Ghana Insider brings you a complete guide on how to start a cold room also known as cold store in Ghana. A lot of time and investment goes into cold room business.
This business, when done well, can make you huge profits within the shortest possible time. Below are some of the benefits of starting a cold store business in Ghana.
Benefits of Starting a cold store
- High profits/returns
- Less capital to start
- requires less knowledge or experience to start
- High demand for frozen foods
In this guide we are going to break everything down for you. We are going to cover the following
- Equipment needed
- Financial (Capital needed)
- Space or shop requirements
- Business registration
- And many more
What is a cold store/room business?
Cold room business involves the storage and preservation of perishable foods. Food are packaged and stored in refrigerators at specific temperatures until they are ready to be sold out.
It is one of the most lucrative businesses in Ghana. This is because most of the foods that we consume in Ghana are perishable. They therefore needs to be stored in cold rooms in deep freezers to keep them fresh and eatable always.
Refrigerator is not a common electrical appliance that can be found in every home in Ghana. Starting a cold room business is always a good option, especially in Ghana.
Common foods that can be frozen include seafood, slaughtered chicken, goat, cow, sheep, etc. We will cover more of these in the subsequent chapters.
How to start a cold room business in Ghana
Staring a cold store business shouldn’t be a difficult task if the necessary preparations are made. Follow the laid down steps below to see how.
Write a business plan and follow it
Before you start any business, you need to get a plan. A business plan is meant to articulate the vision and serve as a roadmap for success in the business.
A comprehensive business plan should have all that is required to start the business.
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Cold room business is not so broad like other businesses where you have a lot of options to choose from. However, you can still limit yourself to selling specific kind of frozen foods.
In choosing a niche, consider the profits that is likely to be made. Factors to also consider include location of the business and the culture. Some foods are not well patronized by specific group of people. When you’ve done all these background checks, you can proceed to choose a profitable niche. A typical cold room can sell the following products:
- Fish – salmon, tuna, cassava fish
- Guinea fowl
- Bush meat – grasscutter, antelope,
NB: You can also take advice from friends in the same business. They will help you choose the best niche.
Check your pocket (Finances)
In this chapter we give the details of the capital needed to start a cold room. The amount needed will largely depend on how big you plan to start. For example it will cost more to start a large scale cold store than to start a small scale one.
Investment in the business must be allocated to:
- Renting (space and structure)
- Buying equipment
- Staff wages
- Purchasing the foodstuffs
How much is needed to start a cold room business in Ghana
From a survey we conducted you need an amount between GHC 8,000 – GHC 40,000 to start a cold store business. The amount stated above may vary depending on several factors such as location, size of store, transport fares, etc.
Also note that a lesser amount can also start such business depending on what exactly you want to sell.
Choose a location
Location matters in every business. When choosing a location for a cold room, the following factors should be considered.
- The place should be busy
- There should be constant source of electricity
- Water should be easily available
- It should be in close proximity to places such as the market, airport, bank, hotels, restaurants, residential areas, etc.
Hiring or Setting up a structure
Once you are convinced of the chosen location the next step is to put up the shop. In most instances, it is best to rent a shop. You are likely to face lots of difficulties when you build from scratch. Getting a land/space is difficult in recent times. It is therefore advisable you rent a shop to commence the business. The costs involved in renting have been elaborated in previous chapters.
Procure the needed equipment
After you’re done with the structure, procure all the equipment needed for the smooth running of the business. The scale of your business will depend on the kind of equipment needed. This is a small scale cold store business and the following equipment will be needed.
- Butcher knives
- Cutting board
- Packaging bags (polythene)
- Ceiling Fan
- Extension board
- ECG meter
To avoid expensive prices, you can procure the equipment in bulk.
Procure food items for storage and start selling
Once the store is fully setup, it is time to buy the products for storage. Buy from wholesale cold stores. The food stuffs to be bought have been listed in previous chapters (Choosing a niche).
Marketing and promotion
Now it is your responsibility to let the whole world know that you are selling something. Use traditional and modern ways of advertisement to reach your target audience. You can utilize the following strategies to promote your business
- use social media
- design a signage (sign board)
- use posters and banners
- send bulk SMS
- word of mouth
Register your business
You have to be a law abiding citizen. It is required of every business owner to get their businesses registered with the Registrar’s General Department. The complete process of business registration can be found HERE. (PC BOSS). At some point and depending on the scale, you may be required to register the business with the Food and Drugs Authority of Ghana. For example those that import food products into the country are required to register with the FDA.
Once the business start to gain traction you can recruit someone to assist you in daily operation of the business. However, if you believe you can run the business all alone, there wouldn’t be any need to hire someone.
Everything that goes on in your business must be documented. The importance of documentation in business cannot be overlooked. You should have the following record keeping books at your cold store.
- Daily sales book
- Stock book
- Expenses records
- Record of staff
- Record of salaries
- Records of miscellaneous expenditure
- Suppliers record