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|Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by ThaiAlNigeria(m): 8:17am On Aug 22, 2014|
Looking forward to be a valuable contributor in these forums.
I'm from Bangkok Thailand and our company has been doing business in Nigeria for almost 2 years.
We have a registered company in Nigeria as well as in Bangkok and Dubai.
My elder brother saw an opportunity in Nigeria and made up his mind that Nigeria indeed has a great many opportunities.
Needless to say, actually implementing the idea was not an easy task.
We faced so many great hurdles to make it here that we almost closed down our business at the end of first year for reasons I will further explain soon.
I will separate my post into 2 phases.
1) Our first & second business idea and how that failed (Rice, Clothing and imports)
2) our third business idea and how we made it. (Haulage)
I will start with the first phase
Our first business idea was importing Rice into Nigeria. Seeing that I am from Thailand and Nigerians love Thai rice it sounded like a valid business plan. So we went around Lagos searching for buyers. We came across several powerful women that trades in Rice. We saw these huge warehouses full of rice and many container of rice being offloaded into the warehouses. They were willing and enthusiastic to work with us if we could get them their price. Daily rice prices are fixed. So we made a connection with these powerful women.
Now our next goal was to find the rice at the right prices here in Thailand. But it does not end there. We had to register our rice with Nafdac (Nigerian agency for food and drug). And going to the process of Nafdac is amazingly time consuming and expensive. We hired a lawyer to help us speed the process.
We had also known that the import taxes on rice into Nigeria is 40%. Now here was the issue. We tried finding a source of rice at the right prices here in Thailand but it was not possible. The reason it was not possible was because the import taxes were too high and there was no way we could have made any money selling to the Nigerian Market. We wondered how did other people do it? We investigated. We went to the port and made some connections with some people there and found out that rice importers were not paying import taxes. They were paying money under-table. It is an acceptable practice. But we understood it was against the law and decided to drop the idea of importing rice as wanted to wholly abide by the country laws 100%. We could have made money with the right connections but decided not to go this route.
That is failure of our first business plan.
Our second business plan basically involved importing clothes worth around $2000-$4000. But we failed to sell enough in the market. Due to competition and lack of market research we failed.
After this we decided to try to import various stuff into Nigeria like Air conditioners and electronics. But we realized that the prices the buyers were asking were too low compared to what the factories were selling it for. Plus due to heavy competition, complexity in import/export process and direct easy access to factories itself via alibaba and websites; we as middlemen importers were not needed and even if we were our profit margins would be very little.
So we kissed our import dreams goodbye as well.
Almost 1 year in Nigeria had passed.
If there is one thing we learnt.....doing business in Nigeria was NOT easy.
If you are interested, I will next write the second phase of our story later and tell you how & why we succeeded and the extreme difficulties (To the point where we were about to lose most of our fortunes) we faced before we succeeded in our next venture. (Haulage)
My humblest regards.
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|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Sparrow13: 8:25am On Aug 22, 2014|
Welcome Thai Brother
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Dreal1247: 8:44am On Aug 22, 2014|
It is always easy to make laws to boost the Nigerian economy, but instead of implementing them into the government purse, they are short-implemented into individuals' purses. Can you sped how it affected external investors and it will still continue. God will help us.
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by 2cato: 9:16am On Aug 22, 2014|
@op nigeria is a strange and funy country where most people like to take the law by the neck and shake it untill submission.
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Nobody: 3:03pm On Aug 22, 2014|
Waiting for the complete story
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by MyIncorp: 5:13pm On Aug 22, 2014|
In as much as Nigeria is a great place to do business, I must admit that adequate market research is essential in order not to fall into the large market trap.
I also admire your unrelenting desire to maximize your investment on the African soil. I have visited your website to read up the services you render and I'm impressed. Keep the fire alive!
My company works with local and foreign investors and enterpreneurs looking at forming a company in, and hiring or relocating expatriates to Nigeria and the rest of Africa. http://www.citizensandexpats.com
I'm following your post to read the concluding part.
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by ThaiAlNigeria(m): 11:15am On Aug 23, 2014|
I will elaborate on Phase 2 (Haulage) which will include 1) how we got into this business 2) our growth 3) our struggles & near collapse 4) Our rally push 5) success
1) How we got into this business.
