24 Jul 2022

Starting a Haulage & Logistics Business in Nigeria

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 Table of Contents

INTRODUCTION TO STARTING THE BUSINESS. 4

Self-appraisal for the business/Readiness for Entrepreneurship. 5

Pros & Cons of starting the business: advantages and disadvantages of starting the business. 6

Skills required to succeed in the Business e.g. Self-motivation skills, customer service skills, business savvy skills. 7

Technology Required for Business if any. 8

Branding. 10

Applicable Laws, Acts, Legislation. 11

Steps in Obtaining Applicable License where required. 13

Food and Beverages License in Nigeria includes:- 13

Licencing/ Certification: List all the types of licenses required and possibly who grants them.. 13

Develop a comprehensive Business Plan: State the full items that must be contained and the topics it will cover. 14

Plan Outline: 14

Choosing location. 14

Goals/objectives. 16

Insurance. 16

Hiring Process: HR process, getting the s. 18

Discuss the Sub-Sectors in the Industry: 18

Choosing market Niche (Specific business type) 18

Revenue Model for the Business. 19

Business Structure: Partnership, sole proprietorship, Limited Liability Company, PLC (state advantages and disadvantages of each chosen structure. 19

Registration steps for company staff according to CAC.. 22

Obtain a Tax Identification Number 22

Mistakes to avoid. 23

Equipment Required-Plant & Machinery (List) 23

Competitive players: Big player and small player 24

Name the Business: Offer tips on the name of the business including domain, name of the offer system. 24

Gross Profits Calculations. 25

Raising of Fund for the business/Sources of Funding /Financing the Business. 25

Recommendations for the business. 25

Call to Action. 26

Conclusion. 26

 

1.

INTRODUCTION TO STARTING THE BUSINESS

A Haulage and Logistics company is typically concerned with the transportation or conveying of goods from one location to another through the use of the road and sometimes through rail. It does this through the use of trucks, tippers, trailers, cars, lorries, motorcycles, trains, etc. advanced forms of logistics would involve the use of airplanes and the use of ships for logistics on air and water respectively. Anything that is touchable and can be moved or hauled is conveyed by the haulage and logistics company. Goods ranging from agricultural products to building materials are usually conveyed through haulage companies. Other kinds of goods that are moved or transported include; home appliances, natural resources, equipment and machinery, Fast Moving Consumer Goods (FMCG), petroleum products, furniture, etc. Whatever can be transported is hauled by the company. Manufacturing companies require the use of haulage to transport their goods from the place(s) of production or place of sale to customers, retailers, distributors, or even their warehouse. This makes the business to be a very lucrative one. The continued existence of companies that manufacture goods will make for the continued need to operate a haulage and logistics company. During relocation, when a person or a family is relocating from one city to another, most times it will require the service of a logistic company to carry some of its household items or even furniture and this continues to make the business a relevant and needed one. The haulage and logistics business falls under the transportation industry and it is a billion-dollar industry with an unsatisfied and insatiable market. The logistics sector is unarguably one of the fastest-growing industries in Nigeria, even though it is still emerging. Its estimation as of 2018 was 250 billion naira. This report was given by the 2018 Logistics and Supply Chain Industry report of Vanguard. There are three ways to operate as a haulage and logistics company. They include the following;

  • Operating as an Independent Haulage Company

A Haulage and Logistics Company may choose to operate as an independent company. It means that is solely responsible for directing its affairs and operations. The company will purchase its trucks, employ the drivers and be responsible for sourcing out jobs and haulage contract services. Here, you do not work or merge with anybody, you do everything alone, take all the profits, bear all the costs as well as the risks involved in the course of operations. The challenge involved in this kind of business operation is that of credibility. Before securing a contract, you will have to prove your credibility, hence many companies often prefer merging with another, it could be a booster to their credibility.

