How To Establish a Profitable Cooking Gas Business In Kenya

The cooking gas business is booming in Kenya as more households embrace clean cooking. Most homes own at least one gas cylinder if not two in urban areas. Hence, opening a cooking gas business in Kenya can fetch you massive returns.

To start a cooking gas business you need an initial capital of Kshs 50,000 and above. This will earn you a profit margin of up to Kshs 500 for the 6kg cylinder and Kshs 1,000 for the 13kg cylinder. 

Customers prefer buying from a reliable gas dealer for timely delivery and safety. You can gain a wide customer base by providing different gas types, implementing safety measures, and partnering with a reliable delivery service.

In this guide, I will cover the following:

• The basics of an LPG Gas dealership
• How to start a cooking gas business (step-by-step)
• Tips to boost your cooking gas business

Let’s dive in!

The ABCs of LPG Gas Dealership

Before setting up your store, you must get acquainted with the industry. Some of the key areas you should learn about include:

The Requirements of an LPG Gas Business

So, what do you need to start a cooking gas business in Kenya?

• Gas Cylinders: You’ll need 6kg and 13kg gas cylinders from Total, K-Gas, Oilibya, and Afrigas; these are the most common. You’ll also need sea, Pro, Lake, Mid, and Top gas cylinders. 
• Supplier Agreement: Negotiating contracts with suppliers show the estimated initial costs and deposits. 
• Safety Measures: Safety measures are necessary when operating a cooking gas business. The authority demands you train your staff, implement protocols, and purchase safety gear.
• Legal Compliance: Besides getting licenses and permits, you should adhere to the safety regulations. These include transportation, storage, handling, and installation.

 Why Invest In Cooking Gas Business In Kenya

With so many business ideas, you’re perhaps wondering why you should invest in the cooking gas business. Here are a few reasons why you should invest your hard-earned money in an LPG gas dealership

• Increasing Demand For Clean Energy

People have become more eco-conscious, adapting more environmentally friendly cooking solutions. Moreover, LPG gas offers unrivaled convenience and flexibility helping residential, commercial, and industrial sectors perform more efficiently.

As a result, there will always be a demand for cooking gas as it has become the number one energy source nationwide.

• Environmentally Friendly 

Selling cooking gas allows you to contribute to a cleaner environment as LPG lowers carbon emissions and deforestation. You become part of the greater course supplying people with clean energy while enjoying significant returns.

• Authority Support

The government encourages the use of clean energy. Thus, it supports LPG businesses to ensure the availability of cooking gas countrywide. 

• Significant Returns

Regardless of your stand on environmental cleanliness, you can still invest in cooking gas to enjoy massive profits. Two things you need to note; the high demand means more orders which increases your sales.

Secondly, your profit margins can go up to Kshs 500 or Kshs 1000 for the 6kg and 13kg cylinders respectively. Why not invest in the cooking gas business in Kenya to enjoy a decent income?

How To Start a Cooking Gas Business In Kenya

If you’ve worked in a cooking gas business, you might be acquainted with the process of starting one. However, it can be challenging if it’s your first time as you don’t know all the requirements.

Fortunately, we take you through all the steps required to help you establish a profitable cooking gas business.

Step 1. Research and Plan 

Conducting thorough market research and planning is the most crucial step before starting a cooking gas business. Reason? This stage determines the location of your business, an estimated budget, and the gas product you’ll be selling.

As a result, you should invest enough time and resources to do market research that will help you identify the following:

• The fast-moving gas cylinder 
• The gas cylinder with the lowest demand
• The best location for your cooking gas business
• The suppliers in your region
• Your initial capital budget
• The competition
• The legal and regulatory requirements

Once you gather all the above information, prepare a business plan to give your new venture a map to follow. The plan should clearly state your marketing and growth strategy, where you’ll establish your premises, and budget your startup funds.

Step 2. Get Legal Requirements

The cooking gas business is a sensitive sector that requires you to comply with regulatory measures. For instance, handling, storage, disposal, and transportation must be done with caution,

Similar to other businesses, it’s compulsory to get permits and licenses for the following activities:

• Construction
• Environmental regulations
• Safety compliance
• Business operation

To ensure you don’t miss any new requirements, visit your county office and get the updated list of cooking gas business prerequisites.

Step 3. Choose a Suitable Location

During your market research, you’ll identify multiple vacant shops within your area of preference. Here are factors to consider when choosing your business location:

• Visibility

How visible are the vacant business premises you found during your research?

Which store can a customer identify easily?

The shop that’s easy to identify is the best as it will help you market your coking gas business to new residents and prospective customers.

• Accessibility

Your business location should be easily accessible for your staff, customers, and prospective clients. Don’t rent a space that’s too far from the residential areas as they’ll find a more convenient alternative.

• Security 

Starting a business takes a lot of discipline and hard work; you don’t want all your money going down the drain after this hustle. 

That’s why finding a rental space in a secure area is crucial to avoid losing your stock in regular theft cases.

Your business location should boost your business growth. You can achieve this by choosing a premise close to residential buildings to attract frequent customers.

