I saw a DANGOTE (Nigerian conglomerate owned by Africa's richest man, Alhaji Aliko Dangote) advert recently, and it occurred to me that all his business interests focus mainly on the basic things every household needs. Indeed, there are many things we tend to need and want in life, some tangible others not necessarily tangible, but it is difficult to see how a business dealing in daily household items can fail, even in a highly competitive environment, especially when the business routinely innovates and reinvents itself. It is why names like Nestle have been with us like forever.

Some literature I read a while ago about starting a small business advised startups to focus on little things that matter to everyone in their day to day life. Whether the business is into the provision of goods or services, they should be such that can thrive even during wars and natural disasters, besides the good times. It should be good enough not to be affected drastically by economic uncertainties or change in government policy. Not many businesses can easily fit into this category, by meeting the requirements I have stated, barring unforeseen circumstances that may cause the business to implode without external stimuli, like mismanagement of capital and proceeds by business owners amongst others.

When people ask me why I focus so much on the Transport sector, it is because it satisfies to a large extent many of the requirements a small business needs to grow. As I have always maintained, going into the HIRE PURCHASE aspect of it, frees the entrepreneur from strict monitoring, such that one can still pursue a regular nine to five while building the business on the side, either as a business to expand upon or as foundation to raise funds for something more capital intensive that one may retire into much later in the future.

Since my foray into the transport sector, I have outlined the businesses and challenges inherent in starting up a hire purchase business in the three wheelers (popularly known as Keke in this part of the world) to the minibuses. I intentionally ignored talking about moped taxis, or motorbikes for transport purposes because of the safety issues associated with them. It is important to diversify that small business of yours, even in the same sector such that if an unfavorable climate visits an arm of it, the little "conglomerate" you must've built will not totally collapse, as the other arms continue to hold up. Therefore, if your transport business conveyed humans only, you may consider going into the part of transport that involves the movement of goods i.e. Haulage.

Interestingly, my last entry for the Entrepreneurship Series was on raising funds by exploring the Crowdfunding option, at a time access to loans via official means had become herculean and via loan sharks, suicidal. There definitely must come a time when banks will become an option especially in funding bigger business dreams but crowdfunding becomes viable when one wants to move a step further away from the self funding (dealt with earlier on in the series) that had carried one thus far, and financiers can easily see what you have so far achieved by your own financial efforts.

I just noticed that I have already nudged up paragraphs without even touching on the subject I intended to, though it is pertinent that I put the above out before going into the core, so I will do just an introduction here before moving on to the meat of the matter in a subsequent post. I had stated earlier, that if you had followed the journey as outlined in earlier instalments of the Transportation Business, you will find that it involved conveying people only, and it will be wise to diversify into the business of moving goods as well.

HAULAGE BUSINESS in Nigeria is a very lucrative business. You need to open your eyes to it to know and see how huge that sector is, and how yet very unsaturated it remains. A simple survey of the vehicles you see on the roads should give you a hint as to how large the space for Haulage Business in Nigeria is and remains for time to come. I reckon that it is as wide as the skies are, and with the operators as the birds in the sky without any of them knocking wings against each other. As you have birds of different sizes in the skies, so you have different levels at which one can enter the business. From the wheelbarrow, to the tricycles, to cars (especially the Volvo 740 series) to minibuses and buses converted for haulage purposes, to haulage vans (small,medium and large), and then to the trucks also of varying sizes. All of these are adequately catered for in the haulage business, intra- and interstate, and even across borders by road, within West Africa and beyond.

For the niche I minister to, a starting point will be the procurement of a haulage van, much like the size of passenger buses but with HIGH ROOFS without windows. You will see many of these vans for sale as "second hand" along the major roads, either imported or already used here in Nigeria. It costs a whole lot more to buy a new one, but if one can afford it, why not?

Did you just ask or wonder where the market (the good to be transported) is? I'd say everywhere, from friends that will need their goods moved, to firms you or a friend know that need to move things etc, on a personal level, beyond that there are groups that the operator can join and have goods allocated to him/her to be moved intra- or interstate, sometimes with an escort to ensure that the goods get to their destination. Your role will be that of an enabler, to provide funds for the purchase of the van and let it out for Hire Purchase for an amount to be agreed between you and your operator, with remittances made to the owner of the haulage van by the operator, who gets to eventually own the van once payment is completed.

I will stop here for now but not without promising to show you how to go about getting a haulage van as well as other things you need to know and do to start that haulage business using the Hire Purchase option, in the next instalment. Mazel Tov!

