How to Start Transportation Business in Nigeria

There was a time when traveling to the Eastern Nigeria used to be a journey to remember. Those days of brand new, high speeding Marcopolo Luxury Buses! Sitting in those buses while cruising the Ore-Benin road used to be like a dream come true to many travelers. It used to be almost the same as taking a flight; the sheer beauty, the comfort and luxury is considered as second to none.

In those days, traveling with luxurious buses was like Christmas. You would have so much fun traveling that you wish to travel again and again. Whenever the coach made a stopover at filling stations, you see well dressed passengers coming out of the buses crunching bottles of Eva water, looking as if they just alighted from Emirates A360 jetliner.

With the pleasure and comfort it offers, you don’t care how much you pay. Everyone else in every other parts of the country had no choice but to either respect the Igbo travelers or envy them because of their mode of transportation and the plenty ‘Swagger’ it carries. Gradually, the buses began to die off and what used to be “The Pride of the East” now turned to “The Disgrace of the East”.

What Happened to The Beautiful Buses?

Is it that the transport business is no longer profitable? Some, especially the operators would want to blame it on bad roads and high cost of fuel and diesel. They would want you to believe that the cost of running the business far outweigh the profit. That the buses costs a lot of money to acquire. These are valid reasons but in business sense, no reason is valid enough to get a viable business grounded.

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Granted, the Marcopolo bus cost about N80 Million which is quite a lot of money to buy a bus considering the condition of Nigerian roads. Prices of some classes and chassis of Marcopolo even goes as high as a hundred and twenty million. Below is the average price I am able to get.

The Price Factor

Prices of the bus and the general road condition may probably be one of the reasons for it’s dead. But the truth is that the transport business is still very profitable, far more profitable than the average businesses in Nigeria. So, I don’t believe that the price is what killed the fleets.

Bad Management Factor

What killed those luxury buses is the same thing that kills everything in Nigeria – bad managements, poor maintenance culture, and greed. At a point in time, these transporters began to exploit their passengers. Instead of rendering consistent good and quality services that guarantees sustained patronage, they resorted to taking advantage of their passengers.

First, they would adjust the seats and add extra line of seats, making it highly uncomfortable for the average legs, let alone the tall ones. They would have you pay for a comfort ride only to over load the coach with traders consignment of goods just to make more and more money while their passengers are left to suffer for it without qualm nor care about the complains.

Traveling with the Marcopolo buses becomes sources of disappointment and regrets. You take the bus only if you wants to sleep on the road or get to your destination too late at dead night.

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Breaking down on the roads becomes their major identity. Some even catch fire on the road or loose control and fall into the rivers and ditches because of very poor maintenance.

They starts discriminating against their own people – brand new buses will be put to Abuja while the old rickety ones goes to the East.

Passengers Started Deserting

Steadily, passengers starts deserting the once loved luxury buses, preferring the smaller better maintained Toyota 14 seater buses. And the small buses simply took over and doesn’t seem ready to give up the lead anytime soon. It’s convenient, fast, and offers better customer services in some cases.

Judging from the Luxurious bus transport scenario, it would be easy to conclude that there is no profit running transport business. Some will argue that if transport business is truly profitable, that these Luxurious buses should still be in service and going stronger.

Some Who Have Excelled in Transportation Business?

Transport business is still one of the most consistent business in Nigeria anytime. If you really want to make money in bulk and make it fast, one sector you must seriously consider investing into is transport sector. If well managed, this business has what it takes to make anyone a millionaire starting from almost nothing.

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Some have been able to make it big in this business. Though most of them are politicians who have access to government funds. Nevertheless, following their footsteps in transport business management certainly will help you excel in the business.

ABC Transport

Probably the only transport company in Nigeria that have gone public. ABC Transport PLC has taken transport management to the next level and is widely regarded as the best transport company in Nigeria, raking millions of naira on daily bases from their operation throughout Nigeria and West Africa.

ABC Transport is said to provides friendly and reliable services to the Eastern, Western, and Northern parts of Nigeria, as well as to the West African sub-region, from Lagos (Nigeria) to Accra (Ghana) through Benin Republic, and Togo. Though many people may not quite agree with that but judging by the standard of other transport companies, we can say that ABC really standout.

CHISCO Transport

This is one transport company that have maintained some level of sanity is a sector that is marred with low reputation and miscreants. They ensures that touts are kept away from their parks and their vehicles are well maintained. CHISCO has been in business for years and is reputed to be one of the biggest transport company in Africa, making millions of naira daily.

According to one of the customer’s review – “Traveling with Chisco is not just traveling but traveling in comfort. The vehicles are always serviced before leaving the park, the drivers are always cautious. But their vehicle is slow and their park looks so unkept.”

G. Agofure Motors

I traveled to Warri Delta state through public transport sometimes ago. The bus I entered belongs to G.U.O Agofure Moter. At their head office in Warri, I notice how profitable a transport business could be if properly managed. The bus station there is the best I have ever seen anywhere in Nigeria. Well arranged passengers departure hall equipped with large screen TVs with DSTV for all round customers entertainment. So comfortable that some passengers who wants to travel very early used to move in and sleep there.

Everything is done in order and according to plan and the result is influx of customers. It is probably the busiest transport station anywhere in Nigeria despite that they charges higher than other buses. Good management is no doubt the lifeblood of any business and that is demonstrated with the Agofure motors.

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You can see that transportation business in Nigeria is viable and can not be saturated no matter the number of vehicle on the road. There will always be huge demand for means of movement in every city and villages in the country. The only thing that is capable of taking you out of business sooner than you started is lack of proper management. G. Agofure Motors is believed to make about N10 Million naira daily.

How to Start Small and Grow Big?

From the above examples of successful transport companies in Nigeria, you know there is big money in transport business. But how can someone with little means still enter transport business and make it? You don’t have to go for a big coaches such as Marcopolo Paradiso 1800 DD that cost nearly N150,000,000. A Tokumbo Toyota bus or smaller sedan is just enough for you to start.

1. Buy a Tokumbo Bus

A fine tokumbo bus with AC cost about 1.8 million – N2.5 million. That’s the type you’d need if you intend to run far distance Lagos – East. Be sure to get a very clean one as passengers judge the condition of your vehicle and the quality of your service base on the look of your vehicle.

2. Register with the Unions

Except you wants to operate as a registered limited liability company, you may not be allowed to operate properly as individual transporter if you did not register with the transport unions.

3. Get a Qualified Driver

I recommend that you drive it yourself, that is the best way to start. Driving your vehicle yourself when you have only one ensures the highest return on investment. But if you can drive it yourself, get a very good and experience driver who understands the road to drive it while you monitor him.

Profit Potential in Transportation Business

Minimum transport fare from Lagos to East is N2,500 it can be as high as N5,000 sometimes. A 14 Seater bus with full load to East would be making N2,500 x 14 = N35,000. Put out N15,000 for fuel and other expenses, you’d be left with N20,000 daily.

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On a smooth month that nothing hinders your services, you would be making the minimum profit of N20,000 x 25 = N500,000. With this calculation you find out that it will take you just five months to get another bus.