Step 4. Find The Right Supplier

A good LPG gas supplier adheres to the regulatory requirements to deliver approved cylinders that are safe for your customers. They should have a wide range of gas brands to ensure you’re fully stocked so your customers can find every gas solution they need under one roof.

Your supplier’s pricing should also be suitable for you to sell your gas stock at affordable prices while making a considerable profit margin. Remember, every businessperson is in the market to make returns!

The right supplier stays updated such that when a new gas enters the market and there’s a high demand for it, they can help you access it. Hence, meeting the new market demand and earning massive returns.

Remember the Pro gas craze that saw almost every Kenyan household purchase it? This could work like clockwork for you.

Step 5. Hire Staff and Train Them

This step may seem simple, however, you need to find the right people for handling, distribution, and customer service. In addition, you should train them on aftersales services such as safe transportation and installation. 

Don’t forget to establish a seamless coordination between the shop attendant and delivery personnel. This will facilitate effective communication and excellent customer service. For quick and timely delivery, hire a trained rider well-acquainted with the area.

Step 6. Customize Your Premises

You need secure storage spaces that will display your gas stock for easy identification by customers. So, hire a professional to help you customize shelves for storing and displaying gas cylinders.

Most cooking gas businesses in Kenya hire welders to make robust outdoor structures with partitions. This makes it easy for customers to view the gas cylinders available while guaranteeing the safety of your stock.

Step 7. Get Your First Stock

Once, your storage is set up, contact your supplier to deliver your first stock. When implementing this step use the list of fast-moving brands from step 1. This will optimize your sales and returns while eliminating the risk of dead stock. 

Clean the new stock and organize them depending on the size and brand. Then launch your cooking gas business!

When starting your new business apply the entrepreneurial mindset; be resilient, create value, and offer solutions to your target audience.

How To Boost Your Cooking Gas Business In Kenya

A business’s success relies on numerous factors; internal and external. Fortunately, you can implement effective strategies to help you boost your sales and returns.

Here are a few tips to boost your cooking gas venture:

1. Marketing and Branding

With the numerous numbers of gas suppliers in the market you have to stand out to attract customers. Develop an effective marketing strategy that will increase your reach and position your business as the most reliable gas dealer.

To accomplish this, print small posters with your premises image and phone number. Then, stick them in different residential buildings where customers can refer to when they need gas refill services.

Branding plays a key role in marketing your services. You can purchase an appealing banner with your shop’s name on it. Ensure the size of your business is visible and apply a conspicuous shade.

2. Excellent Customer Service For Retention

How you communicate and address your customers will determine whether they’ll become repeat customers or shift to a different store. So ensure you train your staff on conflict resolution to resolve customers’ complaints.

In addition, educate your staff on business ethics to avoid unnecessary conflicts. Some of the practices they can employ in this area include timely delivery, dispatching the right gas brand, and cylinder size.

3. Adhere To The Safety Measures

You’ve seen or heard of fake gas cases that caused serious harm and damage. Entering into this industry requires you to exercise extra caution for your client’s safety.

You can minimize the risk of accidents by purchasing original gas cylinders. Then help your clients to install their gas cylinders appropriately while training them on safe handling.

Teach them a few tips like sprinkling a little water to check for gas leakages instead of lighting a match stick as this could cause an explosion. You can also caution them against shaking the gas when checking the gas level.

4. Implement Best Financial Management Practices

Accounting for your money is essential if you want to witness significant business growth. As a result, you should train your staff to apply the best bookkeeping practices showing the money coming in and money going out.

In addition, develop a budgeting method that prioritizes fundamental elements of your business. For example, stock, rent, wages, and utility bills for seamless business operation.

5. Develop a Growth Strategy

Scaling your cooking gas business is the fastest way to increase your income and accomplish your financial goals. Thus, you should have a growth plan that will help you expand your business.

Growth in this business may mean expanding your shop size to increase your stock. Alternatively, you may advance to the next level – becoming a liquid petroleum gas wholesaler and retailer, serving small gas businesses and consumers.

Frequently Asked Questions

1. How Do I Become a Gas Retailer In Kenya?

To become a gas supplier or retailer in Kenya you’ll need the following:

• Business registration certificate or certificate of incorporation
• List of directors and shareholders 
• Business permit
• Distribution agreement
• Copy of Glass G work permit
• Weighing scale certificate
• Fire clearance certificate

2. How Profitable Is Cooking Gas Business In Kenya?

The profit margin for a 6kg cylinder is usually between Kshs 350 and Kshs 500. While that of a 13kg gas ranges between Kshs 900 and Kshs 1100. 

In a good month, you can earn Kshs 50,000 to Kshs 300,000 depending on the size of your business and type(retail or wholesale). 

Also Read:

How To Start a Hardware Business In Kenya

How To Start a Soap-Making Business In Kenya

Ready To Open a Cooking Gas Business?

The cooking gas business in Kenya is a lucrative venture that can help you create wealth. The best thing about this business is that it has an increasing demand as it’s the leading source of clean energy.

In addition, you only need a small initial capital to establish a retail cooking gas business which you can expand gradually depending on your business goals. You can accomplish your financial goals through a cooking gas business Cent Warrior!

Are you looking for more expert financial guidance? Visit our store for budgeting, debt clearance, and financial planning resources.