To start a gold business, what should be done basically is to invest in the buying and selling of raw gold and scrap jewelry. For those who have interest in this business of trading in gold or want to invest in the business, here are highlighted steps you need to follow as to start investing in it. Also, we have been able to discuss investment ideas in gold business which guarantees you huge returns when you start the business.
Lots of business oriented persons who have invested in gold do well to preserve it in form of bullion coins and gold bars. These materials do not depreciate in value (not tampered by inflation and recessions) as they can be stored for a very long time.
Best Ways to Invest in Gold
For you to know the best ways to invest in the business of gold, you need to ask and understand the following questions, How and where do I purchase or invest this gold, Do I open a jewelry store and How do I put them to sales? as gold is often sold as jewelry in alloy form. The Gold contents of alloys and jewelries are measured in carats (k) and the higher the caratage, the higher the percentage purity of gold in the alloy. However, pure gold is designated as 24caratage. Metals such as Copper, Silver and Palladium are the most common base metals that are used in alloying gold. The Copper gives the finished product a distinguished reddish colour.
It can be found in reserves of different parts of Nigeria like Niger, Kebbi, Kogi, Kaduna, Osun, Kwara, Zamfara, Katsina, Kano, and the Federal Capital Territory, Abuja. Gold comes in different forms in which you can invest in such as gold dust, gold ore, gold bar and the gold rock. Deposits of gold are alluvial and are currently been processed on a small scale as they occur in small quantities and then worked on in producing gold bars. Once you are able to discover or answer the questions how and where to get the gold, then you can proceed to the process of making money from it.
Making Money through Buying and Selling
The buying and selling business of gold is a lucrative investment which has proved to be profitable. One can even decide to start one’s business from home as long as there is an understanding about the rudiments and technicalities of the business. Below are various lists of investment ideas in sphere of business.
- Mining and Sale of Raw Gold: This is getting involved in the investment of gold exploration and its sales in raw form as a raw gold dealer
- Direct Ownership: This is one of the most profitable means if there is enough capital to start as it is a defensive way of holding value in an asset.
- Opening a Shop: This is also profitable for those who do not have enough capital to start as having a direct ownership. The step to be taken is to get from those who have it and then you resell.
- Flipping Gold: This involves buying when the price drops and then reselling for profit when the rises to a profitable range.
- Goldsmith Centre: This involves providing services of gold casting, molding, purification, production and the customization of gold rings, bracelets, neck chains etc.
- Investment in mutual funds
- Gold Exchange-Traded Funds (ETFs)
I have being able to take you through available investment ideas and if you are ready to start the business of investing in gold, here are simple steps listed below that you should take;
Steps To Start the Gold Business
- Be Registered: Anyone who desires to own a business must get it registered as it is a necessity. So making your gold business legitimate requires it been registered and also getting a business name for it. This is done by visiting the Corporate Affairs Commission (CAC) in Nigeria. Individuals, Corporate Organizations and the Government will become so comfortable in doing business with you when it is registered.
- Get a Business Plan: A business plan will so prepare you for the challenges involved in a business and plans on how to overcome them as such as the gold business. The business plan is to contain plans on how to expand your gold business in the future. To know what amount would be enough in starting a gold business, a well-written business plan would have answers to most of your questions.Any business that would survive must not do away with a well detailed and researched business plan. You can get free templates on a business plan to work with here on this platform.
- Examine the Best Form of Investment: It is so important you take time to carry out extensive market research or survey and feasibility study on various types of gold business before starting this investment. This step will sure guide you into what kind or class of gold to invest in and where to get market for the gold. Some of these include gold ore, gold rock, raw gold dust, gold bar, gold foil etc.
- Get Experienced in the Assessment of Gold and its Value: Gold comes in different alloyed forms and weights and so makes it the responsibility of any willing or serious investor in gold to be able to evaluate how much gold is contained in a product and weights in either grams (g) or kilograms (Kg). Having the knowledge of this is known as the percentage purity and it’s rated as Caratage. Gold of 24k (carat) contains no impurity as it is the point where we have purity in Gold and 10k (carat) contains a higher degree of impurities as base metal.
- Get Sources of Gold to Purchase at Competitive: Nothing really comes cheap in a business even in Gold investment, if it is, it’s most likely to be a scam. So, its better you get a supplier of gold at reasonable price that guarantees you decent returns on your investment instead of looking for cheap gold to buy. Your source of supply must be reliable, trusted and must be one who delivers on time.
- Get Market For Your Business: Before starting this gold business, do well to construct and conduct a specific market survey. Get to know who your buyers of gold are, how much of that can be sold easily within a short time and the type of gold these gold buyers are willing to purchase. Also, learn to partner with other investors in raising enough capital to purchase more kilograms of gold and to be able to gather enough money to start wholesale business in gold. You could also try work with those who won shops as well as its retailers. This material is a luxury and not a necessity so you need to be active in looking for buyers of it yourself.
- Purchase Equipment For Gold Business: Getting needed tools to be used in gold business is important if you don’t wanted to be cheated and must ensure that these tools are well maintained. Some of which are used in gold smelting, weighing, molding, testing etc.
- Business Branding and Promotion: For any business to thrive, it is important to spread its reach. Advertisement is also the sole of business as punctuality is. If you can afford it, get your product and services branded and advertised on TV, Radio and also the print media. There are several online platforms that are also for affordable advertisement.
- Follow Trends in this Line of Business: Another thing to do if you really want to make it in this business is to follow the trend of operation as the demand, gold use and market price of gold fluctuates. For instance, there are notable variations in people’s demand and taste for gold jewelry during different times around the year.
- Get it secured: This business of gold is capital intensive as it attracts stealing and pilfering. So it is important to maintain high security around your gold business premises. You could install security doors, electric fencing, CCTV as well as the use of security guards. You should opt for the best and that which you can afford.
How to Obtain a Gold Mining License (Lease) in Nigeria
There are currently two routes available for raw gold mining investors into the mining sector in obtaining a license in Nigeria.
- Firstly, purchase a pre-existing gold mining property from the original owner. Then, you can apply for a business license from the Ministry of Solid Minerals Development.
- Apply for the following mining rights: Prospecting Right (PR), Exclusive Prospecting License (EPL) and Special Exclusive Prospecting License (SEPL).
Finally, to get this business started you need to consider the capital needed. Therefore, purchasing a good quality gold scale and gold testing kit may cost you around N10,000. Money would also be spent on advertisement likewise that which is required to buy your first set of gold depending on your capacity. All of these put together may cost $500 – $5000 depending on the scale of the business.