ENTREPRENEURSHIP SERIES (VII): THE MINIBUS TRANSPORTATION BUSINESS

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.

HIJET CARGO DAIHATSU MINIBUS
HIJET CARGO DAIHATSU MINIBUS

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.

THE MAIN BODY AND ENGINE OF THE DAIHATSU MINIBUS IS SHIPPED INTO NIGERIA LIKE THIS.
THE MAIN BODY AND ENGINE OF THE DAIHATSU MINIBUS IS SHIPPED INTO NIGERIA LIKE THIS.

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.

THIS IS WHAT THE DAIHATSU MINIBUS LOOKS LIKE AFTER COUPLING THE PARTS TOGETHER.
THIS IS WHAT THE DAIHATSU MINIBUS LOOKS LIKE AFTER COUPLING THE PARTS TOGETHER.

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.

THE DAIHATSU MINIBUS SPRAYED IN THE COMMERCIAL BUS COLOURS ASSOCIATED WITH PUBLIC TRANSPORTATION IN LAGOS, NIGERIA.
THE DAIHATSU MINIBUS SPRAYED IN THE COMMERCIAL BUS COLOURS ASSOCIATED WITH PUBLIC TRANSPORTATION IN LAGOS, NIGERIA.

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!

‘kovich

NB.
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/

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50 thoughts on “ENTREPRENEURSHIP SERIES (VII): THE MINIBUS TRANSPORTATION BUSINESS

  1. Thumbs up brother. Your explicit analysis here is unputdownable. So much on target and in fact, I’m now encouraged to stake an interest in this sector of entrepreneurship. I personally felt earlier that it’s a no go area for me but my eyes can now see better.

    Kindly, keep up the good work. You’ll receive rewards here on earth and again, in the world beyond.

    Liked by 1 person

  2. Nice Info, I have been wanting to do this business but I need a trusted dealer to buy from. I won’t mind if you can direct me to one. What’s your e-mail address so I can reach you through your mail. Thank you

    Like

  3. Hi kovich,
    Thanks for the detailed information .
    I recently started noticing the minibus as I travelled to Anambra . Can the buses be used for private use? What is the fuel consumption rate and how durable is the minibus as I will love to use it for school runs mostly for my kids.

    Like

    1. You’re welcome Adamma,

      The bus can definitely be put to private use, just like you would any other vehicle, infact without the last seat placed by commercial drivers it has capacity for goods should you desire to use it for haulage purposes.

      As with any Asian vehicle of which this is one, it is quite fuel economical.

      As for durability, that depends on the one handling it, and the state of the roads on which it is driven. For commercial use, about 2 years is more likely when it works optimally, before a few things begin to need repairs and replacement, though the engine usually remain okay for longer.

      One thing I know many commercial drivers do, which you may like to explore may be to change (or request from the onset, at the point of assembly that) the tyres from the narrow ones that comes with it to the wider ones, which with proper wheel balancing makes it more stable on the roads.

      I hope this helps.

      Liked by 1 person

  4. Fantastic job Oga Madukovich! Though very slight changes has happened due to timing(since june) and demand. Those importers are not smiling again o. It is well sha.

    Like

    1. I am aware of the availability of a minibus for HIRE PURCHASE, but it’s not automatic.

      Also, it has been partly driven so taken it on means you pay less, than when you have to pay as with a new Hire Purchase Regime.

      Like

      1. Pls I need a manual mini bus for drive and own,3plugs precisely,suzuki carry 13.full paded.for hire purchase,well compacted,to use also for private runs within ajah.my no 08029503976.micheal.

        Like

  5. I have a Toyota previa mini bus (manual transmission) for higher purchase or weekly delivery,if you’re a driver feel free to contact me on 08139644880

    Liked by 1 person

  6. Its really good to read through your site sir and I must commend your effort. Please I am in need of a hire purchase mini bus and I need your assistance, I will drive it personally and am willing to comply with the necessary agreement, paying weekly. Am interested in this as urgent as possible, my phone number is 08092743387 and my email address is fusscker@yahoo.com Thanks.

    Like

    1. Thanx for your nice words about my site, I am grateful.

      Unfortunately, at the moment I do not have a minibus up for hire purchase, but if it comes to my notice that someone needs a driver, I’ll make your digits available.

      Like

  7. Dear sir,please I need manual gear Suzuki mini bus hire purchase for transportation in my area I live in bariga Lagos state my contact number 08035808936

    Like

    1. I’m sorry Mr. Hakeem, presently I don’t have the specs you require for Hire Purchase.

      I do however have a used manual gear Daihatsu minibus, not for hire purchase though, but for outright purchase if you like.

      The engine is fine, but with fuel injector problem.

