Are you considering starting a provision store business in Nigeria? With the economic situation in the country, this is a wise financial decision to make.
As a successful businesswoman in Nigeria for the past five years, I recommend starting a provision store to become your own boss and earn a steady income.
However, competition in this market is tough, with numerous shops selling the same products.
But don’t worry, in this article, I’ll be sharing my experiences and insights on how to start a provision store business in Nigeria.
I will also share with you some common mistakes to avoid, as well as some great strategies to overcome market competition. Let’s dive in.
Is Provision Business Profitable?
Yes, a provision store or grocery business is profitable in Nigeria. Meeting the demands of your customers is key to making a good profit from the business.
The most reliable way to make money is by helping people solve their problems, and a provision store does this in the most basic fashion.
As long as people exist, there will always be a demand for provisions.
By offering good customer service, quality products, and competitive pricing, you will find yourself making a lot of money each day.
How Lucrative Is a Provision Store Business in Nigeria?
A provision store business is a highly lucrative venture in Nigeria.
As an experienced businesswoman in Nigeria, I can confidently say that this is one of the most profitable businesses you can start this year.
By providing basic necessities to people in your community, you are solving a problem that is always in demand.
In my neighborhood alone, there are families who run their entire household on the profits from their provision store businesses.
The amount of money you can make from a provision store business depends on various factors, such as the size of your shop and the location.
However, it is not uncommon to make anywhere from N5000 to N50,000 per day.
How Much Will It Cost to Open a Provision Store Business?
The cost of opening a provision store business in Nigeria varies depending on several factors. Here are some of the things to consider:
- Licenses and permits
- Miscellaneous Expenses
The cost of renting a shop is a significant expense. It varies based on the location and size of the shop.
For example, you can find a well-sized shop in a good location for N100,000 per annum in Enugu, but this can be difficult if you are living in Port Harcourt or Lagos.
You can avoid the expense of a shop by finding a good location where you can place a container. Containers are always cheaper as you only have to pay for the land.
If you are living in Lagos, use this link to get an estimate on the price of a shop
The cost of stocking up your store depends on the size of your shop and the types of goods you want to sell.
When you start a provision store, it’s important to find out what people in your area want to buy and try to have those things in your store.
One mistake a friend of mine made when he started a provision store is having too much of one brand and not enough of the other.
For example, having too much CloseUp toothpaste, and not enough Oral B.
If you have too much of something, it might go bad and you’ll lose money. It’s a good idea to do your research and only buy more of the things that people are buying a lot of.
This way, your customers will be happy and you’ll avoid getting your money stuck in a place.
You will need to buy shelves to display your products, so people can see what you have for sale.
Shelves are made of different materials like wood or metal. Choose shelves that are sturdy enough to hold your products.
Another important piece of equipment is the cash register. This is where you will keep track of sales and money.
Cash registers vary in price and features, so choose one that meets your needs and budget.
You can find a variety of cash registers on Retail Point.
Refrigerators are also important if you plan to sell perishable items like food or drinks. They keep products fresh and cold, which is important for food safety.
Like other equipment, the cost of refrigerators varies depending on their size and features.
Licenses and Permits
To start a provision store in Nigeria, you will need a trade license and a business permit. You will also need to register your business with the Corporate Affairs Commission (CAC).
These are things like Nepa bills, your transport to and fro, and maybe tiles and other fixtures you’ve installed to spice things up.
Little…little expenses, here and there, you know what I mean…
The cost of starting a provision store business can range from as low as N50,000 to as high as N5,000,000, depending on the factors mentioned above.
It’s important to create a budget or a business plan and determine how much you can afford to invest in the business.
Here is how to create a budget for your business.
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How to Start a Provision Store Business in Nigeria
Write a Business Plan
To start a provision store in Nigeria, you need to make a plan. This is what is called a business plan.
A business plan is like a map that helps you know what to do and where to go.
In the business plan, you will have things like what you want to sell, how much things will cost, and how much money you will need to start.
Also, look at other stores and figure out how you can do things better than they do.
Get Your Required Capital
If you are reading this article, I am assuming that you have already set money aside for this venture. If not, your business plan should reveal how much money will be enough.
If the amount of money you need exceeds what you planned for in your business plan, you may need to cut some costs or try to raise more money.
Borrowing money to support your business is not advisable because the pressure of your loan may push you to make decisions that will work against your business.
It is always better to use the money that you have on hand and grow your business with it.
As time goes on, you can request more items from your suppliers, but only after you have been in the market long enough to know what works and what doesn’t.
Register Your Provision Store Business to Make It Legal
Depending on the size of your shop, you may need to register your business.
For example, a woman in my street in Lagos has not registered her business because her shop is on a street corner and serves a particular group of people in the area.
However, if your provision shop is large and in a public place, it is wise to register your business to avoid legal problems with the government.
Another factor that determines whether you should register your business is the state where you are located.