'kovich

ENTREPRENEURSHIP SERIES (XII): HAULAGE BUSINESS | madukovich's cogitations https://madukovich./2016/01/04/entrepreneurship-series-xii-haulage-business/

Update the thread now! How much will the one in you post cost?

"Update the thread now! How much will the one in your post cost?"
- Okereke Ukachi on Nairaland in response to ENTREPRENEURSHIP SERIES (XII): HAULAGE BUSINESS | madukovich's cogitations https://madukovich./2016/01/04/entrepreneurship-series-xii-haulage-business/

The "One in your post" he was referring to is the picture of the haulage van I put up in my earlier post on the Haulage Business. This therefore is the update he seeks on that picture as regards an important step you need to take in birthing your Haulage Business, in Nigeria's Road Transport Sector, once you have the conviction within you, based on information available that it is a business path worth careering and investing in.

Since Okereke raised the issue of a haulage van, I will limit myself for now to just that, to discuss the options available in procuring one and how the Hire Purchase option also works therein. I had stated earlier, that one could procure a new van but for the niche I cover, and in the case of a starter testing the waters, a fairly used van isn't a bad option. In this category therefore, there are two options, one of getting a fairly used vehicle used in Nigeria for a while but still in motorable condition, or a fairly used van just imported from Europe, the United States or Asia.

The imported haulage vans are usually more expensive than the Nigerian used ones, though more often than not, you may have to spend more in putting the Nigerian used back into shape. This is not to say that you won't also need to repair the imported ones, in fact if you have to factor in the changes you will have to make on the imported one before you put them onto Nigerian roads, considering the capital you have to play around with, you might just settle for the Nigerian used type, where all of the cost involved in turning it around pales to the cost of acquiring a "Tokunbo" (imported vehicles, in the local parlance), and turning same around to make them motorable for Nigeria roads and conditions.

Let me just raise an instance of what you may find with buying a "Tokunbo" haulage van. Most of them have electric engines controlled from the brain box of the van. Now, if there is an electrical problem, the van simply shuts down and though you can find mechanics with scanners to restore the van to function, it will be difficult to find mechanics with scanners everywhere in a place like Nigeria, especially when the van is for haulage nationwide and it can breakdown just about anywhere in Nigeria. Hence, once you have procured your "Tokunbo" haulage van, most mechanics will advice you to change to the manual and the cost of doing that, including of changing the electric fuel pump to the manual amongst others, will contribute to pushing the cost of acquiring such over the top, that you may begin to wonder whether you shouldn't have bought a new van here in Nigeria in the first place (there are many times however, when one can be fortunate to get a Tokunbo haulage van that requires little to no touching up). Also, some of the Nigerian used vans may also have been used as factory fitted in the electrical mode, and it becomes pertinent that you change all to manual, as many a mechanic you will find will also advice you to do, especially for the reason I have afore stated, but the deal is that added cost will still be less than buying the imported vans and their associated cost, but that isn't to say that you cannot buy that or even a new one, when your haulage business begins to stand on firmer ground.

Currently, an imported haulage van of medium size and capacity costs between =N=900,000 and =N=1,000,000 to buy. In fact during a survey a few days back, of Ladipo Auto Market in Lagos, as well as along the road leading to Badagry (also in Lagos), where many of these Haulage Vans (and trucks) are packed for sale, it was found that the prices rose steeply to about =N=1.3 million, even as buyers were busy carting away the lot of them meant for cities such as Port Harcourt and Onitsha. That cost is devoid of the cost of effecting changes and repairs where needed in the vehicle.

You may however find a good haulage van of medium size and capacity, with a good body, most likely without the engine, which you may have to change for as little as =N=585,400, with the break down as follows:

ITEM =N=
Haulage Van 420, 000
Engine 130, 000
Pedal 2, 000
Springs 15, 000
Engine Oil & Filter 5, 400
Hand Pump Filter 3, 500
Gear oil 2, 500
Transport Fare 7, 000

TOTAL: =N=585, 400

Besides the amount quoted above, what you may need to replace in the vehicle, as well as repairs of a mechanical and electrical type, may include some, all or even more of the underlisted sundry expenses with their cost implications clearly stated, as follows:

