Logistics business in Nigeria these days is the lifeline of small businesses. This because good and products are sold every day and transportation of such goods from the seller to the customer are necessary. Have you been searching for how to start a delivery business in Nigeria?
This article contains a full guide on how to start a logistics business in Nigeria. But before we get started let take a look at how profitable a logistics business is.
Is a Logistics Business Profitable in Nigeria?
Many entrepreneurs who are looking for how to start a logistics business in Nigeria are fond of asking if it is profitable.
The truth is that the logistics business is very profitable especially with the right strategies and experience. Remember almost all businesses needs a logistics company to transport goods to their different customers. With the advent of technology, there are also a lot of e-commerce stores that employ the services of a logistics company. Not only that food and other large companies also make use of delivery companies.
This means you can have as many as 50 deliveries in a day or more depending on the number of customers you have. And you can charge between N500 to N1000 or more depending on the size of the package and the destination. With this type of business model, making up to N500,000 in a month is possible.
All you need is to employ the right strategies, do the work and be consistent. Below are the steps you need to set up a successful logistics business in Nigeria.
Steps to Set up a Successful Logistics Business in Nigeria
1. Make your Research and Plan your Business
There are many popular logistics companies in Nigeria that you can model and research what they are doing. The likes of CourierPlus services, GIG logistics, Ocean logistics, and so on. This is not to say you should copy them but you need to understand and learn how they conduct their deliveries.
Once you have done this, the next step is to consider your budget and the mode you want to use to operate. Are you going to run your delivery company with delivery bikes or buses or even trucks? What type of businesses do you want to run errands for? Are you doing intra-state or inter-state delivery?
Decide about your business and what you intend to achieve with it. After deciding, you can then proceed to put it on the paper. Craft your business plan or seek the help of an expert to do so on your behalf.
2. Gather the Funds
After crafting your business plan, the next thing is to gather your capital. To start a logistics company in Nigeria, you will need up to N300,000 or even more to get started. Depending on the level you want to operate, you will need to buy some equipment to set up your equipment. Some of which include buying a bike or bus, phone or laptop, renting an office, and so on.
That is where your business plan will be useful, you can submit it to investors to seek funds. Get loans from family and friends or even banks or cooperatives.
3. Buy the Equipment and Resources
Once you have got the fund, the next thing is to invest in that equipment and resources. Below are some equipment needed to start a logistics business in Nigeria.
Equipment Needed to Start a Logistics Business in Nigeria
1. Cargo Bike or Bus or Truck
Depending on what you plan for your business, you can get any of these whether bike, bus, or truck. In case you are leaving in cities with too much traffic like Lagos, you can consider buying a Cargo bike first and later by others. Cargo bikes are motorcycles with a plastic container fit at the back.
2. Mobile Phones or Laptop
Mobile phones and laptops are also part of the equipment you need to set up your logistics business in Nigeria. You can buy a phone for yourself to tracking orders. And not only that, it will be needed by other staffs you hired like the driver or the customer representative.
3. Rent an Office Space
To succeed in setting up your logistics company, you need a lot of packaging as well as branding. Some business owners will always want to bring their goods to your office directly. Hence, you need to rent a spacious office space for your business.
Although you can start without an office at first and when you make enough profit, use it to rent an office.
4. Employ Staffs
Starting a logistics business in Nigeria requires you to employ at least a staff. You will need the service of a driver, social media manager, or customer care representative as well as a store manager.
Meanwhile, you can decide to be your driver to understand how the delivery works. And later employ another when you are capable. Drivers are one of the important parts of the delivery business in Nigeria, ensure you employ the right ones and give them training on how to make delivery and deal with customers.
Not all logistics companies in Nigeria have a website but it is one of the necessary things that can make you stand out. Create a website to connect your company and your customers if you can afford it. You can seek the help of an expert or build it yourself.
This is the least overlooked but important equipment necessary in setting up a logistics business in Nigeria. Keeping records of goods and customers is important. So, you will need materials including pens, books, and so on to keep accurate records.
4. Registration and Licensing
Setting up a successful logistics business in Nigeria won’t be complete without the necessary registration. Even though as a small business that is just starting, you can postpone your registration till you gather enough profit.
Ensure you register your business with the Corporation Affairs Commission (CAC) to legalize your business. Obtain the necessary permit or license from the appropriate bodies also.
5. Promote Your Business
Advertising is an important aspect of setting up a logistics business in Nigeria. Irrespective of the structure you have put into place, without enough customers, you may not make any profit. Promote your business through different means to acquire customers.
You can do this by creating a signboard at the front of your office, make business cards, flyers and posters. Ensure you invest heavily in social media marketing as many of your target audience is online. Have a huge presence on social media sites like Instagram, Facebook, etc. Invest in Google ads and others.
Referral and word-of-mouth marketing also helps a lot. Ensure you provide quality services to your customers and ask them for referrals after.
Setting up a Successful Logistics Business in Nigeria
As much as the logistics business in Nigeria is profitable, it also has its challenges. Some of which includes delay due to traffic, customers not picking up, spoilt goods and so on. But with good strategy, determination, and consistency, you can overcome all this.