Transport business in Nigeria – how to start and expand
Do you look forward to starting your own transportation business in Nigeria or to expand an already existing one? then this post which is intended not just to provide you with vital pieces of information on how you can start or expand your viable transport business in Nigeria but also how to make the most out of the transportation industry using some vital tips, is the best guide you’ve been waiting for.
The process which an entrepreneur undertakes to earn his money by starting, organizing, providing and rendering the services of transporting people, goods, animals, crops, clothings, raw materials etc from one location to another is referred to as transportation business.
Inter state transport business in Nigeria
Transportation business in Nigeria is and has always been very profitable owing to the fact that thousands of people travel around the country on a daily basis.
That’s actually on a normal day, festive seasons like Christmas and the likes tend to attract more movement of people. Thus, those seasons are unarguably characterized with massive transportation of people from one part of the country to the other.
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The demand by commercial bus users in the country surpasses the corresponding supply and contributes to the economic viability of this business opportunity. From time to time, even car owners tend to use commercial transport system due to one reason or the other, so we can safely state that about 70% of the Nigerian population utilizes public transport.
It is worthy of note that transportation business in Nigeria is still growing, especially with the increase in the country’s population. Thus, there’s enough room for you in the transport industry to tap from the enormous wealth flowing from same. More so, venturing into inter state transport business in Nigeria is a viable business proposition since there is a large market audience already in existence.
Types of transportation business
Before we dive into how to start a transportation business in Nigeria, it is noteworthy that there are varied types of transportation business existing in Nigeria today. Thus, different entrepreneurs tend to choose from the many and varying different types of transport business usually based on their interest and experience.
In Nigeria, we have three (3) major means of transportation viz; Land, water and Air. However, less than 10% of the Nigerian population travel by water and air, so the majority of the Nigerian populace travel by land.
Thus, this article will focus on the means of transportation by land. The under listed types of transportation business are therefore means of transportation on land.
1.) Motor cycling (Okada, Achaba) :
This means of transportation business entails the use of motor cycle to carry passengers within a given town, city or village. Motor bike, popularly referred to as okada/ achaba is used to carry one or two passengers at a given time, though some states discourage carrying two passengers.
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Okada riding as a means of transportation business has met its end in many states in Nigeria following a ban by those states especially in the big state capitals and cities.
2.) Tri-cycling (keke napep) :
This happens to be an improvement to motor cycle and strategically designed to carry three passengers comfortably, though some drivers carry about four and more passengers. Most state government in Nigeria have proposed the use of this tricycle in place of motorcycle. Thus, keke napep is currently in vogue and its continued use as a means of transportation even in the nearest future is foreseen due to its general acceptability.
3.) Car Town Service (Taxi) :
This entails the use of cars to convey passengers either within or outside the given state. There is another form of car town service used to convey passengers though for shorter distances, popularly called “kabu-kabu”.
However, taxi as a car town service is more safe and secure as a means of transportation because each owner registers with the relevant state government agency as such unlike the unpainted Kabu kabu that’s as well unregistered.
4.) Commercial Luxury Bus and Mini-Bus :
Transport business owners utilize this means for both town and inter-state transport services to carry passengers. Also, workers that commute to work, students headig to school as well as all other itinerant passengers moving outside a given state utilizes this means.
5.) Haulage Transport Service :
This involves the use of different types of automobile machines to carry goods from one point to another for a fee. The varying types of vehicles that can be utilized here includes but not limited to ; tipper, van, tanker, trailer etc they serve varying purposes and are used to convey different kinds of goods.
6.) Hire Purchase Transport Services :
This is actually a new method of transportation business that is fast spreading. This method guarantees a regular income at intervals based on the agreement between the parties involved.
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It simply entails buying a commercial vehicle at a given price which you would in turn hire out to different drivers at higher prices which would be paid in instalments, after which the hirer becomes the owner.
How profitable is transportation business in Nigeria?
The question of how profitable the business of transportation is in Nigeria can be answered by looking at “the need for transportation in Nigeria”. Now,, the need for transportation in Nigeria and world over is very high and can never be over emphasized. So much so that millions of people travel in Nigeria on a weekly basis for varying reasons ranging from business, school, work, visitations and conferences etc.
More so, the high need for transportation is actually increasing with the rise in population and as such, affords you the opportunity for greater profits. As at the year 2015, only about 5 million vehicles were registered (legally recognized) in 3 years according to a statistics by the FRSC. You may think 5 million vehicles are much, but take a minute to compare that number to our population in Nigeria which is about 180 Million (2015).
The business of transportation also thrives well in a busy city and guarantees much more profits.
How do I start a transportation business?
The breakdown of how to start a viable transportation business in Nigeria is discussed below :
• Decide on the type of transportation business :
The first notable step to starting a profitable transport business is to decide on the type of transportation business to embark on, but have it in mind that ideas don’t come out fully formed.
Do bear it in mind that the capital investment, regular vehicle maintenance and running costs of the different types of transportation business in Nigeria are as well different, same goes for the daily returns in profit.
• Choose location and routes :
Undertake a proper research to ensure that your chosen location is well suited for the transportation business you’ve chosen to embark on in terms of the financial demands of the state government and area boys. It is recommended that you start small, garner the good experience then grow it over time.
• Buy or obtain a vehicle through hire purchase or lease :
Once you have a vehicle and you’re ready to start your transport business, it is highly recommended that you register the vehicle with the relevant licensing authority.
More so, obtain a vehicle insurance and other necessary and vital documentation that will enable you to operate in your chosen location without the usual hassle.
You must also be a member of the National Association of Road Transport Workers, viz;
• 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)
• Driving it yourself :
For you to undertake the driving by yourself, ensure you have a driving license and you are a member of the transport union. If you plough the roads as a commercial driver for about a year, then you are no longer a novice in the transportation business and you stand a good chance to cash in on your experience and expand your business by adding more vehicles over time.
• Employing a professional driver :
You may decide to engage a professional driver negotiate a favorable memorandum of understanding which would include the returns which the driver must deliver either on a daily or weekly basis and what happens when the driver fails to meet up with the agreement.
Some factors such as the location, type of vehicle as well as the size of the vehicle usually determines the amount to be agreed upon with the driver. Thus, an entrepreneur in Ebonyi operating commercial transport service and using a professional driver would be charge a lot lesser than his counterpart operating in Lagos, Nigeria.
It is recommended that you engage the services of a professional driver who is familiar with the vehicle engine he iis going to drive and as well, other vehicle peripherals. this is very necessary so that the driver will always be able to drive the vehicle to a mechanic workshop whenever there is a vehicle break down.
• Grow your transport business :
It is worthy of note that you will become successful in the transport industry by prudent management of your resources and hard work of the said transport business. It is recommended that you plough back your profit into the business and expand same by acquiring more fleets. You could as well consider the option of running an interstate transport business in Nigeria.
The journey to becoming a successful transport business owner begins with a step. Having properly studied this guide, we advise that you get started. Reading this post is one step, acting on same is another.
It may not be an easy ride but its worth the hassle. We advise that you take the right steps by obtaining the the right vehicle license, renew same when due with other vital documents such as insurance certificate and pay levies and dues as they become due. These would enable you overcome certain hitches in the transport industry.
So, good luck as you go all out and do the needful, you will be glad you did.