Butchery Business Guide: How to Start a Profitable Butchery Business in Kenya

There is so much potential in meat products in Kenya, but many startups in the sector fail to make to their second year of operation because they get it all wrong. In this article, I’ll take you through the do’s and dont’s of running a butchery. This guide begins with the statistics that show the viability of the business.

On average, households in Nairobi spend 29% of their total expenditure on food. The proportion of money spent on food is higher among the low income groups than the higher income groups. Another important fact is that Kenyans consume an average of 16kg of red meat per individual annually. Middle income earners are increasing, and the consumption of meet keeps rising day after day.

Overall, households in Nairobi spend 15% of their basic food budget on vegetables, 8%on fruit, and 3% on Irish and sweet potato. In comparison, they spend 18% on dairy Products, 14% on beef, 12% on wheat products, and 11% on maize products.

What You Need to Start a Butchery in Kenya

Licenses

  • Single User Business Permit – Ranges between Kshs.7000 and Kshs.15, 000 depending on county, size of premises and the location within the county.
  • Public Health License – This is issued by public officers in the area to make sure the premises are okay for handling food. Among the check list is availability of water, condition of floors, walls and the environment. In most areas the public health officials are not strict. Different counties could have some ‘lesser’ licenses associated with the health license. For instance if the butchery is also cooking the meat and operating as a hotel.
  • Medical Certificate – Those handling meat are required to have a medical certificate to ensure they don’t have any communicable diseases which can be spread to customers. The health certificate averages Kshs.500 and can be acquired at the local government hospital/ clinic after some tests.

Equipment

Below we list average prices of some equipment that are used in butcheries. Not all equipment is necessary and what is required depends on the class of butchery you wish to set up.

Basic Requirements

These are enough to start a traditional butchery:

  • Knives , Axes, Chopping boards/log, Hooks, Aprons – Kshs. 5000
  • Weighing Scale: Digital – Preferred by customers, lets you sell at many price points, Enhances sales – Kshs.15,000
  • Manual Weighing Scale – Kshs.6000
  • Jua Kali Display – Kshs. 2000 to Kshs.4000
  • Newspapers and Wrapping Papers
  • Bowls & Basins – Kshs. 2000

Advanced (Optional) Equipment

The equipment below are used in more advanced and modern butcheries.

  • Bone Cutting Machine – A standard bone cutter costs an average of Kshs.100, 000. But prices could be as high as Kshs.240, 000 depending on the model and features.
  • Mint Mincer – Standard meat mincers average Kshs. Kshs.15, 000. However prices range from Kshs.10, 000, 000 to Kshs.30, 000 depending on model and features.
  • Stainless Steel Saw Blade – Kshs.1200
  • Refrigerated Display Counter Depends on size and source – Kshs. 70,000 to Kshs. 200,000 depending on the size, manufacturer and features.
  • Spring Weighing Scale – Kshs.3, 000
  • Deep Freezer – Kshs.35, 000 to Kshs.50, 000
  • Cash Register – Kshs.50, 000

Stock

A new butchery takes time to acquire regular clients so it’s prudent to start with a reasonable quantity and increase gradually. Depending on the location, your storage facilities and ease of sourcing 12kg to 20kg could be a fair quantity. The quantity could more if the butchery is bigger and in an area with higher income and foot traffic. Be careful not to overstock at the start. You don’t want to start selling stale meat as a newbie.

Process of establishing a butchery

  • Identify location
  • Identify premises
  • Identify target market
  • Identify supplier
  • Acquire licenses
  • Purchase equipment and set up (Counter, painting, branding)
  • Start operations

Location

Butcheries located in areas enjoying economies of location have an advantage in attracting lots of walk in customers, who will stick if the quality and service is good. Butcheries in such areas have lower customer acquisition costs and eventually break even faster.

In estates a convenient location draws in more customers. Convenience could be in terms of being near homes, a bus stage or along the path home. Revenue is high in butcheries located conveniently.

Location is also about the social demographics of an area. Butcheries located in areas with a pool enough of the middle class record the highest average revenues. This is the same case in relatively low income area with high populations. Though customers in such areas by meat in small quantities, they do so severally and the high population ensures there are always enough numbers purchasing meat.

Consumers in relatively low and mid income areas purchase meat regularly and in smaller quantities than those in high income areas. Consumers in high income areas often purchase beef in bulk which they store in refrigerators at home. In lower income and mid consumers prefer to purchase meat on a daily basis. It then becomes easier to predict the consumption habits and amounts to stock every day.

Quality

Keeping everything constant quality has a big influence on revenue. Butcheries which have a reputation of quality record more revenue. Quality as noted breeds loyalty and helps generate word of mouth.

How to Compete Successfully in the Butchery Business

Competition has been increasing for the last four years (since 2013) and the trend is expected to continue.

Consumption of beef in Kenyan urban centers is more of a lifestyle habit rather than a diet or health practice. This means that consumption of beef is influenced by the economic wellbeing of the consumers, which again are a factor of the activities in the location and the economic health of the country at large. For instance an increase in the inflation rate will lead to a reduction in the disposable economy and hence the amount a consumer spends on beef.

This implies that the survival of a butchery business depends on how its owner(s) takes advantage of the prevailing opportunities in their localities. Some of the success factors for a butchery business in a competitive business environment are:

  • Location – A good location in the business is one with high foot traffic, customers with income enough to sustain a beef eating habit, and that is convenient to the customers. A new butchery with no obvious advantages will increase its chances of success if located in a good location.
  • Quality – Customers value quality which to many means tender and fresh beef. Quality beef is what generates loyalty and word of mouth; important success ingredients especially when operating in estates.
  • Reliable Supplier – A reliable supplier ensures timely delivery and is also consistent in terms of quality. Suppliers can make or break a business.
  • Honest butcher with great customer relations – With so many options available for consumers in urban area, bad service will be rewarded with the customer walking away to butchery. A good worker is able to balance the customers demand with the business
  • Differentiation: The fact that competition is intense and increasing in many urban centers, butcheries are trying to look different in ways that attracts and retains more customers.
  • Hygiene: Again like we mentioned the traditional butchery is not the epitome of hygiene and cleanliness, and though this has not prevented it from making a profit, to differentiate some butchery are trying to integrate higher level of hygiene. This includes basics like wearing clean aprons, good grooming, cleaning the floor and tables and generally a clean environment.

In summary, location, customer service, meat quality and trust are the most important elements of success in a butchery business. Customers are always looking for convenience, quality, and fair price. The butcher should take these issues into consideration when starting a business with the aim of making profits.

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