A recent study shows that Nigeria consumes 110,000MT of cooking gas per annum. What is the implication of this for the Nigerian entrepreneur? It shows simply without a doubt that cooking gas business in Nigeria is a risk what delving into in Nigeria.
Nigeria is as well-known, one of the oil producing countries in the world. Apart from that, it has been known to derive a larger percentage of its revenue from oil. Petroleum products also globally are an aspect of economy that you can never go wrong with. Now, of all petroleum products, gas seem to be the least estimated. As a matter of fact, statistics conducted some years ago showed that the only about 5% consumption potential of LPG was used.
But presently, we are seeing changes in the consumption of cooking gas. Most people are seeing the usefulness and convenience. One of the menaces of the Nigerian society is lack of electricity. And although, most people would prefer to rely on electricity in their kitchens, that preference is on realistic in Nigeria. A lot of these people therefore substituted with kerosene. But it as expected, they discovered cooking gas, which is arguably a better alternative to kerosene because not only does it cook food faster, it is also ultimately cheaper.
After all is said and done, what the above premise is driving at is that the search for a business to go into in the country is over. If you are an investor or just a person who wants to go into business, cooking gas business is the one for you. Even in this period of recession when businesses are closing down, in Nigeria, petroleum products don’t run at a loss, much less, the fuel used for cooking. As bad as the economy is or might be, people would still eat and they would need to buy fuel to enable their cooking. Hence, the continuous relevance of cooking gas.
However, because it is a petroleum product, there are a number of things that would have to be put into consideration before you can start the business in Nigeria.
Of course, like all business, you would need to get all your factors of production, which are land, capital, and labour.
Land: Apart from the fact that generally, you need a space for your business, in the case of cooking gas, the aspect of land is even more crucial simply because of the environmental and health implications of cooking gas. Therefore, in accordance to the requirement of the DPR (Department of Petroleum Resources), the position of the plant must be at least 15meters from any building containing flammable materials, for instance, residential buildings, filling shed among others. The reason for this is because before you would be granted license (which we would be addressing), the DPR would come for inspection and they would need to see this is place before your application can be approved.
Capital and Labour: This does not necessarily need to be over flogged. There is not business that you don’t need capital and you would need a lot of it in starting cooking gas business, to be candid, because you would need to buy all the equipment and those are also some of the things the DPR would look out for. Apart from the DPR needing to see this, you cannot really function without this equipment. It would be like a doctor without a stethoscope. Some of the equipment necessary include; the testing pool, valve screwing, electronic carousel, mechanic carousel, electronic scale, mechanic scale, and many more. In the same vein, you would need to employ capable hands who would help you run the business.
License: This is the stage peculiar to the Nigerian situation as the requirements are based on that stipulated by the DPR. It is important to note here that the best way to have all the information at hand is by visiting the DPR or getting a copy of the procedure and conditions of the DPR for the issuance of license online so as to have more detailed information.
However, the following information would also help in getting in setting up a cooking gas business. You will be required to have the following permits:
Apart from the above, you would also need documentation to process the state L&P and the DPR permits;
You also need to register your business with CAC (Corporate Affairs Commission). This is the governing and regulatory body for businesses in Nigeria. The implication for this is that if you want your business to be recognized as legitimate and you don’t want any run-ins with the law, you would need to register your business. All you need is your registration fee and fulfill their requirements. Additionally, you would need to find out if the location would attract any other registration.
Different states have different laws governing businesses and maybe cooking gas business in particular. The last thing you need is to fulfill all the requirements of the federal body only to have the state at your tail. So be sure to ask around and ensure you fulfill all requirements. Though some of them might be inconvenient, but the bright side is that you would not have to be on the lam, hiding from the law enforcement agency because you are flouting a rule. If for nothing, but for the fact that your case doesn’t turn into a case of “the guilty runs when no man pursues,” it is important to just follow the law.
Insurance: Insurance is not indigenous to Nigeria and so, many Nigerians do not see the use. Now, this isn’t compulsory but you need to see the need to insure your business, mainly because you are dealing with flammables. Other business might take the risk of not insuring their business but you cannot afford to take that risk. Although, gas plants rarely blow up as far as you are keeping all your safety measures but we cannot be too careful. Sometimes, to be realistic, things beyond our control happens. If moments like that arise, you would not run at a loss. You could research to find one suitable for your business.
Marketing: Nigerians are known to not take marketing seriously, especially when it has to do with small businesses. But we have to come to the realization that if you do not create awareness, there is a likelihood that people would not know about it. There are a lot of people that would naturally be in need of whatever you are selling but when they have no idea you are selling, then your opening a business would most likely be an exercise in futility. If you want your business to be known, you have to make conscious effort to make it known. However, it is important to note at this juncture that there is a difference between doing something and doing it well. You have to master the art of marketing and advertising. If you can afford it, you could always consult with an advertising firm and if you can’t, just be creative about what would work in that locality.
Get Knowledge: Knowledge is universal and is not restricted to any particular area. If you want to succeed in any endeavour, you are in need of knowledge. Even though, this is coming at the tail end of the list, it is not less relevant than the above. As a matter of fact, it is advisable that you get knowledge before delving into the business. You should plan before embarking on it in the first place, so it will not be a case of a man testing the depth of a river with both feet. Knowledge would give you insight into the dos and don’ts of the business as you would be learning from the experiences of people before you. And apart from that, knowledge would make you know if you are equipped for the business.
Similarly, it would do you a world of good to get training. You might find it demeaning to go apprentice in an established plant for a while but it would be beneficial. There are a lot of intricacies and secret strategies of the business that would be somewhat esoteric and you would not be privy to if you do not get into the system. Ever wondered why most people who own TV or radio stations today were formerly broadcasters or presenters before? In the same vein, try to work with someone in the business so as to acquaint yourself with all you would need to work out your own business.
Be wise: After all is said and done, you have two choices, read this article, decide you want to go into cooking gas business and completely ignore all you have read here or decide to go into the business and out all you have learnt into practice. Wisdom is usually defined as the application of knowledge. Having the information would not help you if you don’t apply the information you have learnt.
Therefore, if you decide to go into cooking gas business and you want to be successful at it, be sure to put all the above into practice. And all we can do at this point is wish you the best.