Lately, the boom in the real estate industry in Nigeria has made the demand for all kinds of building materials high all over the country. So if you’re looking to venture into the business, it is a fast-moving one.
The building materials business in Nigeria is very profitable and could be a source of daily income if operated the right way. There are different types of building materials, so you can approach the business In many ways.
The building materials business can be started by anybody regardless of location and gender. You can also start the business based on your capital, whether small or huge. That means the business can be started both on a small scale and a large scale.
While the business is very easy to start, you must know all that it entails to start and succeed. That is why we’ve come up with this post to show you exactly how to start a business materials business in Nigeria regardless of your location.
That’s not all, but you’ll also discover the cost of starting, the profit margin of the business, how to source building materials to sell, different ways to start the business, and so on.
So, without further ado, let’s get started!
Starting a Building Materials Business in Nigeria
Also known as building accessories, the building materials business involves the sales of all kinds of building materials to make money. This business is very popular across Nigeria, as it makes a lot of money.
The building material business is a broad venture that can also be niche. That means you can either start the business by selling all kinds of building materials at once or go with one type such as opening a cement store.
Whether you’re a male or a female, you can start a building materials business anywhere in Nigeria. The profit margin of the business is juicy, and all kinds of building materials sell fast.
Related: How to Start a Cement Business in Nigeria and Make Millions
Building Materials to Sell in Nigeria
There are different kinds of building materials to sell in Nigeria and make money. They include:
- Roofing Sheets
- Plumbing materials
- Electrical materials and accessories
- Sand, gravel, etc
- Steel rods and other metal products
- Equipment used by bricklayers
And so on.
Is Building Materials Business Profitable ]n Nigeria?
Yes, the building materials business is very profitable in Nigeria. This is usually because of the boom in the real estate sector.
Not just that, but all kinds of building materials have been in high demand over the years. If done the right way, there’s no limit to the amount you can make selling all kinds of building materials at once, or settling for one type of product to sell.
The profitability of this business depends on the individual material you sell. You can’t expect cement to have the same profit margin as roofing sheets. Their cost varies, as do their profits.
However, regardless of the type of products you’re selling, the profit margin of a building material business ranges from 20 to 50 percent. Though you could make more or less depending on the fluctuation of price.
Keep in mind that location also determines how profitable a building material business will be. Also, the more products you’re able to sell, the more money you’ll make.
Check Out: 33 Highly Lucrative Businesses in Nigeria Right Now
How Much Does it Cost to Start a Building Materials Business in Nigeria?
Not having a clue about the capital needed to start a building materials business is one of the things that get people stuck while looking to start the business.
Realistically, the building materials business is capital-intensive. That is you need a reasonable amount of money to get the business off the ground.
Although it can be started both on a small scale and a large scale, the cost of starting depends on whether you want to start selling all kinds of building materials at once or if you want to start with a specific product.
Starting an all-in-one building materials business in Nigeria, you’ll need anything from 500,000 to millions of naira as capital. Nothing down to a specific product, you would need anything from 100,000 to millions of naira depending on the type of product you want to start selling.
For, example, the cost of starting a cement business is different from the capital required to set up a plumbing material store. Here, you can start a small-scale cement business with less than N200,000, while selling plumbing materials could cost you 500,000 naira or more to start.
Related: Top 25 Untapped Businesses to Start with Little Capital
How to Start a Building Materials Business in Nigeria
1. Decide on Your Mode of Operation
Like I said earlier, the building materials business is a broad venture. So, you need to decide on your mode of operation to get started. There are two ways you can operate the business, and they include.
Opening an All-in-One Building Material Store
Opening an all-in-one building materials business involves selling different kinds of building materials all at once in one shop. Starting the business this way could be very profitable, however, it requires huge capital. If you’re looking to open an all-in-one building materials store, you must be able to deal with multitasking.
Starting with a Niche
This involves selling just one type of product at a time in a shop. Niching, you can start a block industry, become a cement distributor or retailer, sell all kinds of roofing materials, get involved in the steel and metal materials industry, and so on.
As a beginner, it would be ideal to niche down while looking to start a building materials business in Nigeria. This is because you’ll be able to quickly grow. Also, it provides the opportunity to later expand into an all-in-one building materials business.
