How to Setup an Online Food Delivery Store in Nigeria

There is a growing trend among Nigerian corporate employees during lunch break which is to make orders for food deliveries to their work places. Most businesses have strict work rules which their employees try to obey among which is the one hour break period during office hours. There are consequences when workers violate these rules. But then there the unpredictable nature of city traffic plus the stress of leaving your office to a nearby eatery can have telling effects on one’s productivity. So why not overcome this by resting at work for say 30 minutes and have someone deliver lunch to you, saving you stress, time and the risk of upsetting your boss when you have to ‘adjust to work after lunch out? Moreover these days people are becoming super busy with work and appointments. The business solution is to bring lunch to workers at their work place.

The Market Opportunity for Food Delivery Service in Nigeria at a Glance
Trends	Growing demand for office and home food deliveries exist because people are becoming more cosmopolitan. Families more nuclear, household income increasing, parents ever busy with corporate jobs, work schedule of workers becoming even tighter (leave for work early and return late from work) among others. These means this set of people must have food delivered to their offices or homes since they must eat but lack the time to cook.
Market Size                         Leading Brands Key Locations	This is hard to estimate but my findings reveal 120,000 people will use this service at least 2 times a week in the city of Lagos alone, whereas Abuja has potentially 18,000+ service users                                                                                                                                          Jumia Foods, Mr Delivery, Kilimanjaro, Chicken Republic                                                                                                              Surulere, Ikeja, Lekki, Ikoyi, Wuse 2, Asokoro, CBD, Garki, Wuse, Maitama

Future Outlook for Food Delivery Service in Nigeria (2019 – 2025) 

The business is just new and still evolving (since early, 2011 when the first operators started aggressively marketing the service) but is also growing rapidly. People will sign up with time as the business environment becomes more competitive, as cities become more populated and incomes continue to rise there will always be opportunities for food service deliveries made to homes and offices. Key points to note;

• Lagos, Abuja and Port Harcourt are rapidly urbanizing and these are the main hubs for this service in Nigeria
• A strong entry now into this segment will position a business for strong income and profit making within the next 5 years, as historically new business trends show that Nigerian consumers are quick to key into something once it is proven to be effective and consistent.
• The use of mobile technology (Mobile Apps, cheaper and more sophisticated smart phones) and quick dispatches means the business can be run inexpensively as well
• Marketing costs will progressively decline for operators with strong brand presence within the market
• Large corporate deliveries will gradually start taking form creating more business opportunities for operators

Challenges of Food Delivery Service in Nigeria

There are 8 identified challenges that could threaten the success of this business. One very significant challenge is technical glitches from internet services providers which may slow down the network thus delaying the processing of orders thus affecting sales and business efficiency. There is also the problem town planning which makes delivery awkward for inexperienced dispatchers. The remaining 6 challenges explained in detail upon request (see end of blog post)

Sample Financial Analysis for a Medium Scale Food Delivery Service in Nigeria

Startup Cost Breakdown
Item	Cost
4 Dispatch Bikes Branding Cost Office Setup Rent Mobile APP 3 Months Salaries Contingency Other expenses   Total	600,000 480,000 780,000 600,000 900,000 1,200,000 550,000 900,000 6,210,000

 
First Year Sales

• Gross Sales                            21,600,000
• Gross Profit                           11,640,000
• Operating Expenses               7,290,000
• Profit before Tax                    4,350,000
• Profit after Tax                       3,045,000                 
• Retained Earnings                  1,045,000
• Breakeven Month                   9^th or 10^th
• Breakeven Revenue                17,250,000
• Payback                                  2 years and 3^rd month at most

If you need a business plan on setting up and running a viable food delivery service in Nigeria with a detailed and customized blueprint to compete and thrive call me on: 0803 206 4106 or email me: paulonwueme@gmail.com for details

Sample Business Plan: Car Wash Service in Nigeria

Car Wash Services provide a specialized, convenient service to car owners who need presentable cars on the move. The market is large just as the competition is also very rugged, but this is a very low cost, low risk, high profit margin business which can be setup and run by almost anyone.

Market Opportunity

Picture this situation, you live and work in a busy city with many untarred and pothole riddled roads. Mobility would be very unpleasant with your car getting covered in dust (during the harmattan and dry season) or mud (during the raining season). This becomes worse if your car is constantly on the road for business and official functions. There is a “social stigma” and embarrassment that comes with having a dusty, dirty car with you. To make matters worse business and work commitments may not permit car owners to clean their cars on their own (wake up 4am, leave for work by 6am to return 9pm every weekday). Here is the breakdown;

33 million cars in Nigeria ply busy routes daily 1 in 12 car owners patronize car wash at least 3 times a week 2,750,000 cars washed at least 2 times a week = 5.5 million weekly washes Average price per car wash = 500 naira Potential Market Size = 13.2 billion naira Less than 10,000 car wash centers mostly informally operated Averagely  car wash centers can fetch between 6,000 naira to over 45,000 daily sales

Challenges Affecting Car Wash Service Business in Nigeria

The problems are numerous but there are 5 I want to talk about in this article. The first main challenge is regular water supply. This should not be a problem if you have a borehole but unless you own the building or the borehole you are either going to invest in digging one or simply buying it from water vendors. There is the problem of financial accountability, if you are not at the car wash point throughout you can’t really tell how much is made in your absence, your workers may pocket the money knowing you won’t find out. Third problem location, getting a strategic location that will boost sales is very difficult to achieve. There is also the problem of having permits, local government revenue task force are  constantly on the move and pressure car wash owners with levies – which is not a bad thing but can be excessive to the car wash operators. Car owners pose a problem themselves, they may leave some of their valuables in the car as it is being washed, when something is stolen from the car during the wash, how will the owner be appeased?