ITEM =N=
Brake Pads 5, 500
Brake Pipes 3, 000
Brake Lining 2, 000
Brake Calipers 2, 500
2 Cans Of Brake Oil 900
Reconstruction & Fixing 2, 300
Of Exhaust Pipe
100 Amps Battery 17, 000
10 Ton Pumping Jack 3, 500
24' Socket 500
Wheel Spanner 1, 000
C Caution Sign 1, 000
4 Tyres 38, 000
Fire Extinguisher 1, 700
Rewiring 7, 000
Throttle Cable & Housing 2, 000
2 Head Lamp Socket 600
Ignition 5, 500
4 16' Bolta & Nuts 400
Fuel Pipe 450
Radiator Pipe Clips 200
Fuel Pipe Clips 100
White Gum 150
Mechanics' "Workmanship" 30, 000
Cutting Of Two Door Keys 1, 400

TOTAL: =N= 126, 700

Such that by the end of the day you would have spent roughly =N=712, 000 (still less than the cost of just procuring a "Tokunbo" without the necessary works and repairs), which is besides the cost of putting the haulage van's papers and licences in order. I will address that in the next, and hopefully final instalment of this foray into the nitty-gritty of starting Haulage Business, as well as the conditions under which it will run on higher purchase, so you can still keep your nine to five while running this by the side. Mazel to the "Tov" y'all!

'kovich

ENTREPRENEURSHIP SERIES (XIII): ENCORE HAULAGE BUSINESS | madukovich's cogitations https://madukovich./2016/01/07/entrepreneurship-series-xiii-encore-haulage-business/

okerekeukachi:
Update the thread now! How much will the one in you post cost?

Find the Update here Sir!

ENTREPRENEURSHIP SERIES (XIII): ENCORE HAULAGE BUSINESS | madukovich's cogitations https://madukovich./2016/01/07/entrepreneurship-series-xiii-encore-haulage-business/

Thanks for the explicit discussion about the haulage business. It's a business which myself and a friend have been contemplating starting sometime this year. My question is about the haulagr van spec best for this type of business, we are about to procure ( 5) Ford E350 cargo van for this purpose. Please kindly advice

Just before I let the matter of the haulage business go to rest, I will like to run a few things by you, by far the most important as this involves the financials that comes to you as revenue compared to the expenses I had spent the earlier instalments to highlight. So far, to get to the point where the haulage van is ready for business via the route I have so succinctly expatiated, =N=712,100 or thereabouts should be enough to put the vehicle in shape and ready for use. What is left to do is to get a Licence plate number and requisite papers to engage in the haulage business without much stress in Nigeria.

Procuring the vehicle's LICENCE PLATE NUMBER comes with the following, as listed below:

- Letter Of Transfer
- Vehicle License For The Year
- Hackney Permit/State Carriage License For Commercial Vehicle Goods Below 3 Ton (LAG I)
- Vehicle License Plate Number
- Vehicle Identification Tag
- Revenue Collector's Receipt
- Treasury Receipt
- Affidavit For Change Of Ownership
- Police Extract Incident Report
- Change Of Ownership/Engine/Chasis No.
- Proof Of Ownership Certificate
- National Certificate Of Roadworthiness
- Roadworthiness Tag
- Certificate Of Insurance (Third Party insurance cover, especially for a fairly used vehicle makes more sense than a more expensive, though with better coverage, Comprehensive cover, which you may never have to activate)
- Allocation Of Registration Number.

This will cost about =N=45,000 to procure, pushing the total expenditure to =N= (712,100 + 45,000), which is =N=757, 100. An SMS is usually sent from the licensing office to inform the owner that the papers are ready and is a form of proof of the genuineness of the papers.

Besides this, there are stickers and a waste basket that must be purchased, if the operator is to escape harassment by men of the various traffic and road agencies, including the police and customs and excise officials (usually found on federal roads vetting goods for contraband), especially when the haulage business involves interstate journeys, or even across the border to neighbouring countries. The list of STICKERS and CERTIFICATES applicable for one year includes:

