The usage of Liquefied Petroleum Gas (LP Gas or LPG) has increased significantly in Zimbabwe. Many Zimbabweans started to switch from electricity to LP Gas just after the dollarization of the economy in 2009, due to frequent power cuts which were happening. The electricity power problems later improved, but ZESA introduced prepaid meters, which made many families to be more sensitive towards their electricity consumption. Thus, Zimbabweans continued to switch from using electricity to LP Gas solutions which are cheaper.
In 2010, the annual usage of LP Gas in Zimbabwe was only 4.3 million KG, now the monthly usage stands at 3 million KG, with the annual usage at 36 million KG. That’s an increase of more than 700% in less than 10 years. There is more room for growth in the LPG Industry as capita use of LPG in Zimbabwe is 2Kg per person per year, while other countries have in excess of 10KG per person per year. The LP Gas industry is resilient and although Zimbabwe is going through an economic downturn, this industry enjoys good profits.
Before you start an LP Retail gas business in Zimbabwe, you have to decide on the size of your business, location of business, products to offer and your target market. You should always carry out a feasibility study, market research and write a business plan before you venture into any business. Do not make the mistake of starting an LP Gas business or any other business just because someone is doing it and he/she says it’s profitable. This article will explain how to start the LPG business in Zimbabwe, and the LP Gas Retail business plan.
What you need
Premises And Equipment
You need to construct the LP Gas structure/housing. The structure should be made of deformed bars, angle iron and square tubing. You also require non combustible roofing sheets. See the picture of the ideal structure below.
For equipment you require a digital scale for weighing the LP Gas, and large Gas Cylinders for storing the gas. If you are targeting individuals , then you should locate your LPG business where there are plenty of people eg at a shopping center in the high or low density surburbs. It is however important to ascertain that you’re choosing a market that has enough purchasing power.Assess the number of LP Gas retailers in your prospective area. Investigate the size of your target market and their income patterns. Use quality marketing and advertising strategies. People can always come and find you because of the quality service you provide.
Your major product will be LP Gas, which you can get from local LP Gas wholesalers. You can also sell gas equipment which include gas cookers, gas cylinders, gas stoves, gas equipment accessories. The other gas accessories which you can offer include valves, regulators, and cooker tops. The equipment is imported from South Africa.
To operate your LP Gas business legally in Zimbabwe, should obtain the necessary licences. The process of obtaining the licence involve going to the City Council, Fire Brigade, Environmental Management Agency (EMA) and finally Zimbabwe Energy Regulatory Authority (ZERA). The Zimbabwe Energy Regulatory Authority (ZERA) is a body corporate established in terms of the Energy Regulatory Authority Act [Chapter 13:23] of 2011. It is mandated to regulate the entire energy sector in Zimbabwe in a fair, transparent, efficient and cost effective manner for the benefit of the consumers and energy suppliers.
Management and employees
Depending on the size of your business, the number of your employees will vary. You will need employees who will handle the operations of the retail gas business, including serving your customers. They will responsible for coordinating with suppliers and sourcing all the products which will be sold by the business. They will also be responsible for inventory control, ensuring that the business has all the products in stock and in the right quantities, and determining when to place new orders. For a small LP gas outlet, this can be 1 or 2 people.
Market for LP Gas
The demand for LP Gas is huge in Zimbabwe, as Zimbabweans use about 3 million KG of LP Gas every month. LPG is used for cooking in many Zimbabwean households for economic reasons, for convenience or because it is the preferred fuel source. The rise in the use of LPG began with the challenges of constant power supply to many households and the high cost of eletricity. LP Gas (LPG) can be used in heaters, fireplaces and furnaces. You can also get corporate clients for your LP Gas business as it has many industrial applications. LPG is widely used for many industrial applications such as space and process heating (including metal high temperature treatment), oxy-propane cutting, welding, powering machinery, producing food, water heating, de-frosting, shrink-wrapping, powering industrial ovens, kilns or furnaces, or powering fork-lift trucks in and outside warehouses. It’s also used in the agriculture industry in greenhouses, providing heat and light to poultry and pigs, drying crops etc.
Pre-Written LP Gas Retail Business Plan : Comprehensive Version, Short Bank Loan Version, Automated Excel Financial Statements
For an in-depth analysis of the LP Gas Retail business in Zimbabwe, purchase our business plan. We decided to introduce the business plans after noting that many Zimbabweans were venturing into the LP Gas business without a full understanding of the industry, market, how to run the business, the risks involved, profitability of the business and the costs involved, leading to a high failure rate of their businesses.
Our business plan will make it easier for you to launch and run a retail LP Gas business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the LP Gas business plan will lay out all the costs involved in setting up and running the business. The business plan is designed uniquely for the Zimbabwean market.
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Uses of the Retail LP Gas Business Plan (PDF, Word And Excel)
The LP Gas business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your retail LP Gas business
- As a project proposal
- Assessing profitability of the LP Gas retail business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the LPG Retail Business Plan (PDF, Word And Excel)
The business plan includes, but not limited to:
- Market Analysis
- Industry Analysis
- Automated Financial Statements (income statements, cash flow statements, balance sheets, break even analysis, loan repayment calculations, start-up costs)
- Marketing Strategy
- Risk Analysis
- SWOT & PEST Analysis
- Operational Requirements including licence costs
- Operational Strategy
- Contact Details of some suppliers
- Why some Zimbabweans in the LP Gas business fail, so that you can avoid their mistakes
- Ways to raise capital to start your LPG business in Zimbabwe
The LPG Retail business plan package consist of 4 files
- LP Gas Business Plan – PDF file (Comprehensive – 67 pages)
- LP Gas Retail Business Plan – Editable Word File (Comprehensive – 67 pages)
- LP Gas Business Plan Bank Version – Editable Word File (Short version for applying for a loan – 36 pages)
- LP Gas Retail Business Plan Automated Financial Statements – (Editable Excel file)
Business plan last updated in July 2018.
The financial statements are automated. This implies that you can change eg amount of LP Gas bought per day, Price of LP Gas etc, and all the other financial statements will automatically adjust to reflect the change.
Get the LP Gas Retail Business Plan (PDF, Word And Excel)
We decided to make them affordable for anyone who would want a business plan, and the price for pre-written business plans is only $12.50 for soft copies, and $16 for hard copies.
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You can also purchase hard copies and/or soft copies at our offices in Harare. Visit StartupBiz Zimbabwe, Office 103, First Floor, Gowero House, Cnr Mbuya Nehanda and Nelson Mandela, Harare . Hard copies cost $16 and soft copies cost $12.50.
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LP Gas Retail Business Plan ($12.50)
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