We were exploring opportunities. We've tried out several businesses but realized that either there was too much competition, dubious activity or the profits were dead low in relation to effort involved.
Our employee/partner/friend of Thai Alpha Nigeria suggested Haulage as an alternative. We were hesitant as it was very capital intensive. He said he knew someone whom we will name Chris, in this business who owns a truck and claims he is doing well. Basically what Chris does is he lets his truck work for a big manufacturing company "under" an independent transporter company. The independent transporter company takes Chris 10%-20% revenue that Chris's truck generates for the "opportunity" to work for the factory. Chris has to manage his own truck and find his own drivers and do any repairs he needs to. Chris is unable to work directly for the manufacturing company because in order to work directly with the factories, you need to OWN at least 10 trucks IN YOUR NAME. The standards are very strict.
We did our due diligence. My personal strength lies in doing proper research. I read and absorb alot of information. There is alot of post on the internet about how Haulage business is great and you can earn alot of money in a very short time. It sounds too good and very sweet with a cherry on top. The Nairas earned makes your mouth water. After much due diligence and making some connections we decided to buy a 40 footer truck and run it under our Independent Transporter we will call Jibs.
2) Our Growth
So we got our truck. It started running and all was well. Jibs were paying us on time. The revenues were indeed great! What is posted on the internet is true. You stand to make alot of money in this business. Your investment can be fully recovered within 1 to 2 years. We decided to aggressively expand as quickly as we could. Within 8 months we added an additional 4 trucks to our fleet. We are good at getting investments. Thanks in part to our Managing Director Charismatic personality and integrity. 4 trucks in 8 months is alot of capital.
3) Struggles & near collapse.
There were common struggles that everyone in the haulage business knows. Such as managing drivers, repairs and one of the worst issue of all; buying the wrong sort of trucks. We made alot of mistakes but we learned quickly and rectified it. In this process we even made our own TRUCK BUYING MEMO. These are our rules laid out about quality before we buy trucks. But the most serious issue we ran into was can you guess?........The Jibs. Basically the Jibs;our independent transporter were alarmed at the rate we were expanding and decided to start playing games with us. They delayed our payments, and even outright stopped paying us for as long as 4 months straight while our trucks were running! This had consequences that effected the company in ways we shudder to think about.
We had to pay our drivers, our trucks needed repairs, the drivers were complaining, our partners were not getting paid. Income stalled for us all. We investigated and knew that the factories were paying on time, but the Jibs were making all sorts of excuses. We pushed and pushed them for payments but they only paid paltry sums. It got so bad. Everyone from CEO (Myself) to the drivers were affected. My employees were so disheartened that one of our top management suggested that should close down the business.
4) Our Rally Push
In that critical moment, I refused to give in. I rallied everyone, decided that I was going to use the special gift that all my employees and management had to make this happen. I looked at the financials again and knew that the business was good. But the Jibs were the issue. I knew if I could push on for the next few months we could make it happen. I formulated a new strategy, the strategy of "building relationships". We started building good relationships with the management of various factories. We were at good standing with the management because we always maintained our trucks and always kept our drivers happy. Through building connections and strong personal relationships and through our hard work and integrity, we were given a favorable option of working directly with the factory with our 5 trucks. Thats called FAVOUR and it comes with BUILDING A BRAND.
Long story short, we are now working directly with factories and they are very happy to accommodate us and is encouraging us to expand and bring in more trucks. Which obviously we are more than happy to accommodate.
In my next post, I will write from personal experience some of the critical gaps that exist between Nigeria and the World. The gaps that could be filled to encourage more foreign investments into this lovely country. And also I will give you some hard insights and statistics & tips about the Haulage business and business in general Nigeria for locals and foreigners.
My humblest regards,
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|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by MyIncorp: 11:35am On Aug 23, 2014|
Your write up is an awesome resource for intending investor, expat community and anyone who wants to go into the halauge business in Nigeria!
I really admire your business acumen.
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by ddeston(m): 12:04pm On Aug 23, 2014|
Hi Thaibro I really appreciate what you are doing. I would appreciate more insights into the businesses and if you are open to business ideas that would be highly profitable. I would love if you hit me up on 07010659454.