 

  • Operating as a Contractor or Sub Contractor

In this mode of business operation, you will be required to partner with a company that will manage your trucks as well as drivers. They will be in charge of the administration and management of your trucks; they will also be the ones to pay your drivers while they give you a stipulated amount of money at a stipulated time agreed by both of you. Where the terms of agreement and business mode of operation are properly implemented, you may simply need to just relax and watch your income come to you at the stipulated time. The amount that would be given to you would be subject to the age, type, and carrying capacity of your truck. The challenge here is that your company will be subjected to a set of terms and conditions which you would have to agree and abide by before it can be successful. There could be times when certain conditions may not be palatable.

 

  • Operating as a Leasing Company

Here, you simply lease your trucks to a haulage company and the profit will be given to you based on your agreement with the company. It is similar to the contractual type of operation but it is different in that in this option, you are still responsible for your trucks. You will need to service them and work on them should there be any need to.

The Vision for your business and financial capacity will decide on which operative pattern to adopt.

2.

SELF-APPRAISAL FOR THE BUSINESS/READINESS FOR ENTREPRENEURSHIP

 

 

 

 

Different groups of people patronize haulage and logistics companies for different reasons. These include companies, farmers of large products, families on relocation, people purchasing containers that need it to be carried to its place of use, petroleum companies, etc. Given the above, a haulage and logistics company must be prepared to meet the needs of its various target market, it needs to ensure its commitment to deliver excellently to its customers. The following should be considered: –

Customer Service

The customer service of the company should be always inviting to members of the public. The drivers of the company must be careful not to portray the company in bad light or do things that could hamper the goodwill of the company. He must have good gestures, not be arrogant or insulting to members of the public.

Service Standards

 

Haulage companies must set standards for themselves and be careful to follow them. They must also be careful to follow set standards as it concerns haulage and logistics in the country by the regulating body of transportation.  Service standards conjointly embody the rules for driving, logistics, parking, off-loading, etc.

Compliance

Top on the priority of labour laws is the adherence to the Health and Safety of the workers in the company. The company must ensure that its drivers are licensed by the Federal Road Safety Commission and that the license is renewed whenever it expires. Unlicensed drivers must not be allowed to mount the steering of the vehicles because it could be dangerous to the safety of pedestrians.

Teamwork

The members of staff of the company must work together. Where the company has many drivers which is often the case, they must avoid being at loggerheads with each other, the members of staff that sit in the office must not be found arguing with the drivers or other members of staff. Respect and Cooperation must be the driving forces behind what powers the modus operandi of the company.

Pros & Cons of starting the business: advantages and disadvantages of starting the business.

PROS:

  1. With the right strategy and organized business operation, you could improve the customer experience.
  2. You’ll get recommendations from customers based on your ability to deliver excellently.
  3. You will be able to optimize operational costs in the business as your experience grows
  4. There is a high profit to be earned from the business. You will have a boost in profitability.
  5. You will have the opportunity to deliver excellently and with greater productivity to your customers
  6. You will be able to plan your routes intelligently as you tow the roads often.
  7. Good Communication between your clients and drivers.
  8. On a lease or contractual basis, you relax and watch your truck earn for you.

CONS:

  1. Rate of accidents in the industry is usually high owing to bad roads and this is a major disadvantage because it could lead to loss of life, damage to the truck as well as damage to the goods being carried.
  2. Customers can be disappointed and this can affect the goodwill of the business should there be any delay in transportation of their products or goods.
  3. Many drivers tend to be shrewd and unreliable as they carry out their duties, this can run down the business and make you operate at a loss if not well managed.
  4. There is a high cost of maintenance and fuelling of the trucks since these trucks are prone to damage by constant use and the amount of fuel or diesel needed for them to get to their destination is much
  5. This business is highly capital intensive along with the risks involved in it.

Skills required to succeed in the Business e.g., Self-motivation skills, customer service skills, business savvy skills.

