I am sure at this point you may just be wondering what is behind my penchant for writing more in favour of business in the road transportation sector, over and above other sectors, but the truth is that I have infact written about small business in other sectors, and definitely will be doing more of that in time to come.
However, my slant to the road transport sector is predicated on the fact that recurrent cost or expenditure is almost non-existent as there’s no rent, salaries to pay and the works. Once you have put your vehicle out, you just sit back and collect “rent”, for as long as the vehicle plies the road and according to your agreement with your operator. And because my focus is on entrepreneurs who still want to keep their nine to fives, the minimal supervision required for the HIRE PURCHASE SYSTEM in the Road Transport business is very ideal.
To recap; as regards starting a small business in the road transport sector, so far I have dealt with the Kèké (TRICYCLE) business in my “KEKEPRENEUR” treatise, and how to go about starting one, and even increasing ones’ fleet in the same business. This blogpost ups the ante, to the next level, not necessarily to the Combi Buses, popularly called “DANFO” in places like Lagos, but to another phenomenon gaining ground in Lagos and other parts of Nigeria. It is a smaller version, popularly called the MINIBUS, that seats about seven passengers. I saw the minibuses for the first time when I visited Osun State about five years ago soon after Governor Rauf Aregbesola came into office. Much later it became a common site in Lagos Island before spreading to other parts and suburbs of Lagos, and indeed to every other part of Nigeria.
The minibus is ideal for those who have started the Kèké business and wish to try something slightly bigger. It can also be the starter point for some either singly, or as a group. The procurement of a minibus isn’t as simple and straightforward as that of procuring a Kèké for instance. This is because many things are involved, and most times it is assembled on request as I shall briefly go into before I enumerate the financial implication of the whole arrangement.
The parts for the minibus is usually shipped in from Asian countries like Japan and China to a place like LADIPO AUTO-MARKET in Lagos, accessible from Toyota Bus Stop as you make your way to and from Oshodi from and to “MILE 2”, either way. What you see on accosting the stack of minibus body and parts is reminiscent of the bits and pieces you will find your piece of clothing in, at the tailors’ before it is pieced together to become that head turner that is your fashion statement.
Ladipo Market is not exactly a clean market, and it is understandable why the Lagos State government have over the years suspended work and trading there because of the lack of or unimpressive attempt at sanitation, but if you also consider the kind of business that’s done there with all the oil, and engines and the likes as with a mechanic workshop, you will appreciate why Ladipo market is the way it is. The government cannot also be exonerated from the blame, because all that is on ground there has totally been off and by self help with absolutely no social amenity or infrastructure. It isn’t a place you want to be during the rainy season, but I don’t have to go into all of that for now, rather I’ll focus on the business, the reason for which we are here in the first place, like they say in Yoruba parlance, “Owó ìgbé Kí rùn!”, (Money of and from faeces does not smell).
The minibuses come in as RIGHT HAND DRIVES hence need to be converted to the Nigerian LEFT HAND DRIVE, after the initial assembling.
The simplest way to explain what happens here is that the conversion would involve the replacement of steering rack, dashboard, and possibly brake and throttle pedals, from the right to the left, amongst other things I am incompetent to write or even postulate about. The bus is thereafter painted to whatever colour you wish.
For commercial purposes, which is the meat of this post, the minibus may be painted in the official colour of public transportation as dictated by the state where the road transport business is to be carried out, for example the YELLOW with BLACK STRIPES for Lagos, and the GREEN with WHITE STRIPES for Ogun State etc. Once this has been done, you are ready for business. You must note however, that most drivers, especially in the Lagos area, prefer the MANUAL TRANSMISSION over the AUTOMATIC TRANSMISSION minibuses, though they wouldn’t mind driving whichever you present to them.
I know you will consider this very incomplete if I don’t include the cost implication of putting a minibus on the road. Therefore it will interest you to know that for a fully converted minibus from the RHD to the LHD, and painted will cost you =N=500,000.
That amount includes also the cost of adding an extra row to seat an extra three passengers, as the minibus originally comes with one for just three passengers, at the back and one with the driver, with a large boot for cargo. The space in the boot is what is converted to accommodate another three, which brings the total number of passengers to seven.
While the vehicle is being assembled, you will have to organise the vehicle particulars which will cost a total of about =N=38,000 and includes the following:
1. National Certificate Of Roadworthiness
2. Certificate Of Insurance (Third Party Insurance)
3. Commercial Mini Bus Vehicle License
4. Vehicle Identification Tag
5. Hackney Permit/State Carriage License, Inter State (I/S)
6. Allocation of Registration Number Certificate
7. Proof of Ownership Certificate
8. Revenue Collectors’ Receipt
9. Particulars of Motor Vehicle from The Nigeria Police.
To take the vehicle out of the yard at Ladipo Market, you will have to pay the gate fee, the Local Government Fee also known as “Owó Ilè”, then tipping the police as you drive out of the immediate surrounding where the market is located. This should sum up to about =N=5,000. If you will need someone to drive the vehicle out of the market to your destination, you will have to negotiate with any of the drivers they provide you, which may be up to =N=3,000 within Lagos, and more outside of Lagos, depending on your bargaining power and haggling ability.
The cost at this stage is about =N=546,000. Once you have agreed terms and conditions with the operator or driver, the next thing you will have to pay for is the fee for him/her to operate from a park, which is between =N=5,000 and =N=7,000, with or without a bottle of gin, to seal the business relationship with the head/Chairman of the Park.
A distinction as to what the driver will deliver at the end of the day may depend on the “PLUGS” the minibus came with. It is usually said that a minibus with 4-Plugs should earn you about =N=1,200,000 while the one with 3-Plugs should earn you =N=1,000,000, but the fact that you have a 4-Plugged Minibus is no guarantee that your driver will do more trips than the other with 3-Plugs, so it is safer to deal with the 3-Plugs and bargain for something higher than a million naira with your driver or operator, as you may get a 4-Plug, and yet find no driver willing to deliver more than a million Naira to you at the end of the day.
Unlike the Kèké where deliveries per week is pegged at =N=13,000 per week for a total of =N=700,000, the minibus can deliver between =N=18,000 to =N=20,000 per week for a total of =N=1,000,000, and even if two or three people contribute to make up the sum of procuring one for business, they can still have with =N=6,000 and =N=10,000 weekly, depending on the arrangement.
So, there you have it. All you need to know about this small business of Minibus Transportation. I have dealt with the issue of funding in my first blogpost on the ENTREPRENEURSHIP SERIES hence wouldn’t go back to it, except on request. Thank you once again for your time!
The Nigerian Naira exchanges to the American Dollar at =N=198/$
ALSO READ: ENTREPRENEURSHIP SERIES (X) : ENCORE MINIBUS TRANSPORT BUSINESS | madukovich’s cogitations https://madukovich.wordpress.com/2015/10/15/entrepreneurship-series-x-encore-minibus-transport-business/