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How to Start a Profitable Transportation Business in Nigeria

  • October 3, 2022

Transportation business in Nigeria is one of the oldest, yet continuously growing enterprises that generate consistent daily income for people into it.

This business is very profitable as the population in Nigeria keeps increasing day by day, and people need to travel from one place to another across the country.

Starting a transport business in Nigeria is ideal for those that like making money day in and day out. Although it requires relatively huge capital to start, you can make millions of naira from it if done the right way. That means it is very profitable!

It really delights me to write this post, because transportation business is what my father did, and was very successful. So, everything you’ll see in this post is mainly based on experience.

From the cost of starting the business and the amount of profit to expect, to how to start and be successful, as well as the risks involved, you’ll discover everything about transportation business in Nigeria here today.

So, if you want to know how to start a transport business in Nigeria, take a seat and let’s dive straight in.

About Transportation Business in Nigeria

Transport business, popularly known as passenger transportation business in Nigeria, and sometimes carrier business, is a type of business where you transport people, and/or luggage from one place to another.

This business has been in existence for years, and still generating income for lots of regular drivers, and even companies such as Peace Mass, ABC Transport, Chisco, GUO, GIGM (God is Good Motors), and so on. It can be started on a small scale, as well as a large scale.

Transportation business is branched into different types and forms, and all the types are very profitable and bring in money on a daily basis.

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Types of Transport Business in Nigeria

Before starting a transport business, first, it is ideal to know the types of transportation businesses in Nigeria, and how they work. Check them out below.

Commercial Bus Transport

Bus transportation business in Nigeria

Commercial bus transportation business is the most popular type of transportation business in Nigeria, it is mainly referred to as the passenger transport business in Nigeria.

This typically involves the use of buses and minibusses including, Hiace (hummer bumber), Mazda bus, Siena, Picnic, Costa bus, luxurious, bus and so on to transport passengers (people) from one place to another, usually inter-town, and inter-state.

Town Service Transport (Taxi)

Taxi transportation business is another popular type of transport business in Nigeria.

Just like commercial bus transport, Taxi transport can also be referred to as a passenger transportation business, as it is also used to convey passengers from one place to another, although within a town.

Thanks to Uber, Bolt, and Taxify, this business is easier than ever, as youths also engage in the taxi business these days.

Motorcycle Transport (Okada)

Okada business in Nigeria is also a passenger transport business type that deals with carrying people from one place to another on bikes.

Tricycle Business (Keke Napep)

Keke Napep business is also a type of transport business that deals with the transportation of people within a town.

Haulage Transport

Truck transportation business

Haulage transport business is different from all the four above, as this deals with the transportation of goods from one place to another. This type of transportation is usually carried out with the use of trucks, tankers, tippers, trailers, and so on.

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How Much Do You Need to Start a Transportation Business in Nigeria?

Now that you know the types of transportation business in Nigeria, how much is required to start the business?

The main cost to calculate in starting a transport business in Nigeria is the cost of the automobile, as it is the only material needed and the most expensive.

To start a passenger transport business in Nigeria, you need a capital of up to 10 million naira. To break it down, for a minibus transport business like Hiace and Siena (tokunbo), you need at least 2 million naira to start.

If you’re looking at a luxury bus or Costa bus transportation business, the startup capital required is at least 5 million Naira. And for Okada transport or Keke Napep, you need at least 300,000 Naira.

For the haulage transportation business, the amount needed to start is at least 10 million Naira, as you’ll need a bigger automobile like a tanker, trailer, and tipper.

Keep in mind that this cost covers the registration and all other expenses that will be incurred along the line.

Check Out: 70 Lucrative Businesses to Start with 500K in Nigeria

How Profitable is Transport Business in Nigeria?

Like I have been saying, transportation business is a good source of daily income in Nigeria, as it is very profitable, both passenger and haulage.

The profitability of this business depends heavily on management, as unexpected expenses (repairs, drivers’ exploitation) that surely will be incurred along the line affects the amount of money that will be made.

For passenger transport business In Nigeria, the profit to be expected per trip/day is at least 20,000 Naira. While for haulage transportation business the profit to expect per trip is at least 100,000 Naira.

How to Start a Transport Business in Nigeria

Now to the main topic! The following is a step-by-step guide on how to start a transportation business in Nigeria.

1. Pick a Niche

The first step in starting a transport business in Nigeria is deciding the type of transportation business you want to venture into.

From passenger transport business to haulage transport services, we have provided you with a list of all the types of transportation businesses in Nigeria.

Now, all you need to do is pick one to start with. While deciding, you need to put into consideration some factors including:

  • What type is most profitable in your area?
  • Which one fits your budget?
  • Which type is easier for you to manage
  • Risks involved
  • Which one is easier to scale based on your location
  • And so on.

