How to Start a Transportation Business in Nigeria – Transportation is an unavoidable engagement when it comes to the aspect of human existence as man needs to migrate from one location to another. Transportation business is a very profitable business to engage in Nigeria.
No matter the sphere of life you find yourself, one needs to take transport to get to work, carry out daily human activities and a whole lot, else you are working from home but definitely you will need transportation to get to see distance friends or to go for trips etc.
Do you want to start a transportation business in Nigeria? Or are you currently looking to begin a side business in the transportation industry because you have probably heard of how lucrative it is in Nigeria? This article serves as a guide on all you need to know about starting your transportation business in Nigeria. Let’s Dive in!
Is Transport Business Lucrative in Nigeria?
Transport business in Nigeria is a very profitable business for some very obvious reasons. The reason why the business is lucrative in Nigeria is that the business meets a need. Absolutely,the transport business is a very profitable business in Nigeria because it makes people to be able to move from one place to another.
Tools Needed to Begin Your Transportation Business in Nigeria
There some necessary tools that you need to prepare and make available in hand prior to starting a transportation business in Nigeria. You also need to prepare the spare ones in your vehicles. Some of these tools are:
- Air tools & accessories
- Clamps & measuring tools
- Creepers & carts
- Engine & vehicle lift
- Fitting & hose/ Line connector
- Nuts, Bolts Washers
- Power tools
- Screwdrivers to mention but a few.
How to Start a Transportation Business in Nigeria
Below are the process to utilize when you want to start your own transportation business in Nigeria;
1. Make up your mind on the type of transportation business you wish to carry out
If you are settling for tri-cycling business or Okada business, they are not the same as commercial bus business. The capital investment estimate and the regular vehicle maintenance as well as the running costs is much compared to tri-cycling business, however the day to day return on investment is also different.
2. Pick your location and the routes that you think are lucrative
You should conduct an extensive research to make sure your location is well suited for the particular transportation business you want to run. In terms of the financial demands of the “Area Boys” and the regulations by the State Government it is recommended that you begin your transportation business in Nigeria in small scale first and then acquire good experience before you make it big.
3. Get your vehicle either via lease, hire purchase or just buy it
You are to make sure that you register the vehicle with the licensing authority, get a vehicle insurance and make sure to prepare other necessary documentation that are needed when you want to operate in your location with no hindrance. You are also expected to register under these bodies (depending on your location and the kind of transportation business) :
- National Association of Road Transport Workers.
- Nigerian Association of Road Transport Owners (NARTO)
- Road Transport Employers Association of Nigeria (RTEAN)
- National Union of Road Transport Workers (NURTW)
- National Association of Government Approved Freight Forwarders (NAGAFF)
4. Start Driving your vehicle yourself before employing a driver
The best advice at this stage is that before you start your transportation business , you should be the professional driver to be the rider of your first commercial bus or your tri-cycle since at this stage you may probably have one vehicle, you will be able to take care of it more prudently than the best driver.
So you just need to ensure that you have a driving licence and you should be registered under a transport union. When you drive a commercial vehicle for a year, you will notice that you are no longer a stranger in doing transportation business and you will be able to gain so much when you eventually buy your second vehicle and then you can employ a professional driver.
5. Employing a professional driver
If you are running other businesses asides the transportation business , you are free to engage a professional driver and then you could negotiate a good term of memorandum of understanding between you and the driver. These memorandum may include: the return the driver need to deliver on a daily basis / on a weekly basis and what happens if your driver fails to meet the agreed return obligations.
The amount to be returned by the driver relies upon the location, the kind of vehicle as well as the vehicle size. For instance, an entrepreneur in Lagos operating commercial transport service who employs a professional driver is expected to bring back far less return from his driver than a counterpart who is operating in Ebonyi state. You should also fail to forget that the professional driver must be well familiarized with the functionality of the vehicle engine he is going to drive and similar vehicle peripherals, this is very crucial so that the driver will be aware of the happenings and he can be able to drive the vehicle to the mechanic workshop if the unexpected happens ( like vehicle break down).
6. Grow and advertise your transportation business
Input your profit back into your business and use it to purchase more vehicles. It is only by good management practices of your resources and a hard working spirit in your transport business that you will be able to become successful as you never imagined. You should also consider taking options of extending into inter state transport business in Nigeria.
Cost of Beginning Intra-state Transportation Business in Nigeria
There are a wide variety of options you must consider before calculating the amount of beginning an intra-state transportation business in Nigeria. Beginning with the level of experience, with a good startup capital , you can begin with costs within the range of N 2,000,000 and N5, 000,000. If you are going for tri-cycling business or Okada business, they are not the same as commercial bus business. The capital investment estimate and the regular vehicle maintenance as well as the running costs is greater when compared to tri-cycling business, however the day to day return on investment is also different.
Nothing in this planet earth is easy to handle, not even beginning a transportation business, especially when you are planning to be successful and when you wish to expand in a high pace. Be prudent and careful: make sure to prevent the problems with the police by getting the correct vehicle license, make sure to renew it together with the insurance certificate and you should ensure to renew other dues and levies when these certificates are due. Also do well to prevent the problems of LASMA including other transport unions including the Area Boys. You are to make sure that you register the vehicle with the licensing authority, get a vehicle insurance and make sure to prepare other necessary documentation that are needed when you want to operate in your location with no hindrance.
Frequently Asked Questions
Is transportation profitable in Nigeria?
Yes! the Nigerian transportation industry is in the list of the most profitable industry of the economy. This has been attributed to the high population of the country and the need to migrate people and goods around.
Why is the transportation industry profitable in Nigeria?
The reason why the business is lucrative in Nigeria is that the business meets a need (need to migrate people and goods around)