I am the C.E.O of Ekiema media marketing and I don't mind having u as a mentor.
Let's talk please
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by femokuc0: 1:37pm On Aug 23, 2014|
One of the key factors that drive economic growth is the number of people of working age. Several trends are responsible for the increasing appeal of the region to international investors. These include high GDP growth rates, rapid urbanisation and the “demographic edge”. Other economic factors are the big new discoveries of natural reasons, substantial investment in infrastructure, sustained growth in per capital incomes and the growing ability of countries to raise project financing on international capital markets.
By 2040, Africa will experience faster economic growth than any other region and is expected to have the biggest labour force in the world. As companies around the world look to exploit the widely reported untapped potential on the continent, the question now is, where can one focus if they want to expand their activities in sub-Saharan Africa (SSA)?
read more about the Top 10 African cities of the future on http://saleinafrica.blogspot.com
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by ThaiAlNigeria(m): 7:43pm On Aug 23, 2014|
We are in the process of revamping our website. Please note that our website email firstname.lastname@example.org is not currently working. It will take around 2 months to fully renovate and change our website. Until then you can send me an email on email@example.com
Sparrow - Thank you for the welcome bro!
3cycle - Thanks for your interest! There's alot more to it which I will try to explain the in next post.
MyIncorp - Thank you for your interest! We'll definitely connect someday and when we can, we will refer your company to other people.
ddeston - We travel to Lagos every month sometimes even every week! We can connect some time in October or November. We will definitely do our best to see how we can benefit each other even if there is no business taking place between us. You're most welcome to send me an email at firstname.lastname@example.org
femokuc0 - Any post that enhances the image and encourages more confidence in Nigeria is welcome. Your blog will also give us insights for our research as we continue to pitch to investors around the world to invest in Nigeria.
I hope to contribute more valuable insights in my upcoming post.
My humblest regards,
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by mrjojo: 10:16am On Aug 24, 2014|
Hmm, nice...learning.... Keep it coming pls
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Joel3(m): 4:31pm On Aug 24, 2014|
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by ThaiAlNigeria(m): 11:46am On Aug 25, 2014|
Today I will try to elaborate on some hard facts, insights & statistics about the Haulage business in Nigeria.
----- Hard facts, statistics and Insights about Haulage business or business in general in Nigeria ------
I will start with this. Any foreigner looking to succeed in Haulage or other businesses in Nigeria must know this. You cannot do it without trusted friends/employees/partners actually living in Nigeria. That is, according to us, the first most important factor. Either that, or you yourself must live in Nigeria or at least travel to Nigeria once every month. If you are unable to do any of these, your business will most certainly fail. We were fortunate enough to have the best most trusted friends/brothers/partners/ along side with us and the opportunity to travel to Nigeria once every month and sometimes even on a weekly basis! If you are a foreigner and you think you can just do business in Nigeria while living outside of Nigeria for more than a few months, you will fail.
It is also critically important for foreigners to build strong family like personal relationships with the locals. Many foreigners feel like Nigerians cannot be trusted. That is an unfortunate impression created overtime by a few percentage of Nigerian people attempting to scam people over the internet. But the truth is, Nigerians are some of the most trusted, dynamic, intelligent, fierce, humorous and hard working individuals on the planet. Use common sense when judging people and their background. Not everyone is to be trusted. But alot of them can be!
For foreigners -- Nigeria is not for the faint hearted people. There is indeed alot of money and business opportunities in Nigeria. But if you are weak willed or your business acumen is weak, you will eventually lose your money. You need to have that burning desire to succeed and the passion for the country. You need to be rugged and determined. If you know what you're doing, you will be wealthy within 5 years.
Haulage is a competitive business.
Haulage business is a very good and exciting business. And the internet is filled with optimistic and candy wrapped description about the business. But here is the truth. Its true....Haulage business is the best! But very few people can break through to become independent transporters or a sizable haulage company. I can imagine that our company are in the top 10%-20% of companies that are able to be independent Transporter. Here are some critical reasons as to why.