 

Owing to our multiple business engagements within and around industries of this kind, a list of top skills needed is given below;

 

  • Engineering Skills

The company will require a mechanic or engineer that will be in charge of servicing the trucks and vehicles of the haulage company. It needs a trusted person who will either be on its payroll or someone that would be hired on a contractual basis. This engineer must be competent to understand the trucks and how they function to ensure the proper functionality of the automobiles.

  • Organizational Skills

For the general work populace and especially for those at the managerial level, the ability to organize is highly needed in an industry like this. Owing to the delicate nature of the industry, it is good that a person who knows how to organize the various arms and departments of the company is employed to get more returns as a result of the good and skillful organization of man and material resources.

 

  • Customer Service Skills

As earlier mentioned, the members of staff especially the drivers and logistics agents that liaise with customers are required to be friendly, nice, and humane in their dealings with members of the public. They must possess the right skill to make sure that customers do not get unnecessarily angry, agitated, or irritated over an attitude or behaviour of any member of staff.

 

  • Driving Skills

Driving is the core of this business. It is the pillar that holds and ensures the success of this company. It is expected that competent and licensed drivers should be hired. They must not be reckless or people with unstable emotions as it could affect their mannerisms and attitude on the steering.

  • Employee Relations

Every business establishment requires good employee relations within it to foster unity. Just as you need to have good customer relations, the same is equally needed for the employees.

Technology Required for Business if any

Technologies and technical know-how for companies within the industry will include the following;

 

  1. Automation

There seems to be an improvement in automation in haulage and logistics as warehouse management seems to have paved the way for Artificial Intelligence and Robotics. Without needing human involvement, self-driving cars and self-driving fleets of trucks navigate their way between a warehouse and a customer. This automation could help increase efficiency in transportation as well reduce accidents and ensure swiftness in the delivery of products.

  1. Truck Platooning

In Truck Platooning, vehicles are linked in proximity with one another using automated driving support systems. This could help save cost as trucks will be made to drive at a speed that is constant though lowering fuel consumption and ensuring reduction in the emission of carbon dioxide. This occurs in such a way that a driver pilots one truck usually the first truck and other trucks behind move as in a convoy fashion without drivers but moving near the first truck.

  1. Electric/Hybrid Buses

Technological advancements in transport and logistics include the use of electric and hybrid buses. It is part of the need to use an alternative source of fuel that these kinds of buses are used. Many of the buses and vehicles use diesel which increases CO2 emissions. Countries of the world have begun investing in electric and hybrid means of transportation and logistics.

  1. Data Analytics

Where there are massive volumes of data, data analytics would be required to have an improved understanding between the consumer and the market at a greater scope and a higher level. Data analytics will help the company to plan efficiently in its operations, processes, and strategies as well as ensure that they are poised to deliver accurately to the needs of consumers. It creates a deep understanding of consumer market and process data and helps to create grounded and highly rewarding user experiences.

  1. Blockchain

Within the haulage and logistics industry, blockchain has gained dominance and popularity in the last few years. It ensures that large amounts of valuable information are recorded and encrypted with safety and transparency. It helps in the safekeeping of logistics operations as a digital transaction ledger. It helps to prevent documentation fraud and hacking of system data while making sure that the record is highly organized.

  1. Vehicle Management. Where the company is operating independently, it needs to manage its trucks and fleet of vehicles. It could outsource or contract to another company in charge of fleet management or it does so itself. Whichever is the case, management of the vehicles is highly needed. Regular servicing and maintenance are very necessary. The garage where the vehicles are parked will also have to be managed ensuring it is free from harmful objects, scattered motor parts needing repair or change, etc.

 

Branding

What you should do:

  • Have an approach to your logistic operation that shows it as part of a cohesive line, strung by core complete traits and values of your business., you would want a brand that wholistically defines who you are and what you do.
  • Develop a unique brand that embodies the totality of your haulage and logistics operations which should be different from other companies in the industry.
  • You would need to outline a systematic way of gaining visual representation in the industry making yourself visible for those that need your services to patronize you when needed.

