Are you about starting a cold room in Nigeria? If YES, here’s a complete sample cold room business plan template & feasibility report you can use for FREE to get started.
Okay, so we have considered all the requirements for starting a cold room. We have analyzed and drafted a sample cold room marketing plan backed up by actionable guerrilla marketing ideas for cold room companies. So let’s proceed to the business planning section.
Why Start a Cold Room?
One of the many businesses that people in Nigeria have turned to in recent years is the cold room business. One may then begin to wonder what makes the cold room business tick and why it has suddenly become the rave of the moment.
The cold room business is very profitable when you put the right things first. It involves the conservation of livestock foods like; chicken, fish, turkey, shrimps, and what have you for a later consumption.
You should look towards drawing up a good and workable business plan when starting this business. Business plans are like maps that help businesses chart a good and profitable course for their business. Below is a sample cold room business plan that will guide you towards crafting yours with little or no stress.
A Sample Cold Room Business Plan Template in Nigeria
1. Industry Overview
Cold room business is a subset of the Refrigerated Storage industry and players in this industry includes establishments that operate refrigerated warehousing and storage facilities. Temperature-controlled services include blast freezing and tempering. Cold room business is all about food preservation that is, selling of frozen food items like poultry products and fish.
Generally, wholesalers, retailers, importers and exporters outsource their storage operations to specialized third-party refrigerated storage operators, either on an as-needed basis or by contract. These storage services can differ substantially in terms of the duration and temperature required, ranging from the short-term storage of fresh produce in tepid conditions to the sub-zero storage of ice cream and other frozen products for extended periods of time.
A cold room business is one of the businesses that you cannot go wrong with as long as you rightly position the business. Cold room business is indeed a flourishing business in Nigeria, it is a money spinning business, and a good number of Nigerians have become financially stable because of cold room business.
When the Federal Government banned the importation of frozen poultry into the country, it gave people with business foresight opportunity to look inward and they are still making it large. Cold room business entails much more than selling frozen livestock products and frozen fish. People involved in the business sell other food items that could be preserved in refrigerators like prawns, ice cream, ice block, yoghurt, among others.
There are different sizes of cold room businesses in Nigeria, some carter to a small market and others to large markets via wholesaling. You should make up your mind whether you want to run a large scale cold room or a small scale one.
If you are going for small scale cold room business, then you should know that you will only be selling to people in your neighbourhood, but if you are going for large or commercial scale, then you are going into a very big cold room business, which will have to do with packaging and importation of preserved food items as well as local food items. That is a big investment.
Starting this type of business requires that you secure a warehouse, or cold room, be sure there is constant power supply, and be sure you have to locate closer to where you will be buying your products. In Nigeria, if you want to go into any food related business, you have to register with NAFDAC.
2. Executive Summary
Mama Janet® Cold Room & Frozen Foods, Inc. is a standard cold room business that will be based in Ikeja – Lagos State, Nigeria. We are registered under the Nigerian Corporate Affairs Commission (CAC). Although we intend starting out from a warehouse in Ikeja servicing customers in an around Ikeja, but that will not in any way stop us from maximizing our potential in the cold room business. We hope to grow the business beyond Ikeja – Lagos State to other cities in Nigeria.
As a business, we are willing to go the extra mile to build a standard cold room that won’t go against the law of Nigeria and also to hire efficient and dedicated employees. We have been able to secure permits from all relevant departments at local government, state and national levels.
Mama Janet® Cold Room & Frozen Food is set to redefine how the standard cold room business should be run, not just in Ikeja – Lagos State, but also in the whole of the Nigeria. The demand for frozen foods is not going to plummet any time soon which is why we have put plans in place to continue to explore all available markets around the communities where we intend retailing our frozen food.
Our strongest selling point at Mama Janet® Cold Room & Frozen Foods is our unique distribution channels.
Mama Janet® Cold Room & Frozen Foods, Inc. will at all-time demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely.
Our plan is to position Mama Janet® Cold Room to become the leading brand in the cold room and frozen foods line of business. This might look too tall a dream but we are optimistic that this will surely come to pass because we have done our research and feasibility studies and we are confident that Ikeja – Lagos State which has loads of restaurants and eateries is the right place to launch this type of business.
Mama Janet® Cold Room & Frozen Foods, Inc. is a family business that will be owned and managed by Mrs. Jessica Uchenna and her immediate family members. Mrs. Uchenna is an astute business woman who has been able to start and grow several businesses before starting Mama Janet® Cold Room.
3. Our Products and Services
We are very much aware of the importance of having very good products and services. This is one of the reasons why we have made great plans to have the best of products and services. Our intention of starting Mama Janet® Cold Room is to make profits from the cold room line of business and we will do all that is permitted by the law in Nigeria to achieve our business aim and ambition. Here is a list of our products
- Frozen chicken
- Frozen turkey
- Frozen fish
- Frozen beef
- Other frozen foods
4. Our Mission and Vision Statement
- Our vision as a cold room business is to become the leading company in this line of business in Nigeria.
