If your going to make money from production or manufucturing the target should be aiming for volumes. Bulk production, bulk sales and bulk purchases of raw materials of production. Benefiting from economies of scale is the secret.
We have been buying milk for 1,600 shs a litre and the only way we were going to make sensible money off our yummy doughnuts was going to be finding a way to reduce costs starting with the costs of milk. This would mean buying directly from the farmer which would mean having the ability to preserve the milk. So we bought a small fridge with the ability to preserve 10 litres of milk plus other ingridients we use. Now we can buy them at factory or wholesale prices and save alot.
We got a supplier of milk who is giving us milk at 1,000 per litre that’s 10,000/= for 10 litres meaning we get to save 6,000/=..Looks small until you realise you use 10,000 litres monthly. So as a prosucer focus on bulk purchases. We are also looking to buy our flour directly from the factory hence working on our storage capacity and capability.
So this week we bought an extra sales motorcycle and a fridge and additional assets to the business.We continue to build and like I promised at the start of the business/year. We shall be sharing our experiences with you so you can learn from them as you build your own business. We have a 5 more months to go with the lessons after which we shall keep our operations private for the sake of our investors and the business.
Jaluum Herberts Luwizza is a Speaker,Writer, Columnist with the C.E.O Magazine and Contributor with the Nile Post.He is also a Business Consultant with YOUNG TREP East Africa’s No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.twitter:jaluwizza
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