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How To Start A Haulage Business In Nigeria
Haulage business simply involves transporting heavy loads from one place to another, using trucks and other heavy-duty vehicles. And it’s one of the most lucrative businesses in Nigeria. However, starting the business requires huge startup capital.
If you can afford the startup costs and are looking to start your own haulage business, then this post is for you, as it discusses the basics you need to know about the haulage business in Nigeria.
Below are guidelines for starting a successful haulage business in Nigeria.
1. Understand the opportunities for haulage in Nigeria
- Think of the following situations:
- A family or a business is relocating
- Someone is at the furniture maker’s to collect a new set of furniture
- Someone is taking delivery of metal gates and doors from a welder’s and he needs to move them to his building site
- A group of traders from small towns and villages have come to a city market to purchase wares which they need to move to the hinterland
- Some retailers from within the city are at a major wholesale market to buy wares to move into their various shops in the city
- Some building materials have just been bought and they need to be moved to a building site
- Large quantities of stone crushed at the quarry are waiting for evacuation to construction sites
- A manufacturer turns out large volumes of products daily and needs to move the products to wholesalers across the country
- Loads of imported goods come into the country through the sea ports and they need to be moved to warehouses across the country
- Loads of goods are to be exported from the country and they need to be moved to the ports from different parts of the country
- Petroleum products — petrol, diesel, kerosene, gas — are required daily by individuals and businesses in all nooks and crannies of the country and the products have to be moved in varying quantities to retailers or big end-users
- Various shades of manufactures require different raw materials to be moved to them from different parts of the country
- Farm produce of industrial significance like maize and those of consumption significance like rice, tomatoes, yams have to be transported from the various farming communities to urban locations where they will be consumed
- Livestock has to be moved from the rearing communities to locations across the country
- Fertilizer and Livestock Feed need to be moved to the farms from the cities
How To Start A Haulage Business In Nigeria
Each of the above situations occurs in its thousands every minute all over the country — you only need to take a look around you to see them happen; and the common denominator for each of them is haulage — movement of goods from one location to another.
Billions of tons of goods are transported across the country every year to be able to connect manufactured (locally and imported) and cultivated goods to wholesalers, retailers and consumers, and to get raw materials to factories.
2. Discern the possible scales of the haulage business
Huge as the volume of goods hauled across the country is, the sizes in which they are moved greatly varies depending on distance as well as who and what is involved.
So, the requirement for haulage can range from a delivery tricycle to a panel van, a pick up van, a light truck, a delivery van, a tipper, a trailer, a low loader up to a crane. Each of these vehicles can be employed in numbers from one to a thousand. Financial requirement can also range from a few thousands of Naira to millions of Naira while organizational size required for haulage business will also vary.
3. Choose a niche and size
Goods for haulage can be grouped. Notable groups include, petroleum, quarry, building material, agricultural, manufactured, industrial, and export goods. In each group, haulage can be undertaken on a small or large scale over short or long distances.
There are a number of approaches that can be adopted by an investor in the haulage business, namely:
- Operating as an Independent operator or a haulage company: This entails directly managing your trucks and staff to do haulage business.
- Operating as a contractor or sub-contractor: This involves handing over your truck or trucks — under a contractual arrangement — to a particular client who requires considerable and regular haulage services. The client pays periodically as agreed.
- Leasing your truck to a haulage company: In this case, you lease your truck or trucks to a haulage company. The company uses the trucks to execute its haulage contracts and pays you at agreed rates and intervals.
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For reasons of efficiency, it is advisable for you to take a very close look at the nature and requirement of the different niches and choose one depending on your location, circumstances and passion.
After choosing a niche, determine the scale at which you can operate, considering your financial ability. Make a choice between operating as an independent operator, as a contractor and leasing out trucks to a haulage company.
4. Create a business plan
Your business plan will serve as the guide you will follow in conducting the business. Ensure that what you have put together in the business plan can actually lead to the success of your haulage business. A good business plan will include the following:
- Detailed information about your business — background, description, statutory requirements, opportunities, risks, threats, mitigation to risks and threats
- Business mission, vision and objective
- Business model
- Mode of operation
- Capital requirement
- Cashflow projections
- Plans for finance
- Income and profit expectation
- Marketing — customers, competition, service delivery, advertisement
- Management Practices
5. Execute according to the business plan
Bring the haulage business to life by working through the details set down in the business plan, to implement the following:
- Register your business
- Fulfill regulatory requirements
- Acquire finance
- Acquire trucks and other requirements
- Staff the business
- Source for business
- Deliver service
- Manage your finance
As you run the Business, take particular care of the following critical areas:
- Driver management
- Regulatory permits
- Truck maintenance
- Service Delivery and Customer Management
- Finance Management — costs, credit, cash, debts, revenue
There are many opportunities for investors in the haulage business in Nigeria. With a proper foundation laid in a good business plan and a methodical execution of the plan together with attention to the critical areas listed above, you can surely have a successful haulage venture in Nigeria.