is any area that is close to palm oil plantations. And if your chosen niche selling of already extracted palm oil in bulk, then a commercial or market area will do just fine.
6. Get all the necessary tools
Depending on your chosen niche in the palm oil industry, there’s a need for you to get all your equipment ready. As a palm kernel farmer, you will need to get all your farming tools ready.
And if you will be starting the palm oil processing business, there is a need for you to get all the necessary milling machines before you open for business.
7. Open for business
Once you’ve successfully carried out all the above steps, the next thing in your strive to start a palm oil business is to open for business.
8. Create awareness
This is the last step on how to start a palm oil business. You need to market your business and let your target audience know that you are in the market. Implore all the necessary marketing techniques and use them to your advantage.
If you follow the above steps on how to start palm oil business judiciously, you stand the chance to build the business venture into a very profitable and productive business venture.