Without any doubt, transportation business in Nigeria is very profitable simply because of its large population. Nigeria has the largest population in Africa and ranks the sixth in the world.
With well over 180 million citizens, it boasts of enormous human resources, transportation business is capable of making you six figures on a weekly basis after maintenance cost.
Apart from the government workforce, one of the largest networks in the country is transportation. People and goods in various locations move from places to places, either through air, water, roads or rails.
But today I’ll be talking about road transportation, commercial vehicles to be precise and how to make money from it on a daily basis.
6 Simple Steps in Starting a Transportation Business in Nigeria
Step #1: Determine which mean of road transportation you want to invest in.
The major types of transportation we have in Nigeria are the motorbikes, tricycles, shuttles, interstate buses, and cross-country buses.
The motorbikes and tricycles are the cheapest to invest in as you can start either with as low as N300,000. Shuttles are intrastate minibuses and cost is about N400,000, while the interstate and cross-country buses cost from about N2,000,000 to N5,000,000 depending on your choice of vehicle.
Step #2: Registration with the National Union of Road Transport Workers.
That is if you opt for the intra, inter or cross-country commercial transportation.
Obtain your driver’s license, it is essential, then register the vehicle with the appropriate body and get a plate number, that is when you be eligible to put the vehicle on the road. Same applies to motorcycles and tricycles . A rough estimate of the costs of these requirements is N75,000.
Step #3: The next step is in planning the routes.
You need to decide if you want to venture in intrastate transport (that is, within a state, from town to town, or city to another city within the same state) or interstate transport (that is, from Lagos to Port Harcourt, Akure to Abuja, etc), cross-country (that is, from one end of the country to another end, for example, Sokoto to Portharcout).
These are journeys that take few minutes to several hours and sometimes days. This is why you need to put this option into consideration even before buying your transport vehicle.
After knowing the routes, plant your vehicle in a suitable terminal or garage as popularly called.
Step #4: Number of trips.
Also, it is important to determine the number of trips you want your vehicle to make per day, to maximize profits.
The lowest number is 2 if you are doing interstate because when your vehicle carries passengers to another destination, it has to come back, which means it will also carry passengers back.
By the way, the number of trips solely depends on how far the primary destination is. For intrastate, a vehicle can go as much as 8 trips or more, interstate is quite lower because of the longer distance.
If it’s a journey that takes about 2-3 hours, 4 trips are possible, but longer, 2 trips. Cross-country is different, due to its length of time, a vehicle can make a trip in a day, or a trip in two days.
Step #5: Know the profits.
One thing for sure is the longer the distance, the more the fee a passenger pays for the trip.
A typical example is of an 18-seater bus, moving from Akure – Lagos, fee per passenger costs about N1700 (as at the time of writing this article) in the garage, that makes it 1700 * 18 = N30,600.
A liter of petrol costs N145, a trip won’t cost less than 40 liters of petrol, which is = N5,800.
N30,600-5800 = 24,800.
This means the vehicle above makes N24,800 per trip.
Now calculate 2 trips per day which is N49,600.
A cross-country vehicle makes more than that, more passengers, higher cost and so on.
Step #6: Know the risks.
Transportation business requires trust from all parties involved. From the driver to the passengers, and other agents.
Also, the vehicle may likely break down at any time which will incur extra costs, but normally, maintenance is required. Most Nigeria roads are averagely not in good condition and there are problems from security agents and also accident risks. These are all normal challenges all road users face from day to day.
All in all, first thing to do before starting the transportation business in Nigeria is to come up with a business plan.
So, how do you come up with your business plan? You start with understanding what type of transport service you want to offer. What is the size of the market in need of the service? You need to study your environment including transportation in and out of your region.
You should also estimate how much profit you expect to make per week. What you will need to provide the services to people and how you can do it in a better way. How many vehicles to start with? Also, you need to think of how you can get a trustworthy driver because this rest in the success of this business.
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