How to start a successful transportation business in Nigeria – MakeMoney.ng

Transportation business in Nigeria is still growing with the increase in population which is estimated at about 180,000 million as at 2018.  Going into transport business in Nigeria is a viable proposition since the market is there for you and beside, those in the business already are racking handsome  profit.
What makes the business economically viable is that the demand by commercial bus users surpass the supply.  Even car owners use commercial transport so it is safe to say that up to 70% if the Nigerian population use public transport.
Before I go into how to start a transportation business, I will first of all show you the types of transportation business in Nigeria today.  They are many and varied and different entrepreneurs choose different types of transportation business because of their interest and experience.
1. Motor cycling (Okada):  This is the use of motor cycle  to carry passengers within a town, city and villages.  Motor bike, popularly known as okada is used to carry one or two passengers at a time, though some states discourage carrying two passengers.  But the days of using motor cycle  as a means of transportation is numbered since some states have banned the use of “okada” as a means of transport, particularly in the cities, other states are likely to follow suit in due course.
2. Tri-cycling (keke napep):  This is an improvement to motor cycle and officially meant to carry three passengers, some drivers carry four passengers, even others in some states carry five passengers. Keke napep is in vogue and it is  likely to be used as a means of transportation in the foreseeable future.  Some state government have proposed replacing motor cycle with keke napep.
3. Commercial luxury bus  and mini-bus : These are used for both town  and inter-city services to carry passengers.  Workers that commute to work or others travelling outside the state use this means.
4. Car town service (taxi): This is also used to convey passengers within and out of the state.  It is a more secure  means of transport than the unregistered and unpainted  “kabu-kabu” because each owner registers the car with the state government agency .  There is also another form of car service known as “kabu-kabu”, also used to carry passenger but for a short distance journey.
5. Haulage transport service: This is the use of different types of automobile to carry goods for a charge.  Different types of vehicles include, tanker, trailer, tipper, etc. are used to convey different kinds of  goods.
6. Offer hire purchase services:  This type of business is spreading to all the states of the federation. It is a new way to transportation business in which you get regular income, more or less, it is a guaranteed income.  It works in this way:  you buy whatever type of would be commercial vehicle at a particular price and hire them out to different type of drivers at higher prices.  The driver will pay for the price agreed installmentally.   For example, an entrepreneur buys ten tri-cycle at ₦500,000 each and hire each one out at ₦700,000 each with ten months instalment of ₦70,000 each month, after which the hirer becomes the owner.  So with the instalment payment of ₦70,000 per month, the total amount payable at the end of the 10th month is ₦700,000.  Assuming the entrepreneur received all the instalments, he makes ₦200,000 from each of the tri-cycle.  It is a cool business, is it not?
7. Other classes of transportation business such as the use of aircraft, train, ship or canoe and pipeline are outside the purview of this article. Since the article is designed for an average Nigerian  who want to be an entrepreneur as a transporter.
To make a headway and be highly successful  in transportation business in Nigeria,  you must be aware of the following:
Here is a  breakdown of how to start a successful transport business, concentrating more on commercial buses.
Below are the steps in details:
If it is tri-cycling business or Okada business, they are slightly different from commercial bus business. The capital investment and the regular vehicle maintenance and running costs is much higher than tri-cycling business, however the daily return is also different.
Do your research properly to make sure your location is best suited for the transportation business you want to operate in terms of the financial demands of the Area Boys and the State Government.. I would recommend that you start small and acquire good experience before you grow big.
You must register the vehicle with the licensing authority, obtain vehicle insurance and other necessary documentation that will enable you to operate in your location without hindrance.  You must also belong to the National Association of Road   Transport Workers.
My advice at this stage is that you should be the professional driver to drive your first commercial bus or tri-cycle since at this stage you have one vehicle, you will manage it more prudently than the best driver.
So you make  sure you have a driving licence and be a member of the transport union.  If you drive a commercial vehicle for a year, you are no longer a stranger in the transportation business and you stand to gain so much when eventually you buy your second vehicle and then engage a professional driver.
