Haulage and logistics business is one of the fastest rising and daily income businesses in Nigeria that the rich have dominated for some time now. Starting a haulage business in Nigeria is one of the best decisions you could ever decide.
In this business guide, you will get an insight into the profitability of the haulage business and how you can set up your own haulage business in Nigeria and make money.
But before we move into the feasibility study on the haulage business let’s quickly understand what the business is all about.
What is Haulage Business?
Haulage can be referred to as the transportation of goods from one part of the country to the other. Haulage services are rendered using vehicles that are capable of lifting much quantity of goods at a time. Such vehicles are tankers, trailers, cranes, tippers, trucks, etc.
Some of the products that can be transported through haulage services are;
- Petroleum products such as Kerosene, Liquefied Natural Gas, Premium Motor Spirit, Engine Oil, Diesel, and any other related petroleum products.
- Consumer goods from the manufacturing companies such as foods and drinks from manufacturing plants are transported and widely distributed through haulage.
- Also, through haulage; it is very easy to transport sand and stones from the dredging sites and quarry sites to the construction sites and used by engineers.
- Building materials such as cement, wood, irons, ceiling boards, corrugated sheets, and every other construction material of these kinds and moved from one place to another through haulage services.
- Containers from the seaport to the final destination or from the destination to the seaport.
Without further ado, let’s get right into starting a profitable haulage business in Nigeria.
How To Start a Profitable Haulage Business in Nigeria
Haulage and logistics business is one of the top 5 most profitable businesses in Nigeria. If you are looking forward to starting a haulage business in Nigeria, consider the following points;
1. Decide on a Niche
From our definition of haulage business, we can understand that haulage involves the transportation of both consumer and industrial goods from one place to another.
The first still you should decide before starting a haulage business is choosing a Niche. Niche here refers to what you will be transporting from one place to another.
You can select from numerous items such as cement, soft drinks, alcoholic drinks, industrial materials and so many others.
Choosing a niche will also help you determine the kind of vehicle you will be needing to carry on with your haulage business. For example, cement is most conveyed using Trucks while bricks are conveyed using Tipper and so on.
There are different vehicles you can choose from for your haulage business and each of them has a defined purpose. These vehicles include;
- 911 trucks
Once you have decided on your niche (what you will be transporting) next is to have a business plan.
2. Get A Business Plan
A Business plan is simply a blueprint or a guide to any business you wish to venture into. The fundamentals of any business plan include; vision, capital, merits, demerits, market and marketing strategy.
In creating a haulage business plan, you will need to list the total capital you need and conduct a financial analysis of everything required for the business.
At this point, you will know if you can afford the cost of starting and running the business. Otherwise, with the business plan, you can pitch your business idea to financiers and investors.
That’s one of the reasons a business plan is very important.
Lastly, if you feel you don’t have the needed capital to run this business alone, you can collaborate with somebody and work as partners in the business or also a source for funding from the government or loans from commercial banks.
3. Start-Up Capital
The Startup capital is the money needed to run the business. Certainly, once you have acquired a business plan you should be able to tell how much you will be needing to run a successful haulage business.
You can decide to start either small-scale or large-scale while you watch the business grow.
Haulage is not a business for people whose income is low, it involves a huge amount of capital to start, and considering the cost of vehicles, you should know how to go about this.
The capital to start a haulage business depends on your niche, while your vehicle also depends on your niche. But notwithstanding you need a capital of about 3.5 million to 40 million which is between a fair use and a new vehicle.
A fairly used van can be 3.5 million, a fairly used truck 6m etc but a new truck will cost about 20 million depending on the brand.
In addition to that, you will b needing money to acquire space for your vehicles and other registration processes.
- Read Also: Cost to Import Cars From Dubai To Nigeria
4. Get A Vehicle
Getting a vehicle for the haulage business should be the next thing you want to do at this stage. Depending on your niche, you can decide to go for either truck, trailer, tipper, van or bus.
For those who may wish to venture into the truck niche haulage business kindly note that when you overload your truck you are likely to kill the engine, a truck with 350 horsepower, and single axles should load not more than 25 tons. But double/tandem can load above 25 tons.
Looking at preference, American trucks are widely preferable. You can go for a sound fairly used or a new one. You can also buy 1 or more of these trucks as it all depends on your budget for the business.
5. Mode of Operation
The Mode of operation is an important factor needed in any haulage business. We have the following mode of operation in the haulage business.
Independent involves owning and driving the vehicle yourself.
As a contractor mode of operation, you are contracted by oil and gas companies, food and agricultural company, manufacturing companies etc. You will be receiving money at the end of every week or month depending on the agreement. Also, maintenance of the vehicles and drivers allowance is handled by the company.
Lastly, Leasing on the last part involves leasing our vehicles and collecting payments in return.