- Our mission is to build a highly profitable and thriving cold room business whose distribution channels spreads all across major cities in Nigeria.
Our Business Structure
Ordinarily, we would have succeeded in running a cold room business with few employees, but as part of our plan to build a top flight national cold room business in Ikeja – Lagos State, we have perfected plans to get it right from the onset which is why we are going the extra mile to employ competent employees to occupy all the available positions in our company.
In view of that, we have decided to hire qualified and competent hands to occupy the following positions at Mama Janet® Cold Room & Frozen Foods;
- Chief Executive Officer (Owner)
- Cold Room Manager
- Human Resources and Admin Manager
- Merchandize Manager
- Sales and Marketing Manager
- Information Technologist
- Accountants/Cashiers
- Customer Services Executive
5. Job Roles and Responsibilities
Chief Executive Officer – Owner:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Defines job positions for recruitment and managing interviewing process
- Carries out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversees the smooth running of the daily office activities.
Cold Room Manager:
- Organizes the safe and efficient receipt, storage and distribution of frozen foods
- In control of using space and mechanical handling equipment efficiently and making sure quality, budgetary targets and environmental objectives are met
- Responsible for keeping stock control systems up to date and making sure inventories are accurate;
- Ensures that proper records of goods are kept and warehouse does not run out of products
- Ensure that the cold room facility is in tip top shape and goods are properly arranged and easy to locate
Merchandise Manager
- Responsible for the purchase of frozen foods for the organizations
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
Sales and Marketing Manager
- Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
- Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
- Develops, executes and evaluates new plans for expanding sales
- Documents all customer contact and information
- Represents the company in strategic meetings
- Helps to increase sales and growth for the company
Information Technologist
- Manages the organization website
- Handles ecommerce aspect of the business
- Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
- Manages the organization’s CCTV
- Handles any other technological and IT related duties.
Accountant/Cashier:
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensures compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Client Service Executive
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
- Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries.
6. SWOT Analysis
Due to our drive for excellence, we were able to engage some of the finest business consultants in Lagos State – Nigeria to look through our business concept and together we were able to examine the prospect of the business and to access ourselves to be sure we have what it takes to run a standard cold room business that can compete favorably in the industry.
Here is a of what we got from the SWOT Analysis conducted for Mama Janet® Cold Room & Frozen Foods;
- Strength:
Our strength lies in the fact that we have a robust distribution network that is spread all across Nigeria. We have good business relationship with major frozen foods companies in Nigeria that has positioned us to meet the demand of frozen foods in Nigeria even if the demand tripled over night. Another factor that counts to our advantage is the background of our Chief Executive Office; she has a robust experience in the industry and also a pretty good academic qualification to match the experience.
- Weakness:
We do not take for granted the fact that we have weaknesses. The fact that we are setting up a cold room business in a city with other similar businesses might likely pose a challenge for us in breaking into the already saturated market. In essence our chosen location might be our weakness.
- Opportunities:
The opportunities available to us are unlimited. Loads of people consume frozen foods on a daily basis and all what we are going to do to push our push our frozen foods to them is already perfected. Ikeja and other similar towns in Nigeria is just ideal for a cold room business because there are loads of restaurants and eateries in these locations hence there is a large market for our business.
- Threat:
The threat that is likely going to confront us is the fact that we are competing with already established cold room and frozen foods businesses in Ikeja – Lagos State and also there are other entrepreneurs who are likely going to launch similar businesses within our location. Another threat that we are likely going to face is unfavorable government policies and economic downturn.
7. MARKET ANALYSIS
- Market Trends
If you are conversant with how cold room businesses operate in Nigeria, you will notice that big players usually operate their own poultry farms. Operating their poultry farms usually give them economy of scales hence the ability to maximize profits.
8. Our Target Market
When it comes to retailing or distributing frozen foods, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who resides in our business location.
In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us. We are in business to retail a wide range of frozen foods to the following groups of people;
- Households
- Restaurants
- Hotels
- Caterers
- BBQ Grillers
- Frozen foods retailers
The fact that anybody with a business cum retailing skills and the required startup capital can decide to start cold room and frozen foods business means that the business is open to all and sundry hence it is expected that there will be high – level competition in the industry.
As a standard cold room, we know that gaining a competitive edge requires a detailed analysis of the demographics of the surrounding area and the nature of existing competitors. And even if you are successful at first, new competitors could enter your market at any time to steal your regular customers. Hence we will not hesitate to adopt successful and workable strategies from our competitors.
We are going to be one of the very few cold room and frozen foods companies in Ikeja – Lagos State that will also engage in wholesale distribution of frozen foods.
Another competitive advantage that we have is the vast experience of our management team, we have people on board who understand how to grow a business from the scratch. Our large and robust distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Mama Janet® Cold Room is established with the aim of maximizing profits in the cold room business both in Lagos State and we are going to ensure that we do all it takes to sell our frozen food both in retail and wholesale to a wide range of customers.
