Butchery is profitable but you need to have these facts
This video is a case study of a successful butchery. Here are details on the butchery business to help you make a decision whether it will be profitable for you or not [SCROLL DOWN TO READ ARTICLE]
Kenyans love meat and thus a butchery can be a lucrative business. Butchery business is often see to be done by people who did not make it in school, yet we have established that it is very profitable.
Only entrepreneurs with keen eye try this business but because most Kenyans love clean businesses they often miss out on opportunities which could earn them good money. Butchery business is extremely easy to operate.
- Low Income Areas – Ksh100,000
- Middle Income Areas – Ksh200,000 – Ksh500,000
- High Income Areas – Ksh500,000 – Ksh1,000,000
Start a butchery business
Meat Supply: Butcheries within and around Nairobi area get their meat supply from Dagoretti, Njiru, Kajiado and other smaller slaughterhouses. Others in Nairobi get their meat supply from City Market. Those outside Nairobi depend on slaughterhouses near where they operate from.
A kilo of beef in these slaughterhouses ranges between Ksh250 and Ksh320. The price will depend on the location of slaughterhouse, type of meat and season. Goat meat will be supplied at about Ksh320.
On average, bigger butcheries which sell ready to eat meat such as boiled, roast or fried beef or goat meat with ugali, rice, matoke etc sell more meat than those who only sell raw meat. Such butcheries move as much as 300kgs of meat per day. Smaller ones which only sell raw meat take about 50–100Kgs.
You should determine your selling price depending on where you are located by visiting other butcheries around the area where you are interested in setting up and comparing prices. This will ensure that you set your prices within the market rate. In many areas of Nairobi, a kilo of beef sells for between Ksh400 and Ksh460 depending on type and location while goat may sell for up to Ksh500 per kilo.
If you decide to boil, choma or fry the meat, you have a chance of making more profit for every kilo of meat. You will sell ¼, ½ or any other portion with either ugali, rice, roast potatoes, matoke or any other accompaniments.
An interesting point to note as you budget for your first supply of meat from the slaughterhouse is that you should be ready for some waste from the meat which will reduce your net kilos that you can put up for sale. As you wash the meat to remove the waste, you may end up with several kilos of waste daily.
As wetness and blood in the meat reduce, you will lose more weight during the day. As you cut to sell, the breaking of bones and falling pieces further reduce your net kilos that will be available for sale. Therefore, work with higher kilos because of these losses as the day goes by.
A supply of about 300kgs in a day may lose between 5–10Kg of waste from washing, breaking bones when cutting, loss of water and blood and falling pieces in a day. It is therefore important to handle the meat very carefully to control this wastage and minimize it as much as possible.
To look at the possible profit margins that you should expect, let us assume that your butchery is medium and you get a supply of about 200Kg from the slaughterhouse every day at an average price of Ksh300. Let us also assume that business is low and you are only able to sell 150Kgs out of the 200kg of the supply at a lower price of Ksh400 per kg.
Your net profit per kilo of meat sold will be Ksh400 – Ksh300 = Ksh100. By selling only 150Kg of meat, your total profit will now be Ksh100 X 150 = Ksh15,000.
If you sell the meat after cooking and with accompaniments, you are likely to sell many more kilos. That is a good profit in a day, even before factoring in other expenses such as charcoal, oil, water and labour.
Always remember that you will need staff in your butchery to help you with cutting, cooking if you sell cooked meat and a cleaner to take care of the cleanliness inside and around the business. In a butchery business, cleanliness plays a very important role in your success.
On average, a number of butcheries around Nairobi area prefer to pay their workers daily. Daily wages for a cook is about Ksh700, cleaner Ksh500 and those who cut meat take home about Ksh350. You can budget for higher salaries depending on experience and location of your butchery.
Tips for Success
For you to succeed in your butchery business, start by keeping it clean, neat and organised. Provide all your workers with clean uniform, as clean as a doctor’s dust coat. Their uniforms don’t have to be dirty and stained because they work in a butchery.
Always develop a good network and talk to people and other businesses such as hotels and restaurants around your butchery and ask if you can supply them with raw meat. You can also extend this network to those far away and open air markets and supply cooked meals to those in these markets. Such special orders can contribute a good portion of your daily profits if well managed.
Finally, to retain and keep your customers coming back, always get good quality meat, even if it means paying a little more for the supplies. Don’t just sell hard meat, especially to those buying raw to cook for themselves. Mix with some soft ones too. Competition is very stiff and if you give your customers a reason to go elsewhere, they will happily troop to your competitors without notice.
Kirubi’s formula for business success
It is important that you are ready to embrace the changes that come with time
When starting a business, entrepreneurs does hope have a goal of growing that business and to be successful. Billionaire entrepreneur Chris Kirubi offers insights on how to make your business thrive:
1. Understand your environment
For success in whatever venture, you have to be aware of the environment you will be operating in.
“Understanding the environment in which your business operates will ensure that you provide the right goods and services for that market,” he says.
“Furthermore, knowing your customer’s needs, investors’ expectations and what your competitors are doing will also give you further insight on how to operate your business. Together with your employees, they play a critical role in determining whether your business will succeed or fail.”
2. Be dynamic
It is important that you are ready to embrace the changes that come with time. You have to be braced for changing trends and new ideas in the market.
“Many a times we forget that the world keeps changing and the needs of the people keep developing. This means that a business must continuously innovate and redevelop itself for its survival and to keep up with the ever changing market trends.”
Investing in research and development will aid this as well ensure you are delivering the right products and services in the market.
Additionally, this will of course give you an edge over your competitors and holistically improve the general business climate since businesses are working towards improvement and innovation.
4. Think Globally
It is important to scale higher and expand your market share once you know your business can handle it. We are a global market with various investors wanting to partner and invest in Kenya. Think globally and make sure you invest in the right talent to help you take and maintain your business beyond borders.
5. Be a role model
As the leader of your business, transformation begins with you. Your employees will emulate what they see and what you teach them.
You drive the vision and success of the business. This means that you have to do things right.
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