All valid for one year
- Keep The Environment Clean Association of Nigeria, KECAN membership sticker
- KECAN Certificate
- Niger State Internal Revenue Service Condolidated Vehicle Emblem
- Niger State Consolidated Clearance, Vehicle Clearance Certifficate Permit
- Niger State Environment Protection Agencies Sticker
- Niger State Vehicle (Gaseous) Emission Clearance Certificate Permit
- Motorist Waste Bag Permit
- Vehicle Sanitation/Waste Basket Clearance Certificate Permit
- Road Tax: Hackney Permit
- Outdoor Mobile Permit
- Mushin Local Government Environmental Sanitation Sewage Disposal Certificate
- Mushin Local Government Radio/TV Certificate
- Mushin Local Government Loading & Off-loading Certificate
- Mushin Local Government Vehicle Outdoor Certificate
- Unified National Clearance Certificate of the National Union of Stickers/Emblems Workers of Nigeria
- Commodity & Commerce Sticker
- Community Infrastructural Development Sticker
- Road Tax Sticker
- Bus & Pickup/Lorry & Tricycle Permit (All routes)
- Federal Ocean Terminal Permit
- Littering Fees
- Isoko South Local Government, United Council Emblem
- Vehicle Classification Sticker
- Heavy & Light Duty Sticker
- Gateway Permit
- Niger Delta Mobile Advertisement Permit
- Trade Permit
- National Association of Revenue Collectors, NASREC Permit
- Ministry of Works & Transport, MOT Vehicle Permit
- Oil & Gas Permit
- Keep Nigeria Clean Handbill
- Power & Energy Railway Permit
- Niger Delta Development Youth Empowerment Permit
- Unified Local Government Emblem, Movement Permit
- Federal Republic of Nigeria, Clearance Certificate
- Government of Delta State, Clearance Certificate
- Federal Republic Of Nigeria, Clearance Certificate on Heavy/Light Duty Permit
- Niger Delta Development Clearance Certificate
- Isoko South Local Government Yearly Operational Permit for Commercial & Company Vehicle
- Township/Road Maintenance & Route Permit
- Community Infrastructural Development, Oil, Land Permit
- Niger Delta Development Youth Empowerment, Association of Youth Development, Operational Permit
- and a BASKET!

Though some of these may not make sense, they are requirements amongst so many others numerous to list here, which must be procured and presented as required by relevant authorities, if the driver intends to make interstate hauling stress free, as much as possible, within Nigeria.

These will cost =N=10,000 or thereabouts to procure, and still not exhaustive as the operator may still have to buy some other stickers depending on the requirements of the state s/he is conveying goods to. Many operators/drivers of haulage buses, vans and trucks for this reason tend to convey goods interstate at night, in a bid to circumvent processes and not have to pay the dues and fees of different states, either in transit or as destination. This additional cost will bring the total expenditure to =N= (757,100 + 10,000), which is =N=767,100.

Once it is certain that there are no more expenses to be made, an agreement between the owner and the operator/driver becomes pertinent. This agreement must include the terms and conditions under which the Hire Purchase deal will run, without excluding the amount payable in remittances at the end of the day. This is done simply by agreeing with the operator a sum to top the expenditure, such that the owner will make profits without cutting off the operator's head. For instance, the haulage van that cost =N=767,100 to procure and "put together" can attract an additional yield of between =N=500,000 and =N=1,000,000 (or more, depending on one's bargaining abilities and situation surrounding the deal) in remittances over a period of one year, after which the vehicle is handed over to the operator according to the letter of the Hire Purchase agreement.

If for instance the owner and operator/driver agree that the sum of =N=600,000 will be the expected yield, it follows that the total remittances expected over a year is =N=1,367,100, one can expect that the sum of =N=25,000 be remitted weekly, which will take about 54.684 (roughly 55) weeks to complete the sum expected. This is about a 78.22% yield on investment, which is not possible even if you left the same capital in a fixed/time deposit account in a bank over the same period of time. I am aware that with haulage trucks, yield can go as high as between 200% to 300% over the same period.

This about takes care of my treatise on Hire Purchase for Haulage Business in Nigeria, and like I earlier said it is one other business you can invest in, while still going about your nine-to-five. In this day and age, it isn't financially wise to have only one source of income, but because you can't divide yourself in the many places from which you can make this income, hire purchase business involvement is such that you can invest your time in one job, and have the others be such where your money works for you. This is wishing you the best of luck as you career into the world or entrepreneurs.

'kovich

NB. The Dollar currently exchanges to the Naira at =N=288 - $1, in the parallel market.

PHOTO CREDIT:
- http://www.thenationonlineng.net

ENTREPRENEURSHIP SERIES (XIV): ET TOUJOURS HAULAGE BUSINESS | madukovich's cogitations https://madukovich./2016/01/20/entrepreneurship-series-xiv-et-toujours-haulage-business/

Boss , how far...Pls i nid two 2.5 ton or 3.5 ton vans for transport on charter basis 3 times a week from asaba to various destinations within the southeast. Is it possible... I have included a pic of what size of van but its not necessarily a 2016 van i need. Any van in good working condition is okay.

fatytoy333:
Thanks for the explicit discussion about the haulage business. It's a business which myself and a friend have been contemplating starting sometime this year. My question is about the haulage van spec best for this type of business, we are about to procure ( 5) Ford E350 cargo van for this purpose. Please kindly advice

I'm sorry for responding late, I kinda saw this very late. Thank you for your input.

