How To Start A Profitable Cold Storage Business

Do you want to start a cold storage business? Find here a detailed cold storage business plan sample checklist for your ready reference.

If you are looking for a one-time investment business, then starting a cold storage is just perfect for you. Generally, in this business, the initial investment is higher compared to other small businesses. However, this type of business ensures a constant return on a long-term basis.

Cold storage is a profitable business both in the developing and developed countries. In addition, you can find two different types of cold storages according to the storage facility. One is specific for one product (example potato) and another is multipurpose. However, multi-purpose cold storages ensure better return and profitability overall.

Demand & Profitability Of Cold Storage

Globally, the wastage of fresh vegetables and fruits is huge. Generally, food crop growing countries hold the maximum share in the wastage for fresh foods. Cold Storages are essential for extending the shelf life, period of marketing, avoiding glut, post-harvest losses reducing transport bottlenecks during the peak period of production and maintenance of quality of produce.

Besides, cold storages have an important role in reducing the wastages of the perishable commodities. In addition, it helps in providing remunerative prices to the growers and to make available farm products to the consumers at competitive and affordable prices.

Additionally, changing lifestyle and demand for processed or packaged food is creating the need for cold storage solutions globally.

Cold Storage Investment Cost

The initial investment is definitely very high in this business. Generally, the investment includes acquiring the land, building construction, obtaining permissions and licensing, arranging utilities like water, electricity etc. Additionally, you will need to investment a major startup capital in procuring the cooling machinery. Generally, modern and updated machinery ensures the better performance and long-term sustainability.

Apart from the above-mentioned fix costs, you will need to consider the working capital expenses also. The major considerations are staffing, utility bill payment, and promotional expenses.

Cold Storage Business Plan Sample Checklist

Craft A Business Plan

Starting a cold storage business demands a strategic planning and careful implementations. Therefore, crafting a business plan or project report is the most important aspect of starting this business. According to your investment capacity, you will need to decide the business size. Additionally, you must have a financial planning with a projected ROI and payback period. A business plan helps you in numerous ways. It helps in commencing the business properly, getting finance and ensures smooth operations.

Secure A Location

Location plays an important role in this business. You must secure a location either near the producing farms or consumer centers. Because you must cater the local produces for your warehouse. Additionally, you will need to procure an approximate one acre of land for a multi-purpose/multi-commodity cold storage plant of 5000 MT capacity.

Obtain The Permissions & Licenses

Generally, this business attracts different licenses and permissions. And it depends on the specific location where you are starting the business. Additionally, check the upcoming compliances and tax liabilities also.

Arrange Finance

Cold storage is a capital intensive business. You must have an investment capacity of 3 to 4 Corers for commencing this business. Generally, you can set up this business with the financial help from banks. In addition, check if there is any subsidy or Govt. grants are available for this business. In India, national Horticulture Board provides financial assistance for cold storage business for the entrepreneurs.

Build The Cold Storage

The next step is building the warehouse and installing the machinery. Consult with an experienced architecture firm for planning and building the construction. Get the quotes from the reputed machinery suppliers. Choosing the right machinery is an important part of the overall performance of the store. In addition, check the price, customer feedbacks and warranty periods. Ask the machinery supplier for on-site training.

Also Read: 50+ Most Profitable Agro Processing Business Ideas

Promote Your Cold Storage Business

The overall success of running a cold storage comes from the right advertising and promotion. And you must start the awareness campaign when your start to build the store. According to the products you want to accommodate, identify the target demographics.

Target segments include supermarkets, wholesalers, warehouse companies in urban as well as electrified villages. In this business, your target audiences will be the growers. producers, retailers, distributors, exporters etc.

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