Lack of funds and liquidity -- Abi, Investing in a Tokunbo truck requires huge capital. Alot of people cannot simply get into this business due to lack of capital. And it is a huge mistake to take loans from bank to finance your truck. Reason? You will understand as you continue to read. There will always be unforseen issues and problems with the trucks. If you know how to buy a truck, you will be fine. But if you don't know how to buy a truck, your repair bills and ineffective service will kill your brand and name and ultimately you will be left with a huge pile of debt.
People like Jibs wont allow you to grow -- This is in my opinion one of the biggest hurdle in this business. If you have read my previous posts, you will know who the Jibs are. These independent transporters simply do not want to see you grow, Because growth for you means more competition to them. Truth is, there are some good independent transporters you can work under. But alot of them will simply take advantage of you and your trucks and will use YOUR revenue to service their own trucks. That is why it is extremely important you FIND A TRUSTWORTHY independent transporter. Make sure you do everything you can to find out if they are trust worthy.
The importance of independent transporters -- Independent transporters are necessary because they have the experience, connections and a personal fleet to help factories haul goods. Factories needs to haul goods. It is critical to their business. They cannot rely on amateurs. They need professionals. Factories do not like to work with new players unless the new player can prove they can grow to a sizable fleet and manage their fleet effectively. Hence if you are interested in the haulage business, you must go under an independent transporter because the factories simply wont accept you. Once you have some experience, the next issue you have to think about is funding. Can you muster up enough money to grow to at least 5 trucks? Factories wont even consider meeting you unless you have 4 trucks.
Jibs are happy if you only own 1 truck -- As I mentioned above, Jibs do not want to see you grow. They will pay you on time and keep you happy if you only own one truck. But if they see you start growing to 3-4 trucks, they will be alarmed and start formulating strategies to stop you from growing. I need to mention this, we went through HELL when the Jibs stopped paying us. I was extremely fortunate enough because I had taken capital money from my other businesses and put into our trucking businesses. But suffered I did. We even had to borrow money from friends and families just to keep our trucks running and to pay off the drivers and keep our employees happy. We always pay our employees before we pay ourselves. Had we had no backup MONEY for the 5-6 months of hell that the Jibs put us through, this business would have been finished and we would not have been here. In all of this, I want to say that our Nigerian brothers/family/partners/management still believed and stuck with us through it all. They knew we would deliver and believed in our integrity, honesty and passion for Nigeria and we also believed in theirs.
We have no idea how many good honest hard-working truck owners these jibs has put out of business, but the numbers can be high. In fact, we connected with some people that wrote about the haulage business over the internet a few years ago. People who gave good insights about the business. But unfortunately they are now not in the business. Some are. But alot of them are not. And the jibs plays a huge role in that. They simply cannot compete with the jibs due to lack of funds.
PS - We're still after the Jibs to pay us our due. This is the exact words the Jibs said to us "We're frustrated that you are not working under us anymore".........
Start slow, grow gradually -- This is a capital intensive business. There is no need for you to take aggressive risk. The key to being in the Haulage business is this. ----- MOST IMPORTANT. Find a trust worthy independent transporter. He will pay you on time and will be honest with you. He will give you hints and tips. Tell him about your dreams and goals. The Independent Transporter will guide you, even to independence if you did like! The money he pays you, it will be a significant amount. Haulage is a good business. The pay is good. Save up some money from the revenues. Let a year pass. Let the revenues come in. Learn to manage your truck. Learn to find good drivers and keep them happy. The money that you have saved, buy a 2nd truck, give it to the same trustworthy independent transporters. Let them pay you for 2 trucks. This is your 2nd year. Let this second year pass. Let the money come in. Save up. Buy a third truck. Give it to the independent transporters. Let them pay you. Now you are getting alot of money. Good. Get a 4th Truck. Let it go under the independent transporter. They pay you well. Now you're getting quite wealthy. Now within the 4th or 6th year, you have 5 trucks. Your revenues are now in the millions per month. Do you know the cost of fuel? Now you may want to go independent. Well can you? Can you build a good relationship with the factories? Do you know how to? Most factories will only accept 10 trucks. Have your trucks always been in a good condition? Have you built a good name for yourself? Good, they accept you. You are now independent! Now you do not need to rely upon the independent transporters. You work directly with the factory. But working with the factories comes with more responsibilities. Can you handle that? Sure you can! You've made it this far. Alternatively, if you do not want the hassle of working with the factories and are happy with your Independent Transporters, you may take this route.
