Starting A Milk ATM Business In Kenya 2024- Make 30k – 50K Monthly
In this article, I will be showing you how you can make between 30 – 50k by starting an Milk ATM business in Kenya. In todays economy in Kenya, finding jobs has been hard enough as it is. Most people opt to start business to try and sustain themselves as side hustles. This being a good idea, it is still sad to see some of these businesses failing and business people closing shops due to increased tax rates.
Article Summary
To start a successful milk ATM business, you need the following; A business permit, a Milk Vending machine a good location to set up shop, Starting capital, my milk ATM start up guide.
Introduction: What Makes A Milk ATM Business Special
In this article, i will give you a new business idea, which is about selling Milk using Milk ATM machines, where you can find the best business locations, what you need to start an ATM business, and where you can find a Milk ATM machine for a good price. Make sure you read till the end to see all the important tip that will make this business surely succeed.
Look at the Trends: Is a milk ATM business worth it?
I bet you can agree with me that milk is an essential part of breakfast in every Kenyan family. When i do my budget at the end of the month, I never negotiate on buying milk. I can always choose not to buy Peanut butter, but milk is always an essential. My point is, you will never miss customers to buy milk if you set up a milk ATM business in Kenya.
According to The Conversation website, milk consumption in Kenya is about 8 billion liters per year. The website also stated that the consumption of milk is projected to grow by 150% by 2050[1]. You can see that there is great potential in this market.
Doing Your Market Research
Market research is key if you want your milk ATM business to be successful. Getting to know who you want to target, and where you will setup your business. In terms of ATM business market research, you can divide it into competitor analysis and demographic research.
Competitor Analysis
Know your competitors, their strengths and weaknesses, and how you can do better than them. One tip I have learnt from business, competition is health.
Identify target demography
Look for a suitable location for your Milk ATM business. You don’t want to go and setup your business in a place that doesn’t have a lot of people. According to me, setting up you Milk ATM dairy shop at a residential estate is your best bet.
Licensing and adherence to regulations for Setting up a Milk ATM Business in Kenya
Make sure you get a license for your business. You will need to go to your your county licensing offices to enquire about the price for your license. This price for get a license for a milk ATM business may vary from town to town, and therefore i wont be able to give you the specific figure for this.
Other types of license you will need include the health certificate, which is to be filled by a licensed Medical Officer. Food stuff vending requires this license to ensure your health is good enough to handle food while selling milk.
Selecting a Location for your Milk ATM Business
I can’t emphasize enough on the need of selecting a good location for your business. This takes time so don’t rush. Let me give you an example, I have been doing business for a while and i have had my falls too. One important example is when i started an Salad ATM business in the beginning of this year.
I got a shop next to a wholesaler in Nakuru, i wont mention the name of the place. I thought that because there is a wholesaler next to me, I would be able to get some of the customers because the wholesaler had made the place popular with good traffic flow.
With out consulting with nearby residents, I paid for the premise and started my business. I was also selling cereals along side the Salad ATM. It hit me in the first week that the wholesaler was selling things very cheaply. For example, he would sell a 20litres of oil at a price of 4530, but the problem is, even if you needed a quarter liter of oil, he would sell it to your at the rate of 4530. So when i sold a liter of oil for 250, he was selling it at 235. Now, remember, I don’t have the luxury of buying things in bulk, and so I was unable to compete with him.
Long story short, do market research. Ask the Mama Mboga about the location you want, and the type of business you want to start. Trust me, they will tell you if the place will work for your business or not. Enquire about security in the area, you don’t want to be in a place where you are likely to be mugged, or worse, your customers.
Found a Location? Great, lets setup our Milk ATM Business
Choosing the right Milk ATM Vending Machine
A milk ATM machine is the our main asset in our Milk vending machine business. You will need to find the right ATM machine for your business with the best price in Kenya. With this business model trending over the years, getting an ATM machine for Milk vending is easier. I will advice you to do your research and find one that is built locally, or sold on online store like Jumia.
Milk ATM Price in Kenya
I can recommend you to the one who built my Salad ATM here in Nakuru. Although, I will tell you that he is expensive(but his machines are durable). When buying my Cooking Oil ATM, I enquired about the Milk ATM and he said it would cost between 120k – 160k to build one. Its expensive I know, but keep this in mind, I have a friend who bought a salad ATM(online) at the same time as me, mine is running strong, while his became faulty after 4 months.
Click here to see some of the Milk ATM machines and their prices in Kenya. This link will take you to Jumia, where the price of a Milk ATM machine ranges between Ksh. 30,000 to Ksh. 35,000. If you need me to link you to my ATM Machine seller, click here to talk to me.
Installation and Maintenance considerations
Other essential components you will need to budget for include;
- A backup generator incase power fails. This is optional, but can save you a lot incase there is a blackout in your area(Which is common in Kenya nowadays).
- An power extension. Some shops might now have power sockets at the right place if. An extension gives you more control.
- Bulbs for light. Make sure you remember to also add one outside your shop to increase visibility.
- A fridge guard. I cant emphasize enough about this. Please buy a fridge guard. It will help when there is a power surge, and keep your ATM machine safe. You have seen how expensive a Milk ATM machine is in Kenya.
- Power supply. Make sure the electricity is good. Always ensure you have enough electricity token, or you have paid the KPLC bill at the end of the month. Before you pay for the house, make sure the account with KPLC is debt free.