6. Register Your Business
Did you know that registering your business in Nigeria is the first step towards protecting your business for growth?. How would you start a haulage business that is worth millions and not register it with CAC?.
Once you are able to register your haulage business with Corporate Affairs Commission, you can enjoy the following benefits;
- Your company liability is secured
- You will be able to operate with a unique company name
- It gives you the privilege to open a corporate bank account in Nigeria.
- Government grants and loans are made so easy when your business is registered and certified.
Before registering your business/company you should decide on a unique name for your haulage business that will stand out from the rest.
Once you have a unique name for your business, the next is to get an expert that will give you a seamless CAC registration.
@ Legacy Benjamin Consult; we can get your Haulage company or any other business/company registered with CAC. Connect with us on WhatsApp 08066108299
7. Obtain Relevant Documents
Having CAC is not enough. Certainly, you will be paying Tax so you need to obtain Tax Identification Number from FIRS office (Though in most cases, after a successful CAC company registration, your certificate could come with TIN).
You also need to have other important documents such as a driver’s license and also get your truck recognized by the government so you will not have issues with the road safety commission.
8. Employ Drivers
If you are running an independent mode of operation you will need to hire drivers to do the job for you. haulage business is not for the weak and so, you need drivers who are skilled and professional in the field.
You should get drivers who are not into drinking as this could lead to accidents on the highway and could result in loss of lives and property.
Also, be sure your drivers can be trustworthy and attest to loyalty before handling such as big job to them. Lastly, drinking and hard drugs shouldn’t be a part of your driving.
9. Employ Credible Staff
The haulage business does not begin and end on the road. You also need a credible manager and even a secretary to keep track of what is going on in the business.
These staff must have a good command of English and be able to communicate effectively when called upon.
10. Advertise Your Brand
Nobody knows a silent expert, if you are good at something you need to let people know. Likewise, you have to protect your company and make people discover and reach you.
Nowadays, the advent of social media has made it so easy for people to reach out to clients through advertisements such as sponsored videos, pictures and writeups.
How Profitable is Haulage Business in Nigeria?
Before looking deep into the profitability of the haulage business, understand that the Transport business, in general, is one of the top 10 most lucrative businesses in Nigeria after Agriculture and Health.
The haulage business itself has proven to be an oil money business with so much profit that you could get back your capital in less than one year going into the business.
people depend so much on company food/drinks products e.g. soft drinks, alcoholic beverages and other products such as cement, building materials, and petroleum are indispensable due to their increasing need for it on a daily basis.
Even if you are distributing beer across the country, you can still make a lot of money from the haulage business, one thing is certain; Nigerians will always crave to drink more.
Assuming your truck moves from Lagos to Kano and the charge is 300k, you will spend 160k on fuel expenses while 140k will be your take-home profit.
- Read Also: Business With 30k Capital in Nigeria
Truck Owner Income in Nigeria
Truck owners make the most money from the haulage business. One trip is enough to earn a truck owner up to 200k profit in just a few days.
Feasibility Study On Haulage Business
From our feasibility study on the haulage business. we discovered the following challenges limiting the effective running of haulage and logistics business in Nigeria.
1. Bad Roads
We all know the situation in Nigeria as regards bad roads. Vehicles sued for haulage business are heavily impacted by these bad roads and in most cases, it results in the high cost of maintaining these vehicles to keep them in shape and good working conditions.
2. Driver’s Reckless Habits
You would hardly find a driver who does not drink alcohol. Drinking and driving have been one of the major problems facing Nigeria in the public transport sector.
Again, it is usually very difficult to find a driver who will be loyal to you as most drivers tend to cheat on the slightest opportunity possible.
3. High Cost of Fueling
The Nigerian economy is moving from bad to worse and this has projected the price for a litre of fuel like an arrow heading in a projectile motion straight into the sky but no hope of coming down.
These days, transport from Lagos to Port Harcourt will cost about ₦150,000 worth of diesel to and fro. When you subtract that from the amount you charge, you find out that most of the money goes to fueling alone.
You will discover yourself in a melancholy situation of charging much and earning little.
Getting a good mechanic is another impeding factor. You will stand a chance to lose money anytime your truck or vehicle breaks down as most drivers will capitalize on this opportunity to extort money from you.
And in most cases, trucks may break down in a far bus where getting a mechanic will not be easy.
One useful tip in preventing your truck from breaking down often is the application of grease.
The weather could also impact the movement of goods, rainy seasons will slow down the movement of vehicles while some products and goods and favourable under harsh weather conditions.
Conclusion: How To Start a Lucrative Haulage Business in Nigeria
In conclusion, the haulage business is one of the most lucrative transport businesses in Nigeria. If you are looking forward to getting a vehicle to start a haulage business, you should consider this piece of writing relevant.
Nevertheless, if you have questions, recommendations or suggestions regarding haulage and logistics business in Nigeria do let us know in the comments.
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