Mama Janet® Cold Room will generate income by selling /distributing;
- Frozen chicken
- Frozen turkey
- Frozen fish
- Frozen meat / beef
- Other frozen foods
10. Sales Forecast
One thing is certain when it comes to cold room and frozen foods business, if your cold room is centrally positioned and easily accessible in a place where there are restaurants and eateries and households, you will always attract customers cum sales and that will sure translate to increase in revenue.
We are well positioned to take on the available market in Ikeja – Lagos State and we are quite optimistic that we will meet our set target of generating enough profits from the first six months of operation and grow the business and our clientele base.
We have been able to examine the cold room business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Mama Janet® Cold Room & Frozen Foods, Inc. It is based on the location of our business and other factors as it relates to startups in Nigeria;
- First Fiscal Year: N240, 000
- Second Fiscal Year: N550, 000
- Third Fiscal Year: N1 Million
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location to launch Mama Janet® Cold Room we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market in Ikeja – Lagos State. We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract.
We hired experts who have good understanding of the cold room business to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Lagos State. In summary, Mama Janet® Cold Room & Frozen Foods, Inc. will adopt the following sales and marketing approach to sell our frozen foods;
- Introduce our cold room and frozen foods business by sending introductory letters to restaurants, hotels, eateries, households and other stakeholders in Lagos State
- Open our cold room and frozen foods business with a party so as to capture the attention of residents
- Advertise our products in community based newspapers, local TV and radio stations
- List our business and products on yellow pages’ ads (local directories)
- Leverage on the internet to promote our cold room and frozen foods business
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
11. Publicity and Advertising Strategy
Regardless of the fact that our cold room is a standard one that can favorably compete with other leading cold rooms in Nigeria, we will still go ahead to intensify publicity for all our brand.
Mama Janet® Cold Room has a long term plan of opening outlets in various locations all around Lagos State and other key cities in Nigeria which is why we will deliberately build our brand to be well accepted in Ikeja – Lagos State before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Mama Janet® Cold Room & Frozen Foods, Inc.;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, twitter, et al to promote our brand
- Install our billboards in strategic locations all around major communities in Lagos State
- Distribute our fliers and handbills in target areas in Lagos State
- Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our cold room cum frozen foods
- Ensure that all our staff members wear our customized clothes, and all our official cars and distribution trucks are customized
12. Our Pricing Strategy
Our prices will conform to what is obtainable in the industry but will ensure that within the first 3 to 6 months our frozen foods are sold a little bit below the average prices when compared to other cold room businesses in Lagos State. We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our brand.
- Payment Options
The payment policy adopted by Mama Janet® Cold Room is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the Federal Republic of Nigeria.
Here are the payment options that Mama Janet will make available to her clients;
- Payment with cash
- Payment via online bank transfer
- Payment via Point of Sale Machine (POS machines)
- Payment via check
In view of the above, we have chosen banking platforms that will enable our clients make payment for the purchase of frozen foods without any stress on their part.
13. Startup Expenditure (Budget)
We know that no matter where we intend starting our cold room and frozen foods business, we would be required to fulfill most of the items listed below;
- The Fee for registering the business (venture) in Lagos State – Nigeria – N15,000
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – N30,000
- Marketing promotion expenses for the grand opening of Mama Janet® Cold Room & Frozen Foods, Inc. – N75,000
- The cost for hiring Business Consultant – N50,000
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – N20,000
- The cost for payment of rent for 12 month and renovation inclusive – N500,000
- The cost for construction of standard commercial cold room – N250,000
- Other start-up expenses including stationery and phone and utility deposits – N5,000
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – N200,000
- The cost for start-up inventory (supply of a wide range of frozen foods et al) – N500,000
- The cost for store equipment (cash register, security, ventilation, signage) – N10,000
- The cost of purchase of distribution trucks – N1,200,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – N15,000
- The cost of launching a website – N25,000
- The cost for our opening party – N10,000
- Miscellaneous – N10,000
We would need an estimate of two million seven hundred thousand naira (N2.7 million) to successfully set up a standard cold room and frozen foods company.
Generating Startup Capital for Mama Janet® Cold Room & Frozen Foods, Inc.
No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality. Finance is a very important factor when it comes to starting a business. Rising startup capital for a business might not come cheap, but it is a task that an entrepreneur must go through.
Mama Janet® Cold Room & Frozen Foods, Inc. is a family business that is owned and financed by Mrs. Jessica Uchenna and her immediate family members. They do not intend to welcome any external business partner which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.
These are the areas we intend generating our startup capital;
- Generate part of the startup capital from personal savings and sell of stocks
- Source for soft loans from family members and friends
- Apply for loan from the bank
N.B: We have been able to generate about N700,000 (Personal savings N200, 000 and soft loan from family members N500, 000) and we are at the final stages of obtaining a loan facility of N2 million from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Mama Janet® Cold Room is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to retail our frozen foods a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Mama Janet® Cold Room will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of a warehouse facility and renovating the facility as well: In Progress
- Construction of standard commercial cold room: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with vendors – poultries and fish farmers: In Progress
- Purchase of delivery trucks: Completed