Introduction to make money from mini flour business
Small businesses are a great opportunity for entrepreneurs who wanted to start their business on their own. One such small business idea that is comparatively easy to start is a flour mill or an Atta Chakki. This is the most common business in India. Although there are many flour mill plants in the market, then also set up a flour mill factory is even profitable. The flour is a useful ingredient in preparing several types of processed foods such as bread, biscuits, cake, Rotis, parathas, etc. earlier people used to buy packaged flour which is produced by companies, but now due to health consciousness the demand for fresh Chakki flour has increased. Due to this the flour business industry continuously enjoys significant profits. If one wanted to open a flour mill business, there are few essential things to understand. Now, let us check how one can start and make money from mini flour business in India.
Ideas to start a mini flour business to make huge money
Create a business plan
The flour mill business can be started in both rural and urban areas. Flour is one of the basic essential ingredients in a country like India where Rotis, chapati, pulkas, Jowar, parathas are part of the basic staple diet. Before starting one must know the type of business that is opted to start. There are two types of the flour mill business. The two different models demand different investments and infrastructure. One is a small scale and basic mill where customers get their grains and get them ground and milled for a minimum amount. This business model needs small retail space to accommodate machines and run business and milling machine customers will pay for the grinding charges. This is an easy model and requires a very small capital investment. The investment is only for the machine set up, but this can also be rented initially if needed and space. The small scale flour business is flexible and can adjust production based on market needs. Whereas in a large scale the flour is prepared using raw materials, packs them, and sells them to consumers and retailers. The capital to start this business model is high and can earn significant profits. It requires advanced flour milling machinery.
Things to know before starting flour mill business
Once registration is done location is established and machinery is set up the next process is to produce flour by grinding whole grains. Points to be considered to run production efficiently:
- The location of the business must be chosen carefully. It will impact the profit margin. The residential area is the best one to choose where the demand for the flour mill is high in those areas.
- The person should possess training in operating a flour mill machine.
- The premises must be clean and should able to produce any type of flour.
- The time allocated for the business can be flexible to attract customers.
- Basic knowledge about the flour mill machines must be known in case of break downs.
- Without a license, it is not acceptable to start the production process.
People in India use flour in large quantities. The location to set up the business is an important criterion. One must do research in nearby areas and collect information about flour mill businesses. The number of flour mills in the required area should be enquired. Make sure to set up the flour mill in the area where there is no competition.
Legal formalities to start mini flour mill business
The two business models are the types mentioned to start a flour mill business. One must determine the model chosen and set up accordingly. To start a small scale business no registration is required. It is optional and not mandatory. But it is required to obtain a business license from the local municipality to let them know about the business. The certificate obtained must be displayed on the wall of the shop. Whereas, the large scale business registrations, licenses, and permits are required. The business form whether it is a sole proprietorship, partnership, or Company must be determined. The business must be registered accordingly. After registering the business applies for a business license at local municipal authority. As this business is considered as a food business related to the processing of food or food products, it is mandatory to obtain a license from the Food Safety and Standards Authority of India FSSAI. FSSAI is responsible for promoting public health by regulating and supervising food safety. List of legal formalities for large scale business is listed below:
- Determine the form of organization and obtain a license from ROC.
- Obtain a trade license from local municipal authorities.
- Apply for Udyog Aadhaar MSME online registration.
- Apply for FSSAI registration.
- Check tax liabilities.
- Any other permits if required as per state law.
The cost required setting up a mini flour mill business
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The small scale flour mill business requires a very small investment. The flour mill machine can be purchased or it can be rented initially. The cost of new flour mill machinery costs approximately Rs. 2,00,000/- to Rs. 3,00,000/-. The premises required to set up the business can be owned or rented. So, when we calculate the total investment it can cost us around Rs. 3,00,000/- to Rs. 4,50,000/-. If there is no required capital to set up business loans are also easily available. One can use this advantage and start own business.
- Flour mill machinery – Rs. 2,00,000 to Rs. 3,00,000
- Premises if rented – Rs. 1,20,000 to Rs. Rs. 1,30,000 per annum
- Electricity and water – Rs. 10,000 to Rs. 20,000
- License – Rs. 30,000 to Rs. 40,000
So, the investment is less and it can be easily established. Whereas, the large scale model business requires huge investment. The investment includes raw material, machinery cost, registration and licenses cost, water and electricity, manpower, drainage facility, transportation facility, marketing, distribution costs, administration costs, etc. Generally, a flour mill project comes with a lot of customization. Based on output quantity the investment must be bared and install the machinery.
Products ground in flour mill
The products like which are mostly consumed in our daily life are produced as flour in a flour mill.
- Wheat flour is commonly known as atta.
- Wheat flour (maida)
- Gram flour
- Corn flour
The price of wheat ranges from Rs. 35/- to Rs. 40/- Based on various brands. The wheat is ground in the flour mill. The cost of crushing the wheat may cost based on quantity. Generally, the cost per kilogram as Rs. 5 to Rs. 10. So, the overall cost of the flour ranges to Rs. 45 to Rs. 50. There are many popular brands that provide atta under best qualities like Ashirvad which cost around Rs. 55 to Rs. 60.
The profit margin in the mini flour business
Whole wheat (atta) or any other kind of flour including Maida, Bajri, Jowar, Ragi are all used as flour to make Rotis and parathas. Flour is also used to make fast food items such as pizza bases, buns for burgers, pasta, doughnuts, bread, biscuits, noodles, etc. Thus flour as a commodity is always needed whether for household use or for restaurants. Therefore starting a food business, specifically a flour mill or an Atta Chakki is an excellent business idea.
The profit can be estimated based on the production costs. The small scale business won’t fetch huge profits. It is estimated that only the amount required for livelihood can be earned. To acquire profits flour mills can be established in different areas. One can decrease production costs to get minimal profits. So, the profit margin is less when compared to large scale businesses.
How flour mill work?
The whole grains are ground, crushed, and powdered into small pieces that are called as flour. The oldest method of grinding grains is by crushing them with stones by a motor. Steam power, electric or gas power replaced water-wheel technology, while iron or steel rollers were developed as more modern alternatives to stones. Today, roller mills are the most common mills used in large scale flour production. They rely on a process of crushing grain between two rapidly rotating rollers, then separating the ground grain into individual components, including bran, germ, and endosperm. Finally, the ground material is filtered depending on the desired qualities of the flour. Small scale flour mills operate in the same way that larger industrial mills do. They usually run on electric power or can be operated manually. Electric home mills are easy to use and the operator simply puts grain in, turns the mill on, and very soon has fresh-milled flour.
The conclusion to make money from mini flour business
Thus flour mill business is a good investment. The capital required is not high when compared with other businesses, but the demand for the flour is high. If one is thinking to start a flour mill business the above-mentioned article can help you out. To reduce input grain costs, you can go for Bajra Cultivation or other cereal grain farming.