Some states are more lenient when it comes to registering your business than others.
The good thing about registering your business is that when you do, it becomes a recognized legal entity in your state and covers you in a wide variety of situations.
When registering your business you will be asked for the name of your provision store business, so it is wise to think of a name before going.
How to Succeed in Provision Store Business.
Running a provision store business in Nigeria requires careful planning, hard work, and perseverance.
To make your provision store successful in Nigeria, here are some important things you need to do:
Research the Market
Find out what people in your area want to buy, what other stores are selling, and how much they charge.
This will help you make smart choices about what to sell and how much to charge.
Pick a Good Location
The place where you put your shop is really important. You want it to be easy for people to get to, easy to see.
Think about things like where people can park, how close it is to homes, and how many people walk by.
That way, more people will see your store and want to shop there.
Sell What People Want
It’s important that you have things people want to buy. From time to time, you can also try selling unique things that other stores don’t have.
For example, try to identify the type of biscuit that is popular in your area, but once in a while bring in something new and add to the excitement.
But do so in small quantities to see how they react to it.
Be Friends With Your Suppliers
Have good relationships with the people who supply you with the things you sell. Fostering a good relationship with your suppliers will help you stay ahead of your competitors.
You’ll be able to buy at a cheaper rate and get a heads-up when prices increase in the market.
Treat Your Customers Well
Customers are the most important part of your business, so make sure they feel welcome in your store.
Keep things clean, and sell at a good price.
Maybe you can even give discounts if people buy a lot of things at once or have a special deal if someone keeps coming back to buy from you.
If somebody requires that you reduce the price for him/her, do so if you can. You can always recover the money from another item.
But if you intend to stick with a price, then you use writing tape to make every price permanent.
The intention is to make your shop a nice place where people want to be
Get a POS machine for customers who want to pay with their bank cards. You can also accept transfers from people who do not have bank cards.
But make sure you tell them they’ll have to wait for you to confirm their transactions.
If the local brick-and-mortar banks like Zenith and Access are too slow to process your daily transactions, switch to digital banks like Kuda and Opay.
Keep Track of What You Have
Keep track of everything you have, so you don’t run out of things to sell. And also be on the watch so you don’t buy too much of something you can’t sell.
Remember, running a business takes hard work and being able to change when things don’t work out.
But if you follow these tips, you’ll have a better chance of running a successful provision store business in Nigeria.
List of Best-Selling Provision Items in Nigeria
|#||Provision Store Items|
|2||Wheat flour, Semovita, Garri|
|3||Sugar (Grinded and cube)|
|9||Milk powder (Tin and Sachets)|
|10||Instant noodles (Indomie Noodles)|
|11||Pasta (Spaghetti and Macaroni)|
|12||Canned vegetables (Green beans, Sweet corn, etc.)|
|13||Canned fruits (Chivita or Chiver’s Pineapple Pieces)|
|14||Canned meat (Corned beef)|
|15||Bleach, Izal, Dettol|
|16||Sweets and Chewing gums (Tom Tom, Baba Blue)|
|17||Jams and spreads (Blueband, Mayonnaise)|
|19||Chips and snacks (Biscuits, Pringles)|
|23||Milk (Three Crown, Peak)|
|27||Soaps, (Toilet and Liquid)|
|29||Cold Water Starch|
|30||Cleaning supplies (Klin, OMO, BabyMama)|
|31||Personal care products, (Body lotion, Perfumes, Hair creams.)|
|33||Cereals (Cerelac, Golding Morn)|
|35||Chocolate bars (Hershey’s,)|
|44||Canned fish, (Sardines, Geisha)|
|46||Dried fruit and nuts|
|47||Instant hot chocolate|
Factors to Consider When Renting a Shop or Container
When renting a shop or container in Nigeria, there are several factors to consider, including:
- Location: The location of the shop or container is crucial in determining its suitability for your business.
You want to ensure that it’s situated in a strategic location that will attract customers and be easily accessible.
- Size: The size of the shop or container is also important, as it should be able to accommodate your inventory, equipment, and staff comfortably.
You don’t want a space that is too small or too big for your business needs.
- Security: It’s important to consider the security of the shop or container, especially if you will be storing valuable items or equipment.
Look for spaces that have security features like CCTV cameras, security guards, and secure locks.
- Rent Cost: The cost of rent is an essential factor to consider. You want to ensure that the rent cost fits into your budget and won’t eat up too much of your profits.
- Infrastructure: Check if the location has basic infrastructure such as electricity, water, and good roads.
- Legal Requirements: Ensure that the shop or container has all the required licenses and permits required by the government.
These are environmental fees and other nitty-gritty fees that are paid in Nigeria.
What Are Some Challenges in a Provision Store Business in Nigeria?
There are several challenges that can arise in running a provision store business in Nigeria. Some of these challenges include
- Fluctuating prices of goods,
- Theft and security,
- Poor infrastructure,
- Regulatory challenges, and
- Limited access to credit.
