How to Start a Milk ATM Business

One of the easiest and guaranteed returns business you can start is a milk ATM business. This is because milk is a highly consumed product especially in urban centres. Almost every household in these areas consumes milk every day. However not every house is able to buy packed milk from leading brands. This means that there is a huge market at this level if you can sell them affordable milk. In this post we will be discussing how to start a milk ATM business.

How to start a milk ATM business- planning stage

Starting a milk ATM business is quite affordable compared to some other business. The capital needed is quite minimal because it is not machine intensive. You only need a milk ATM for that matter.

Market survey

Though it’s just a simple to start business, it’s important to do a market survey to help determine how the market might respond. It also helps you know how much competition is there and if there are gaps you can leverage on to venture and dominate. A market survey also helps you gauge the target audience to know if it is the right one to target.

For example you might realize a certain market due to the fact that it is a residential area composed of high income earners, they might not prefer to buy milk from an ATM but rather prefer to buy packet milk from leading brands. This might lead you to focus on a different location where there are middle and lower income earners who want to save every coin and therefore buying cheaper milk from an ATM on a regular basis is more suitable for them.

Business plan

After doing a market survey and you are content that your target area is suitable for setting up a milk ATM business, you can now go ahead and write a business plan. The advantage with this type of business is that it’s not complex and very affordable to start so the business plan will be easy to come up with. Some people ignore it altogether but it’s important to come up with your so you can have a clear roadmap of where you want to go.

A business plan indicates the objectives of a business and how to realize them. It also shows the sources of finance, the major stakeholders like key people needed to operate the business, how to expand/scale up etc. it is like a roadmap of where the business is headed.

Sourcing for milk suppliers

One of the most important aspects of this business you have to get it right is where you source your milk. You must have a reliable source/supplier of milk else you are doomed even before you start. The supplier must be supplying you with enough milk, good quality milk that is not watered down and handled in a very hygienic manner right from the cow to you.

If you are sourcing directly from the farmer(s) you will need to pasteurize the milk. However if you are sourcing from a supplier who supplies to milk ATM businesses then no need to pasteurize the milk and therefore you will also save on the cost of a pasteurizer or pasteurizing the milk using other means.

Searching for suitable business premises

The next most important undertaking is searching for a suitable business premises that is conveniently located. It has to be at an easy to access place where there is good human traffic. The most preferable is at a shopping centre or where there are many other businesses because clients prefer to get everything they need at a central place. Also ensure it in on the ground floor on the front row. Having a milk ATM on a floor where clients have to climb stairs is not the best thing unless it is the only available space and that there aren’t competing businesses around because clients will prefer to buy from a shop that is more accessible to them.

The business premises should also be connected to electricity, drainage and have clean water. These are very important amenities for the smooth operation of the business. A milk ATM needs electricity to operate the pumping mechanism, cool the milk and operating the PLC. The PLC is used for keying in the amount of money and communicate to the pump to discharge the right amount of milk equivalent to the money keyed in depending with price per litre set. It also keeps the sales records for easy reconciliation even if you have employed someone to operate the business for you.

How to start a milk ATM business- equipment that you need

Milk ATM- this is the main and most important equipment you will need to invest in. It helps you sell the milk easily without guess work and wastage. First the wastage is avoided because it is designed to dispense milk without spilling. Secondly the wastage is avoided because it has its own internal cooler which means the milk inside the storage tank is kept at low temperatures that prevent bacteria responsible for making milk spoil. When buying a milk ATM buy the best quality you can find.

Milk pasteurizer (optional)- selling pasteurized milk from an ATM is not optional because it is a requirement by the Kenya Dairy Board. But a milk pasteurizer is optional if you are dealing with pasteurized milk from a supplier who sells already pasteurized milk to milk ATM businesses. Also if you are selling small quantity milk say 20 litres or less you might not need a milk pasteurizer. However if you are selling large quantities and sourcing your milk directly from farmers then you need to invest in a milk pasteurizer.

Milk chiller – optional

How to start a milk ATM business- implementation stage

Business registration

If this is a new business and you aren’t adding the milk ATM to an existing business like a shop then you need to register it. However in some regions, the county health department might need you to have a medical certificate to prove you are medically fit to handle milk for human consumption. You can visit your county offices to know exactly what you require for this business.

Renovating the business premises

The next phase is renovating the business. The good thing is that you don’t need to do a lot of renovations for this type of business regardless of whether you are starting it as a standalone business or adding the milk ATM to an existing business. Just factor in the space for the ATM, receiving the milk and serving the customers.

Acquiring the milk ATM

The next step is now acquiring the milk ATM. We recommend you acquire from Saset Limited- www.saset.co.ke. These are the market leaders in manufacturing of milk ATMs as well as salad cooking oil ATMs. You can never go wrong with them in terms of pricing and quality.

Scaling up and expansion

After you have been operating the business for some time, you can now start scaling up and expanding it. One of the strategies is by introducing other milk related products or items that are bought together with milk when clients go to shop either in the supermarket or retail shop. The milk related products might include yoghurt and mala while other items bought together with milk include eggs, bread, tea leaves, cocoa and chocolate powder, coffee etc.

After that you can now start looking for other suitable locations you can set up new branches. The experience gained in running the current business will be very helpful in expanding to other areas.

Final word

A milk ATM business is one of those businesses you can venture into with confidence that you will make sales. As long as you are selling good quality milk that is not watered down and other milk related products are of high quality and you are conveniently located then you can rest assured you will be in business.

We hope this information helps you venture into milk ATM business with much ease than you could have without knowing what you have learnt here. All the best as you venture in the business.