Financial Summary

You can generate at least 1.8 million per annum in sales from this business if you can wash 12 cars per day for at least 300 days in a year. Assuming your daily sales targets are met your first year financial projections should look like this;

Startup Cost Summary

• Rent: 240,000
• 3 Months Operating Expenses: 150,000
• Water Supply: 60,000
• Washing Tools and Equipment: 120,000
• Marketing and Branding: 30,000
• Other Tools: 60,000
• Total: 670,000

First Year Profit and Loss

• Total Sales:    1,800,000
• Cost of Sales: 180,000
• Operating Expenses: 720,000
• PBT: 900,000
• Taxation: 300,000
• PAT: 600,000
• Breakeven Month: 6^th
• Payback: 14^th month

 Conclusion

This is an easy business to start and run and can provide a steady flow of income, year on year but even when business isn’t booming your low overheads can ensure you remain in business while many others shut down. There are 4 success secrets in car wash service as well as other detailed market information which is available on request. If you need a business plan on setting up and running a viable car wash service, call me on: 0803 206 4106 or email me: paulonwueme@gmail.com for details

Sample Small Scale Poultry Business Plan in Nigeria

There are two types of poultry businesses in Nigeria namely; backyard poultry and commercial poultry. The backyard poultry is usually a small sized poultry business which most times is run from residences and have a capacity for less than 1,000 birds which are reared for either meat or eggs. Most operators of backyard poultry business in Nigeria run them as an extra source of income for the family hence it’s not surprising to see civil servants and housewives running this business.

The commercial poultry on the other hand is run from farm houses owned by business enterprises engaged in rearing chickens for meat or eggs. Unlike the backyard poultry, commercial poultries need huge capital outlay, technical expertise and complex marketing strategies. It’s not just enough to have birds for sale but getting those birds to the market on time is the real deal with commercial poultries. The faster the sales they make, the more profitable they can become.

Market Opportunities for poultry products in Nigeria

Nigerians consume about 1.2 million tons of poultry meat annually according to Poultry Association of Nigeria whereas all the poultry farms in Nigeria produce 300,000 tons per annum leaving the outstanding 900,000 tons to smuggling since officially there is a ban on importation of poultry products in Nigeria since 2004. 

Secondly, egg production poultry is more lucrative than meat production hence why Nigerian poultry farms generate 650,000 tons of eggs per annum. On average it costs N15 per day to feed an egg laying fowl but that fowl which will likely lay between 180 to 288 eggs per annum can fetch you between N4,500 to N7,200 per annum for each bird. 

The average daily cost of feeding a meat producing fowl is about N13 per day and they can be sold off within 22 weeks after being purchased as day old chicks for between N1,200 and N2,200 depending on their size and breed. The poultry business can also involve large scale hatchery i.e production of day old chicks in large quantities for resale to poultry farms. 

Poultry Industry Challenges in Nigeria

There are many challenges poultry businesses face in Nigeria regardless

• Inadequate finance to fund expansion for small poultries due to risky and unusual nature of poultry business which commercial and micro finance banks are not eager to lend to. 
• Disease epidemics are a recurring theme in this business with bird flu resurfacing in February 2016. This has led to loss of birds by unfortunate poultry farms although government sometimes pays compensation 
• Bird feeds are very expensive 
• Transportation and logistics are major operating challenges for poultry farms in getting their products to their target market 
• Presence of many middlemen and competition leads to low profit margins for poultry farmers 
• Smuggling and illegal importation of poultry meat mostly from Brazil which is much cheaper than locally produced poultry products leads to reduced demand from local consumers 

Financial Projections on Poultry Farming Business

• Total sales for egg laying poultry of 1,000 birds is N8,640,000 and N6,000,000
• On average annual net profit per egg-layer is between N1,200 and N2,400 per annum multiplied by total number of birds = N1,200,000 to N2,400,000 for 1,000 birds
• On average net profit per broiler is between N100 and N400 per quarter multiplied by total number of birds = N1,000,000 to N1,600,000 for 4,000 birds reared per annum
• Return on investment is between 10 to 40% per annum, that means if you invest N1 million into this business you should expect between N100,000 to N400,000 depending on the location of your poultry and proximity to your customers and other operating costs

How Much does it cost to start a poultry business in Nigeria?

The assumption for this startup cost is based on setting up in a residential part of a town or even a village. The second assumption is that the profits will be ploughed back into the business to fund expansion

• Second hand Poultry bird Cages – N96,000
• Poultry House/shed – 250,000
• Animal Feeds – N120,000
• 100 Birds – N120,000
• Rent on 1 acre of Land – N50,000
• Contingency – N150,000
• Total – N786,000

Paul Onwueme is a professional business plan writer since February 2014 and has achieved respectable results with his business plan writing service with some of his clients attracting funding to their business or securing bank loans. He can be reached on: 0803 206 4106  or email me: paulonwueme@gmail.com