The make really doesn't matter compared to the capacity and the condition of the van. Usually, preferences tilt towards the LONG FRAME vans over the Short Frame ones.

Also a HIGH ROOF also attracts more patronage than the low roof. So, regardless of the make, I will advice that you make your decision to favour a LONG FRAME & HIGH ROOF HAULAGE VAN.

ugoadudu:
Boss , how far...Pls i nid two 2.5 ton or 3.5 ton vans for transport on charter basis 3 times a week from asaba to various destinations within the southeast. Is it possible... I have included a pic of what size of van but its not necessarily a 2016 van i need. Any van in good working condition is okay.

I am very sorry Sir, at the moment I cannot provide charter services for now, if by "charter" you mean you want to ave possession of it for the period in question. However, I can direct vans to your location to push your goods to any part of Nigeria, you need for them to go.

Assuming my driver delivers goods from Lagos to Abuja. On his way back he picks load to Lagos and he doesn't remit the proceeds to me because he knows that there is no way I will know he carried load. Is there a way I can know, e.g mounting camera?

Ogazyduby:
Assuming my driver delivers goods from Lagos to Abuja. On his way back he picks load to Lagos and he doesn't remit the proceeds to me because he knows that there is no way I will know he carried load. Is there a way I can know, e.g mounting camera?

It usually doesn't work like that with the higher purchase system. There is usually an agreed sum that the driver is meant to pay weekly. How he goes about making the money to remit weekly, and keep the difference for himself is his own business.

If it is such that they are salaried to you, then you may have to fix a camera, as well as a tracker, and most of those "Tokunbo" haulage vans have them, only that they are sometimes vandalized, but they can be reinstalled.

The aspect covered in my post is the higher purchase system though, where the hiree isn't concerned with day to day, save for his remittance.

Having been in Port Harcourt for a while now I observe that many items available in Lagos are not yet available for sale here.
On further inquiries I discovered that the main reason is that the transportation of goods from one location to another poses a serious challenge for many manufacturers. And I would like to suggest that for one who has been in the trucking business for a while, you could solve this problem while smiling to the bank. Supposing you arranged a reasonably priced kind of delivery for small time manufacturers and their distributors from Lagos to Abuja and indeed other towns where the cost of the trip is shared among the owners of the goods. A kind of grouppage arrangement with loading at a particular location and offloading at one location at the destination. Pm me if you need more insights.

madukovich:


It usually doesn't work like that with the higher purchase system. There is usually an agreed sum that the driver is meant to pay weekly. How he goes about making the money to remit weekly, and keep the difference for himself is his own business.

If it is such that they are salaried to you, then you may have to fix a camera, as well as a tracker, and most of those "Tokunbo" haulage vans have them, only that they are sometimes vandalized, but they can be reinstalled.

The aspect covered in my post is the higher purchase system though, where the hiree isn't concerned with day to day, save for his remittance.

Thank you. I am not into hire purchase. If you have contacts of persons who can install the camera, I will really appreciate having them. Thanks again.

Unfortunately, I can't recommend any because I haven't had cause to do something like that.

Even the van I recently purchased with came with the gadget though vandalized, I totally ignored since I wasn't going to use it anyway.

I know there are security companies in Nigeria who can help install such devices, but seeing that I have never used any of them, I can only refer you to Google or even Nairaland here, to make such enquiries, then follow up the contacts for the ones that can provide the solution to your queries.

madukovich:
Unfortunately, I can't recommend any because I haven't had cause to do something like that.

Even the van I recently purchased with came with the gadget though vandalized, I totally ignored since I wasn't going to use it anyway.

I know there are security companies in Nigeria who can help install such devices, but seeing that I have never used any of them, I can only refer you to Google or even Nairaland here, to make such enquiries, then follow up the contacts for the ones that can provide the solution to your queries.

Thank you and God bless you more

You're welcome Sir!

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Please share!

One of my future businesses .

Thanks OP for the enlightening info. It's very useful.

I run a Third Party Logistics (3PL) outfit that requires that I provide delivery bikes, cars, buses and haulage trucks for my clients and I'm open for any reliable truck driver or owner situated in Lagos.

Since from your post you seem to have access to them or truck drivers. I would like to work with you and/or anyone you can recommend.

My details can be found on my signature

Madukovich you are indeed a blessing to mankind. People like you are rare to come by. Its not easy sharing what you excel in, just for others to excel too.
Remain blessed

gidex2000:
Madukovich you are indeed a blessing to mankind. People like you are rare to come by. Its not easy sharing what you excel in, just for others to excel too.
Remain blessed

Thank you gidex2000.