Factories do not like people like the Jibs -- Honestly, we can tell you that the Jibs management system is terrible. Haulage business is in a dire need of quality and world standard services. The factories themselves do not like the Jibs, but the jibs does manages to get the job done, which is to haul goods for the factories. The haulage business is in need of a revolution and I believe it is soon coming. Nigeria is changing.
Management intensive -- Haulage is management intensive. But once you understand and get used to the small nuts of bolts of the business, it becomes routine and simple later on. But in the beginning, there is alot to look after. Wheels, drivers and an whole assortment of repairs, numbers, etc etc.
Don't do it all by yourself -- You can share the work. Have faith in your partners. Share the work load. It gets easier as time passes by. Money is good. You do not need all that money for yourself. Its hard work. You most likely wont even have time for yourself if you try to do it all by yourself. Share the burden. There will be enough millions of Nairas for the both of you. Have a life outside of the trucking business. Take saturdays and sundays off. If you really want to grow into a huge haulage business, you need people to work with. But if you only plan to have 3-4 trucks, you can work alone. No problem.
Buy Tokunbo trucks from Nigeria itself -- It may be cheaper to buy trucks from the Netherlands or whatever. But the truth is, you wont have an opportunity to check your trucks before it becomes operational. I can tell you that some of the best trucks with little to no issues were bought from Nigerian soil itself. The worst trucks with the largest number of issues were the cheaper ones from abroad. Don't be cheap. Buy good trucks! Its an investment. And your trucks will make you millions in the coming years. I recommend buying from Nigerian soil. Not from abroad. We've personally had terrible experience from the Netherlands.
Haulage is good business comparable to an income generating asset -- I would like to state it again. Haulage is one of the MOST PROFITABLE business in Nigeria. You get 100% return on your investment within 2-3 years. And the truck continues to generate money in the 3rd year upto 10 years if you maintain your trucks well. A house cannot do that for you. A house can never return your investment within 2-3 years. But always remember, the key is finding a trust worthy independent transporter to work with.
I've tried my best to describe hard statistics, tips and the realities of the haulage business.
In my next post I will write down critical gaps that exist in my personal opinion between Nigeria and the World.
My humblest regards,
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|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by MyIncorp: 8:08am On Aug 26, 2014|
The Jibs are in all sectors of the economy, so I'm not surprised.
Good for you you were able to spot good friends/partners in Nigeria; and you are also learning from your previous mistakes.
And the fact that you were able to own up to 5 trucks in just 2 years is commendable especially when the fund is limited.
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by TeamclicksAir: 9:25am On Aug 26, 2014|
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by stonemind(m): 9:25am On Aug 26, 2014|
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Booty4me: 9:25am On Aug 26, 2014|
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by TeamclicksAir: 9:25am On Aug 26, 2014|
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by ayusco85(m): 9:25am On Aug 26, 2014|
u have almost become nigerians. setting up a successful business in nigeria is not easy. kudos
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by yuzjet(m): 9:25am On Aug 26, 2014|
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Nobody: 9:25am On Aug 26, 2014|
Nice one, OP
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by MrRhymes101(m): 9:27am On Aug 26, 2014|
all eyes open
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by saasala(m): 9:27am On Aug 26, 2014|
Will come back to properly digest it and pass my comment.
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by shadowwalker101: 9:28am On Aug 26, 2014|
if they can make it tgen we can make it
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Hemanwel(m): 9:32am On Aug 26, 2014|
It's an open secret that the Nigerian investment clime gives good return on investment.
Once you have a solid start-up capital,and a fantastic idea,then you are good to go!
Mr Thai,your testimony shall remain permanent!Just ensure a proper welfare plan for your employees.
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by TheRealAdonye(m): 9:33am On Aug 26, 2014|
|Re: Foreigners Doing Business In Nigeria. Our Failures Dreadful Struggles & Success. by Pavore9: 9:34am On Aug 26, 2014|
Following....but the English and flow sounds Nigerian!
Freshcvvs's Punting Journal To $50-$100 consistent profit (Updated) / See Two Sure Ways To Earn Income Online Without Spending Money! / My ATM Card Was Stolen And Money Was Withdrawn Within Hours - Advice Needed.
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