      You might also have to do some panel beating, and repair the sliding door on the right side.

      If you’re interested, the asking price is ₦320,000.

      Like

  8. Hello Kovich.

    Really interesting piece here. More grease to your elbows. The price since this your write up has skyrocketed. Meanwhile I’m interested in getting a Toyota hummer bus or any other bus of similar performance. Please I’d like a cost analysis for inter-state commercial use. You can holla me back at my email add: wordaz@yahoo.com.

    Cheers

    Like

    1. I’m sorry Hakeem, at this point, only a sale will do for this minibus. If you want hire purchase, you can be linked to one by any of the drivers in Bariga, even with new buses.


      THE MINIBUS PARK BESIDES BARIGA MARKET BY FIRST BANK

      I am sure that they’ll be of immense help if you approach them.

      Like

  9. Its well with u Mr. Kovich. Am contemplating on starting dis business before d end of dis month, but I only have 2 Q’s for u: Pls what is d current price of dis Suzuki minibus And what could be d new returns per week? God bless u.

    Like

    1. Thank you Onyekachi, for your kind words. The Suzuki minibus costs roughly about ₦800,000 now, with returns of ₦25,000 weekly, at ₦1,500,000 Hire Purchase over a period of 1 year. Any variations that exists is about and around this range.

      Like

  10. I have a mini bus diahatsu hijet 2000 model converter, painted lagos color, registered for hire purchase. I need a reliable and trust worthy person to give it to.

    Interested person should contact me 08098157574. The agreement will be done with my lawyer.

    Like

  11. This piece really educated me.Thanks. Pls can you give me a contact in Ladipo whobcan guide me on how to go about getting a mini bus.Thanks again….

    Like

    1. Unfortunately, my contact at Ladipo is no longer there, and I haven’t been there in a long time, neither did I establish a relationship with another dealer.

      You could go to Ladipo and develop your own relationships with the many good men plying their trade of vehicle assembling there, I believe they’ll make you a great deal.

      Like

  12. Dear sir,how is family? I have been sending you series of message on your website about. mini bus for hire purchase but have not get through answer to my request but am still interested if there is a new better development I will be appreciate may God bless you thanks

    Like

    1. Hello, I haven’t contacted you before now because the minibus that’s on ground now is out of order.

      Except you want to put it in order, or outrightly buy it and repair for your use, then we can discuss.

      Like

  13. As a graduate and a local govt staff in Nigeria who had not receive salary for the past eight months, l considered it appropriate to utilize the driving training l had to embark on transportation business to enable me be self sufficient and also become an employer of labour in the nearest future. Please, enlighten and help me out. Thanks.

    Like

  14. Uncle Kovich, While thanking you for your enlightened talk and assistance, pls; may l know the cost of the “out of order minibus” that is presently on ground? In your considered opinion, what is the likely cost of repairs to put the vehicle on the road again? Awaiting your anticipated prompt respose please. Thank you.

    Like

    1. Well, the cost for the out-of-order minibus is ₦200,000, and considering inflation with the recession and skyrocketing price of things in the market, I’ll put the likely cost of repairs to be between ₦250,000 & ₦300,000.

      Like

      1. Thank you for your prompt response to my last message. Uncle! if the cost of repairs, according to your assessment stands between #250,000 and #300,000 in line with the current inflationary trend, please, what do you considered to be the intended benefits derivable from the “out of order minibus” for that sum of #200,000, especially now that it is you who knows the true condition of the grounded vehicle. To help me out as I expressed above, at what beneficial price would you like to give the grounded vehicle to me to enable me start the intended transportation business? I awaits your anticipated positive response to let us engage in further negotiation please. Thanks.

        Like

      2. The cost of repairs wouldn’t have been that much had it not been for the recession, and the accompanying skyrocketing of prices of goods and services, including those of parts to be replaced, changing the tires, panel beating and the likes of what you’ll spend to put that bus back on the road.

        The cost of purchase and repair, at the hands of a trusted mechanic, pales in comparison to the yield, again at the hand of a trusted and committed driver, if you decide to place it on higher purchase, with the current rates of commuting, compared to when you have to buy a newly assembled fairly used one at Ladipo.

        Like

  15. Am so glad for this wonderful information. please i need to know the cost of the mini-bus currently now please.bcos am interested to buy. the one of 200,000 has it been sold, if not how can i contact you. my contact; 08068585743

    Like

    1. Minibuses go for about ₦800,000 now, but the fairly used one is still available for ₦200,000 if you’re interested, but you should know that it needs repairs and servicing.

      Like

      1. Sincerely, I do not know how you’ll get it in Uyo, since I do not know the terrain there, but in Lagos now the going price is about a million Naira.

        Like

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