Fluctuation of Prices of Goods
Here are some simple tips to help you deal with fluctuating prices:
Watch out for changes in prices and be prepared to adjust your prices accordingly. You can do this by checking prices at different markets or stores.
When prices are low, consider buying in bulk so you have enough inventory to sell when prices increase. This will help you avoid buying goods at high prices.
Be open to adjusting your prices based on what the market dictates. If prices increase, increase your prices to maintain your profit margin.
Build relationships with suppliers. (I already talked about this,) Having good relationships with your suppliers will help you get better prices and deals.
Having a variety of products will help you avoid being too reliant on one product or market. If the price of one product increases focus on selling other products that are still affordable.
Dealing with competition in the provision store business is challenging, but there are some simple tips that will help:
Identify your competitors, their strengths, and their weaknesses. This will help you understand how to differentiate yourself and which areas to focus on.
If your competitors close early, you may want to stay open late. If they close on Thursdays, make sure you are open on Thursdays.
If they fail to provide their customers with good bags when they finish shopping, make sure you have the necessary packaging materials for your customers
The point is to fill in all the gaps they have failed to fill.
Provide high-quality products that are better than what your competitors are offering. This will help you attract and retain customers.
Your products should be clean and well-kept. If they are meant to be sealed, make sure they are properly sealed.
These things will make your shop one that people will want to visit again and again.
Offer friendly, and efficient service to your customers. If somebody has a complaint, take your time to listen to them.
Arrange your products in a way where you can easily locate them. Be fast and responsive. Nothing beats a shop that attends to lots of people quickly.
Once your shop is known as being efficient and has the things people need, people will pass your competitors and come to you.
Offer prices that are competitive with other stores in the area. Consider offering discounts on bulk purchases or introducing loyalty programs to encourage repeat customers.
Keep an eye on market trends and be willing to adapt to changes. This will help you stay ahead of the competition and provide products and services that are in demand.
Competition is a good thing because it helps you improve your store and offer better products and services to your customers.
Theft and Security
Provision stores in Nigeria are often targets of theft and burglary, which leads to significant financial losses for the business owner.
Here are some tips for dealing with theft and security challenges for a provision store business in Nigeria:
Invest in a good security system that includes surveillance cameras, alarms, and locks. This will help deter thieves and also provide evidence if theft does occur.
Teach your employees how to identify suspicious behavior and what to do if they suspect theft. Make sure they know how to properly lock up the store at night.
Make sure your store is well-lit, both inside and outside, to make it less attractive to thieves.
Store high-value items, such as electronics or expensive food items, in a secure location or behind a locked display case.
Build good relationships with neighbors, including nearby businesses and local law enforcement. This will help create a safer environment for your store.
Develop a plan for how to respond if theft does occur. This may include contacting the police, reviewing security footage, and taking inventory of any missing items
The poor state of infrastructure in Nigeria, such as bad roads and erratic power supply affects the smooth running of a business.
In as much as poor infrastructure is something every Nigerian has to face, here are some tips to help you move along:
Given the frequent power outages in Nigeria, it is important to have a backup power source such as a generator or an inverter.
It is frustrating when customers come to your shop for cold drinks only to leave disappointed.
Bad roads make it difficult to receive and transport goods, so it’s important to keep your inventory organized and up-to-date to avoid any losses or confusion.
Plan ahead and schedule deliveries in advance to avoid delays or cancellations.
Limited Access to Credit
Provision Store owners in Nigeria often face limited access to credit, making it difficult to expand or invest in the business.
If you are just starting your business, consider starting with a smaller store and gradually expanding as you make more profits.
This will help you avoid taking on too much debt and can make it easier to secure credit in the future.
Even if you can’t access credit right now, make sure to pay all your bills on time and build a good credit history.
This will make it easier to access credit in the future when you need it.
Where to Get Provision Items
Wholesale markets are ideal for buying provisions in bulk. They offer products at discounted prices.
Buying in bulk means you need to have enough space to store your purchases.
It’s a good idea to compare prices at different wholesale markets before you buy so that you can make sure you are getting the best possible value for you.
Examples of popular wholesale markets in Nigeria include the Eko market, CMS in Lagos, and Sabon Gari Market in Kano.
Start Selling Your Provision Store Items
There should not be a day appointed for starting your provision store unless you want to have a grand opening.
Once you are set and ready, start selling.
Starting to sell things as soon as possible in your store is very important for two reasons.
Firstly, the sooner you start selling, the sooner you can start making money. This is important because it will help you build your store and make more money in the long run.
Secondly, starting early will help you figure out if there are any problems with how your store works.
This way, you can fix them before they become big problems.
So, if you want to have a successful store, it’s important to start selling as soon as you can. And avoid making the mistake of selling below your cost price because you want to make your customers happy.
To avoid mistakes, write down the prices of these goods in a book you can consult.
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