While deciding your mode of operation, you should consider the capital you’ll be able to raise, and also, how much risk you’ll be able to handle. Also, put the location into consideration while deciding on your mode of operation.
See Also: How to Start a Distributorship Business in Nigeria
2. Do a Market Survey
Based on the level at which you want to operate, carry out thorough market research to get to understand the business. Here you’ll need to make some findings on how the business works in your area.
Find out about your target audience, and get to know the best-selling types of building materials to start with. Also, you’ll need to find out the laws guiding the business, as well as the registrations required.
More so, you will also need to research how you’ll price all the types of building materials you want to sell, and also make findings on what moves the prices. To get the best result out of your market research, it would be ideal if you meet someone already in the business, build a business relationship, and do your findings.
3. Draft a Simple Business Plan
Just like every other business, you need to draft a business plan to work with while starting a building materials business. Drafting a business plan will help you understand the business, and it will also serve as a road map toward the success of your business.
In your plan, you should include the short and long-term projections of your business both in terms of growth, as well as finance. You need to make your business plan as realistic as possible, so it would be ideal to get inspiration from free templates you can find online.
4. Get Your Capital
Like I said earlier, the capital needed to start a building materials business is one major thing that sets people back while looking to start the business. This is because it is capital-intensive.
However, there are lots of ways you can source funds for the business. You can seek assistance from friends and family through partnerships or loans to get the business off the ground. Perhaps, if you have a little money at hand, you can walk up to suppliers and ask for goods on part payment. This works well if you want to start a cement business.
5. Get a Store
After raising your capital, the first thing you want to invest in is a store where your goods will be kept for sale. Whether you want to start an all-in-one building materials business, or niche down to one product type, you need a shop to start with.
Depending on how big or the type you want to start, the requirements for shop vary. Selling one product type, you would need a medium size shop to start, while you’ll need a spacious and big store or warehouse while looking to spread across all niches.
Since building materials are usually used for new construction, it would be ideal if you get a shop near or at new construction sites, or a developing suburb area. This will help you make quick sales, as the demand would be high in those places. You can also open a building materials store in town, although you’ll need a strategic marketing technique to stand out.
See Also: How to Start a Cocoa Business in Nigeria Right Now
6. Register Your Business
Not that necessary, but i: you want to start a standard building material business it would be ideal if you register your business with at least the Corporate Affairs Commission (CAC).
This will help your business look more trustworthy, and you’ll gain the opportunity to work with contractors that buy building materials in bulk. Also, if you want to source your product directly from the manufacturing companies, having a registered business will help you get approved more quickly.
Also, find out if there’s any building material sellers association to join, so as not to get disturbed after starting.
7. Source Products
After completing every required registration, the next thing is to find suppliers and source products to sell. The process of sourcing building materials to sell differs based on your mode of operation.
If you’re looking to start an all-in-one building materials business, you’ll need to source suppliers for every product you want to start selling respectively. You can just work with one supplier if you niche down.
While sourcing suppliers, you’ll need to take your time to set some rules that suit you and will help the growth of your business. So, you’ll need to work with those rules and go with suppliers that meet all the criteria.
You can also find someone in the business at the level you wish to operate and ask them to recommend a supplier.
8. Start Selling
Once you have your distributor supply the goods to your shop, the next thing is to start selling. But before that, you’ll need to set up the shop perfectly and arrange the goods in order.
After setting up the shop, you’ll also need to analyze the goods to know how you’ll price them. If you did step one (market survey) well, you should know how much every one of the goods should be priced.
Once that is done, you should then start marketing your products. The best marketing strategies for a building material business are networking and word of mouth.
Here, you’ll need to find and create a business relationship with contractors and bricklayers, then offer them a commission for every customer they bring to you. You can start this with the local bricklayers in your area. It works like magic.
The building material business is a very lucrative venture in Nigeria. And the rise in the real estate industry has caused a daily increase in demand for all kinds of building materials. So, if you’re looking to venture into it, there’s no better time than now. You can start now, and make the most money if you carefully follow the processes explained in this post.