All that is needed to be considered while picking the best one for you. Once considered, you can go with the one that best fits your criteria. Although, I would suggest commercial passenger transportation (inter-town) for you to start with.

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2. Get a Vehicle

Once you’ve decided on the one to go for, the next thing is to acquire an automobile, be it a vehicle with which you can start the business.

In this step, you need to do a little offline research and seek from drivers the best type and commonly used vehicle for transportation in your area. For instance, in Ibadan, Mazda bus is commonly used for inter-town, and even inter-state transportation, while small Siena, and Picnic are used in some other parts of the country.

Once done with the research, you can go ahead and get the type of vehicle used, either on a lease, hire purchase, or outright (full) purchase.

3. Register With the Necessary Union

Even if you’re not familiar with transport business before in Nigeria, you must have heard of the “Road Union”, unless you don’t live in Nigeria.

Say you’ve gotten the vehicle, you cannot start a transport business in Nigeria without registering with the road union, and other associations related to transportation.

As a newbie just starting with just a vehicle, you must get your vehicle to the park in order to get passengers, and an unregistered vehicle will not be allowed to stay in turn not to talk of loading.

Unless you want to start a big transport company where you’ll have your own private motor park, you won’t need to get to the general garage to get passengers, although registration is still required under the following union.

  • National Union of Road Transport Workers (NURTW)
  • Road Transport Employers Association of Nigeria (RTEAN)
  • Nigerian Association of Road Transport Owners (NARTO)
  • National Association of Government Approved Freight Forwarders (NAGAFF)

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4. Hire a Driver

Unless you want to start driving the vehicle yourself, you won’t need to hire a driver. However, if you want to take it as a real business that you will scale even after starting small, you’ll need to employ drivers who will drive your vehicles and give you daily return.

Once you get a driver, and all the steps above are completed, you can start making daily income from your transportation business, as it is officially started.

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How to Succeed in Transportation Business in Nigeria

The four steps above cover exactly from start to end how to start a transportation business in Nigeria. Although you may be profitable starting with those steps, we have some tips for you that will help maximize your profits and speed up your success in the business.

Start Small and Scale

As a newcomer, it is ideal to start small to gain experience on how to successfully run the business. Transportation business is very easy and lucrative, but if you try to jump-start in the middle of nowhere, failure is certain.

For the first few months to a year, just run the business with one or two vehicles, and once successful, you can scale by getting more vehicles and even starting a private transport company.

Prepare for Unexpected Expenses

One thing people complain so much about this business is the unexpected expenses you’ll surely incur along the line. These expenses include repairs, tickets fee, and sometimes police, and/or road safety fees for charges.

All these sometimes make the business frustrating, as you may spend all the profit made from the business on the business if something goes wrong.

I could remember there was a time when one of my dad’s buses was faulty, he spent a lot on it, and on the first day of work after that repair, it broke down again due to another fault. The frustration led him to sell the bus after the fourth unsuccessful repair and ended up losing on the bus. Although, the other buses helped home recover quickly.

Choose your Driver Wisely

One complaint about the transportation business in Nigeria is drivers. This is Nigeria the idea of “Na Where Man Dey Work He Dey Chop” has made a lot of small startups that hire employees run down.

That also applies to transport business, a lot of drivers are dishonest and come up with silly excuses for not meeting the daily target. Some even remove things from the vehicle to make it faulty, just in the name of making more money for themselves.

So, while looking to hire a driver, make sure that he is trustworthy, and can confide in him.

Passenger Transport Business in Nigeria – FAQs

Is transportation a good business in Nigeria?

Yes, transportation business is good and very profitable in Nigeria, although it comes with a lot of risks.

How can I start a transportation business with no money?

The only way to start a transportation business without money is to apply to become a driver at big transportation companies.

What are the documents required for transport business?

The documents required for transport business in Nigeria include driver’s license, vehicle papers, and various road union registration.

Is shuttle business profitable?

Since shuttles are used to convey passengers from one place to another, it is a town service transportation business that is very profitable.

What is the best car for transport business in Nigeria?

The best cars for transport business in Nigeria are Siena, picnic, Sharon, Golf 3, Vento, and Carina E.

What is the best bus for transport business in Nigeria?

The bus for transport business in Nigeria is Toyota Hiace, popularly known as hummer bumber.

Conclusion

Transportation business is a very profitable business and a good source of daily income, although it requires a huge startup fund and comes with a lot of risks, millions can be made from the business if done right.

With this post on how to start transport business in Nigeria, I believe you should be 20% set to start, complete the 80% by taking action.