Ensuring Your Milk is fresh and of good quality
Milk business is very delicate. A slight case of being unhygienic will lead to your milk going bad, which will lead to excessive losses and loss of customers. Don’t be that milk ATM shop where people say you milk has a bad smell or makes them sick.
To ensure milk freshness and good quality for your milk ATM business;
- Ensure you have a health certificate. When getting a health certificate, you will be tested to see if your are sick of any communicable diseases, that might be risky for the community. Remember you are dealing with food, your health matters a lot here.
- Keep all your equipment clean. The containers, the milk ATM machine and even your shop. Dirty places attract germs, which attract diseases, which chases customers away.
- Get a white dust coat. Wearing a white dust coat makes you look professional and i bet you agree with me.
- Get a good milk supplier.
Sourcing for Fresh Milk for Milk ATM Business
local dairy farmers
Local dairy farmers can be a good and consistent source of milk for your Milk vending business. Get to know about 2-3 farmers and book milk from them. Let one supply milk for you in the morning at around 9a.m, another at 4p.m. Start with small quantities and expand as demand grows. Ask around and see who has the best price, and good quality of milk.
Companies that supply Milk in Kenya
You can also get milk from companies like Brookside or KCC. They get to supply milk to you at a wholesale price. What I like about them is their quality of milk. Click here to see a list of popular milk suppliers in Kenya for your Dairy business
Marketing and Branding Our Milk ATM Business
Marketing and branding is key for success of any business in todays world. I always say, a good brand attracts customers, loyal customers. Think of Apple, it has die-hard followers who will buy their products no matter the price. Be like Apple!
Developing a unique brand identity
You can develop your brand identity through social media platforms like YouTube, Facebook and Twitter(now called X). Create a Facebook page, run targeted adds for your location and get the necessary flow of customer. You can even create a website where customers can order online and get their milk delivered to their doorstep. Make sure you have a business card for your business.
If you are packing your milk for your customers, lets say in bottles, brand those bottles with your business name.
Promotions and loyalty programs
Do promotion programs. You don’t have to do big ones. Let me give you an example. When i moved from the toxic business environment, and setup my shop in another location, i had a promo, where i would give every child who came for Salad or cereals a sweet. You see, very simple promo, but imagine the number of kids who promoted my shop to their parents and neighbors.
You can also do a promo where you reward a customer with a free branded carrier bag if they buy a liter of milk, a bread and 1kg of sugar.
Customer Experience and Service
No matter how many thousands of Kenya shillings you pump into your Milk ATM business, if you don’t have a good customer experience, you wont succeed. We try our best to bring out the best products hoping we will find the best answer to sell enough, when the answer is always with the customers.
Remember, you are not just selling anything, you are offering what the customer is looking for. Listen to your customers’ complaints, and improve on it. If they say the milk smells bad, get a better supplier. If they tell you others are selling milk at a better price, see what you can do about it.
Remember: The Customer is Always Right
Provide a business card or an email where they can tell you your the problems they need changed and feedback on how you can improve your services.
Financial Planning and Pricing For A Milk ATM Business in Kenya
Initial investment and startup costs
For you to startup your Milk ATM business in Kenya, i would recommend you have atleast 250k to start. This will include money for buying the following;
- Buying the ATM Machine. (Estimated 160K depending on where you buy it)
- 3 months shop rent plus deposit(15k + 15k + 30k)
- Business permit (Estimated 15k)
- Health certificate(Estimated 1k)
- Milk(10k)
- Shop shelves, counter, and other thing that will be built inclusive of chairs and drawers(Estimated 15k)
- Stock, including sugar, bread, Blue Band, packaging materials etc.(Est. 30k).
- miscellaneous(40k)
Where To Get Capital
Getting capital is one of the challenges we face as Kenyans. Nowadays its harder to even get loans. Some of the best places to get loans for the Milk ATM business include;
- Family members. Friend and relatives can be very helpful if you have the right kind. Talk to that rich friend or uncle you have, don’t just assume that they are stingy and they cant help you. One secret I need to tell you, the rich will never waste their time and money on something that will fail. Get a good business plan and present it to them and show them how committed you are. They might just surprise you. You can always form a Harambe too
- Sacco’s can also offer you loans if you have been saving with them. Most Sacco’s can offer up to 3 times your savings if you have been saving with them for more than 6 months. If you can open one up, save something for some months as you do market research on where to start the business. Here is a list of Top saccos for you
- You can also enquire if your local bank can give you a loan. Most banks will look at your 6 months statement to see if you qualify for a loan.
Avoid Shylocks. Look for a loan you can afford to pay
Pricing strategies for competitive advantage
In terms of pricing, do research from other milk vendors, and see how much they sell their milk. Your price will also depend on the price at which you got your milk at. Its better to be at the same level with your competitors, don’t go soo low, you will ruin the market, Don’t go high, you will chase the customer away.
Projected revenue and profitability
My Final Words For You
One of the leading failures in starting a business is making an initial step to actually start the business. Don’t make your idea remain an idea. Make the initial step and create a source of income for yourself. Subscribe to my newsletter, I am in the process of making a more detailed eBook on how to start a Milk ATM business in Kenya, which will be more detailed. Make sure you don’t miss it