How to Set up a Cooking Oil Manufacturing Business [2021 Guide]


    While a lot of entrepreneurs focus hard on either the tech sector or online options, these aren’t the only options. Some entrepreneurs prefer the idea of making something tangible. For these entrepreneurs, options like a cooking oil manufacturing plant offer more allure than e-courses or online marketing.

    Launching an oil factory also takes substantially more planning than a basic online startup. If you like the idea of starting an edible oil factory. Keep reading for our guide on how to start one.

    Industry Research

    The process starts with a lot of industry research. You must understand the current and near-future projected trends. A lot of people may use olive oil, but that doesn’t mean it’s a growing market segment.

    Your best option for launching a successful cooking oil manufacturing business is for you to find a growing market segment and produce that kind of oil. It gives you the best chance of grabbing a sustainable piece of the market.

    As part of your industry research, make sure that you know the hazards.

    Business Plan

    Once you do your research and settle on a market segment, you must write a business plan. You can opt for a traditional plan, which creates a detailed breakdown of the business, market, and provides financial projections.

    Your other main option is a lean startup business plan. These plans focus more on vendor and customer relationships, marketing, and finances.

    Material Supply

    You can make cooking oil from a variety of seed oil sources, such as peanuts, grape seeds, soybeans, or sunflower seeds. You can buy these seeds from suppliers or you cultivate them yourself. Both options carry possible complications.

    If you grow your supply, you face the same hurdles as any other farm. Pest and weather can destroy your supply.

    If you buy your supply, you must negotiate pricing on regular basis. Depending on recent conditions, that can drive up your costs.

    If possible, plan on locating your facility close to the supply to minimize initial transportation costs.


    Once you know where you plan on getting your supply from and have a business plan in hand, you move on to the funding process. You can approach banks for traditional business loans. If you plan on going this route, opt for a traditional business plan, since banks will expect them.

    If you’ll look for venture funding, you’ll probably want both a lean startup business plan and a traditional business plan. The lean plan works for pitch meetings, but they’ll want to see that traditional plan eventually.

    After you secure funding, you purchase the building, equipment, and bring in employees.

    Launching Your Oil Factory

    Launching an edible oil factory will take time. You must do your research, develop a business plan, and secure funding. That’s just the beginning.

    You must also secure customers, preferably local or regional grocery store chains, and develop a manageable supply chain and logistic support.

    Looking for more help and advice for your journey into the entrepreneur’s life? You can find more advice and tips in our Business section.

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