Nigeria’ll Save N800m Manufacturing Toothpicks Locally

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Ever wondered what profitable business you can venture into in this recession when access to foreign exchange remains a great challenge? One of the products banned by the Federal Government under former President Olusegun Obasanjo was toothpick.

As at the end of 2009, the total annual importation of toothpicks ran into about N800 million. The Federal Government then, as part of the efforts to encourage local production and save foreign exchange, took such commendable initiative, more so when the product can easily be manufactured locally.

Toothpick production is an interesting business that attracts huge demand. Despite its small size, it’s a business that has high yield return on investment.

In the past two years, assessing foreign exchange for raw materials and production machines has been a major problem for manufacturers, but as an entrepreneur in this line of business, you are shielded. This is because you can practically source all you need for your production locally. The beauty of it is that you can also earn forex for the country by exporting to other neighbouring countries.

Toothpicks are used both for homes, restaurants, fast food joints, hotels and travel industry. This is one of the profitable ventures that one can invest into considering that the raw materials, labour, technology and market for the products are locally available.

The relevant raw materials to produce quality toothpicks are 100 per cent locally available, handy all the year round and very cheap. This then implies that any investment into this line of production will produce at optimal capacity and in no distant time, the initial invested funds will be recouped.

Toothpick production is one of the commonly overlooked, but very (100 per cent) profitable businesses that anyone can venture into.

So far, investigations reveal that market for toothpicks not only exist, but is expanding and sustainable with the growing daily use of toothpicks.

Raw materials for making them are either wood or bamboo, plastic containers (with the company’s logo printed on the plastic container or printed labels), can easily be obtained in the country, which is a great advantage to this venture.

There is complete assurance of regular supply of raw materials, steady production, enhanced production capacity and profitability. In this age of technology, you can also decide if you want to produce plastic toothpicks. Below are further break down of the steps involved in starting up the business.

Business plan

The importance of business plan cannot be overemphasised. Even if the structure of the business and the market seem very simple, you cannot rule out the essential of a business plan. A business plan not only helps you plan well for the business, but also helps you stay focused after starting the business so that you can achieve your goals within the shortest time possible.

Your business plan will highlight the projected costs of starting and running the business, the target market and its growth potential, the competition, and many other valuable pieces of information that will help you make well-informed business decisions in the short and long terms. You can add a feasibility study targeted at your immediate community and competitors. The plan is important because it provides a blueprint of how to proceed.

Business registration

Register your business with the Corporate Affairs Commission (CAC) either as a sole proprietorship, which is a one-man business model or a limited liability company. Other permits to look into are Value Added Tax (VAT), ISO certification, environmental and pollution guidelines, NAFDAC, among others.

Funding

Your business guide will give you insight into how much you need to start the business and keep it going after its launch. If you cannot afford all the money required, secure funding from trade, merchant or commercial banks. The funds are needed for machinery, leasing space, marketing and sourcing raw materials.

Bank loans require good credit rating, and collateral such as landed property. Try to approach associations and cooperatives that offer loans to members. Try government loan schemes for small business owners. You can ask your friends and family for soft loans.

Capital investment includes fixed capital for landed property and machinery, while working capital is meant for staff wages, raw materials, utility bills and marketing.

Location

The rule of thumb regarding any business is that it should be located as closely as possible to the target market and the source of raw materials. Hence, it is important to set up your toothpick production company where there are many hotels, restaurants, and other places where the commodity is used in large quantities. All these will reduce transportation costs and haulage.

To produce toothpicks, you need a factory space for your machinery and production process. You can lease a small warehouse with a store front to reach customers, or rather you can save cost if you have some space in your house.

Raw material

It is important that the raw material for the production is available in large quantity so that the process would not be frustrated midway. Raw material for production of toothpick is wood and this wood is bamboo wood or any other hard wood and plastic containers (for packing the finished products). To be on the safe side, you must find two or three suppliers for each raw material you will need. This way, you will not be forced to pause production when a supplier runs out of materials.

For the plastic toothpick, the plastic material (plastic granules) is used for plastic toothpicks. You can easily source hardwood from wood markets in your area. To produce plastic toothpicks, melt thermoplastic material in an injection speed and pressure machine. Once cooled through the cyclic process, remove before packaging and labeling.

Machinery

There are machines for both small and large scale toothpick manufacturers. Buy high quality standardised machines to produce quality toothpicks. Besides, substandard equipment will not only affect the quality of your products, but the cost of repairing them too often can also have a long term crippling effect on your business.

The machines are both locally available and imported machinery. A toothpick production business requires equipment such as splitting, polishing, and sharpening machines. Others include dust collector and packing machine. It goes without saying that you will need to acquire these equipment before you can start your toothpick production business.

While you have the option of importing your toothpick making machines, you can have them made locally without any compromise on quality and efficiency.

For the plastic toothpick, you have semi-automatic and automatic injection molding machines. The automatic injection molding machines is more effective, precise and reduces production time.

Apart from the injection molding machine, you need scrap grinders, mold lifters and color mixers. Other machinery is packaging machines, molds and weight scale.

Your staff strength depends on the scale of your production. You might need machine operators, driver for delivery and supplies and sales representatives.

A List of Machinery used to Produce Toothpicks

· Weighing Scales

· A Variety of Molds

· Scrap Grinding Machine

· Automated and Semi Automated machine

· Dry color mixer

· Packaging machine

· Mold lifting Machine. Polishing, sharpening machine

 ‎Hire staff and start production:

In addition, you will need to hire a few more individuals to work with you. The number of people you will hire depends on the quantity of production. You will need people to handle each task involved in the production process.

Branding, packaging‎ and marketing

Branding involves creating a distinct feature for your product that will stand it apart from the crowd. This involves making the packaging attractive.

Tooth pick are packaged in small light plastic containers.

For the marketing really, you need little effort, but if you want to sell more and have a quick turn over, then marketing is essential.

You need to network with consumers of your product. Major consumers are hotels, restaurants, fast food outfits and local eateries.

You will also need to adopt some effective marketing strategies to attract customers. Such strategies include reducing your prices slightly while not reducing quality. This will help you “snatch” some customers off the competition. Actively seek supply contracts for your products or focus on export market.

Advertise your products through electronic and print medium. Other advertisement channels are Facebook advertisements, Google adsense and your own website or blog.

Hire sales representatives to work on commission per sale.

As stated earlier, tooth pick production is a very lucrative business that an entrepreneur will not regret venturing into. It has a very short payback period of between 1-2 years, with almost 100 percent return on investment.