If you have other businesses you are running, engage a professional driver and negotiate favourable memorandum of understanding between you and your driver. These may include: the return the driver must deliver every day/week and what happens if the driver does not meet the agreed return obligations.
The amount agreed with the driver is sometimes dependent upon the location, type of vehicle as well as size of vehicle. For example, an entrepreneur in Ibadan operating commercial transport service and using a professional driver would demand far less return from his driver than his counterpart operating in Lagos state.
Don’t forget that the professional driver must be familiar with the vehicle engine he is going to drive and other vehicle peripherals, this is necessary so that the driver will always be able to drive the vehicle to the mechanic workshop whenever the unexpected happens, i.e. vehicle break down.
Plough back your profit to your business and buy more vehicles.  It is only by prudent management of your resources and hard work of your transport business that you become successful.  You should also consider option of inter state transport business in Nigeria.
Nothing in this world is easy to handle, not even transportation business, especially when you want to be successful and expand quickly.  Be prudent and careful: avoid the problems with the police by obtaining the right vehicle license, renew it together with the insurance certificate and other dues and levies when they are due.  Also avoid the problems of LASMA and other transport unions and possibly the Area Boys.
This a a basic business plan for transportation business in Nigeria. You should do your feasibility study on transportation business in Nigeria depending on the area you want to operate, then had with this knowledge here. Good luck.
If you are looking for other ideas, check out our page: Business ideas
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Chris Okafor
Chief Chris Okafor is a marketing consultant and CEO of C. J. Marketing Academy, providing training services to the industry and educational services to the profession.
He produces study materials for the students studying for the National Institute of Marketing of Nigeria (NIMN) examinations.
He also provides tutorial services for students writing the NIMN examinations
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Good post.
Keep sharing with us.
Thank you for sharing your ideas with me. I want to start with okada in a small estate. 1> I can’t drive okada 2>i don’t who to trust with the okada so how do I proceed?
i love this ideas are real because their are no longer jobs in this country any more you emply ur self and pay your self
Comm Road transport in Naija s still so untapped.
Thank you
Thank you so much God bless you, we really appreciate your article, it is really nice. Thanks
Thank you so much for this article, all that you explained is very clear. I have been looking for who to buy me mini bus, Toyota Sienna or Hiace bus for hire purchase.
Anyone who has an interest should contact me on: [removed]
Which part of NGN are you?
[removed]
Hi David, I don’t know where we can connect, but.. search my name on Facebook.
Or send me a mail.
Big thanks to you, for giving me clear direction
I love this. I intend to start a transportation business. I am still doing my feasibility studies on it. This write up has helped me alot.
Thank you.
We are glad you found it resourceful
Thank you very much for this article here
I also want to engage in the transportation business with mini buses, about 2 or 3 clean mini buses which cost about 1.6 million – 1.8 million
If I can have someone to loan me such amount or even the buses, I will pay back in full in 2-3years time
My location: Calabar Nigeria
Nice one bro, thank you.
This was very helpful. Thank you very much
It is a good business. This is what I have been doing for a year, buying tricycles and okada and give it out on installment. It depends on your area. Someone like me, I am doing this business on a Lagos border to Ogun state which accommodates my style because most thing can’t be used in Lagos city, like okada. So I decided to do it here. Presently we are buying Piagio Keke 770 with plate number for 790k. I will give it out 1.3m and most are paying my money. Okada that I buy yesterday is 300k, I give it out 460k. Why God help me is I find all means to join the union and some association so it helps me a lot and you need to know the police in case they issue with your transport. You only need to call them on phone and as a Naija guy, you do the normal for them later. Manage this and don’t mind my grammatical error. Thanks, you can contact me for the idea.
your contact sir
Great contribution sir Adeoye.
I am motivated to start again.
The person I gave my bike disappointed me.
I will try again.
Thank you very much for the article, I have a business idea of mini bus transportation which I envision it will be lucrative. But the capital is my headache. I cannot afford even single one. Can you please link me up with somebody or company that can agree to listen to my idea. Thank you and God bless.
Thanks for your great lectures here
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