Make Investment in a branding system that is highly visual and unique to give you the best reach

What you should do:

  • Have a consideration of trying to gain an increase in complete identity by developing extra graphics that is tightly grounded in your core complete identity.
  • Ensure consistency in the use of the developed branded graphics to further your visual language for your audience. This is highly important. A graphic that is customized to your logistic brand will make you easily identifiable whenever that logo or graphic is seen.
  • Use your visual branding system to access clients through all contact means available. (Website, product packaging, email, ads, etc.) to extend recognition.

Share your authentic story as it appealing and arresting to the attention of the customers’

What you should do:

  • Share your authentic story to the audience which should be captivating.
  • Ensure to feature your authentic and captivating story visibly on your business website as you deliver products for clients. Take pictures of your buses and trucks, places of delivery, and other things needed to boost your brand.
  • Try to advertise on your trucks. Where the trucks are yours, do a graphic or logo on the trucks to aid the advertisement, marketing, and branding of your logo.

Regulatory Bodies of the Industry

The ministries of Transportation and Communication are broadly responsible for haulage, logistics, and courier services. However, other bodies also regulate logistics especially as it concerns air and water.

The Following are other regulatory bodies that regulate haulage and logistics operations in Nigeria;

  1. Standard Organization of Nigeria (SON)
  2. Nigeria Customs Service (NCS)
  3. National Agency for Food & Drug Administration & Control (NAFDAC)
  4. Nigerian Ports Authority (NPA)
  5. Federal Inland Revenue Service (FIRS)
  6. Nigeria Agricultural Quarantine Service (NAQS)
  7. Nigeria Shippers Council (NSC)
  8. Nigerian Export-Import Bank (NEXIM)
  9. Nigeria Export Processing Zone Authority (NEPZA)
  10. Nigeria Immigration Service (NIS)
  11. National Insurance Commission (NAICOM)
  12. Central Bank of Nigeria (CBN)
  13. Department of Petroleum Resources (DPR)
  14. SON Conformity Assessment Programme (SONCAP)
  15. Pharmacist Council of Nigeria (PCN)
  16. Federal Airports Authority of Nigeria (FAAN)
  17. Nigerian Marine Administration and Safety Agency (NIMASA)
  18. National Export Promotion Council (NEPC)
  19. National Environmental Standard and Regulations Enforcement Agency (NESREA)
  20. Corporate Affairs Commission (CAC)

The Courier and Logistics Services (Operations) Regulations 2020 is the regulatory framework needed to enhance the operations of couriers and logistics in Nigeria.

The following are excerpts from the regulation you need to know as it concerns haulage and logistics;

The instructions provided in these regulations apply to already licensed companies and those seeking a new license.

The Regulations provide the following definitions for courier and logistics:

Courier: “door-to-door time-sensitive and secured service and includes delivery of documents parcel, merchandise, cargo whose total weight is not less than 0.5 KG and not more than 50KG”

Logistics: “services which include haulage, conveyance, dispatch or delivery of items or goods weighing not less than 50kg”9.

The objective of the Regulations is to “provide a regulatory framework for effective and efficient Courier and Logistic Services licensing processes and procedures and the regulation of the Courier and Logistics industry in Nigeria

To achieve this objective, the new regulation provides for the following categories of licenses:

Category License Fee (N) Renewal Fee (N) Scope of License
International Courier License 20,000,000 8,000,000 Logistics services across international borders
National Courier License 10,000,000 4,000,000 Logistics services nationwide
Regional Courier License 5,000,000 2,000,000 Logistics services within a geo-political zone in Nigeria e.g. south-west geo-political zone
State Courier License 2,000,000 800,000 Logistics services within a State
Municipal Courier License 1,000,000 400,000 Logistics services within a particular city
Special SME Courier License 250,000 100,000 For Logistics services that operate within a particular city and having not more than 5 motorbikes/motorcycles

 

 

 

The following are also needed to run a successful Haulage and logistics company in Nigeria;

  • An application letter to the Permanent Secretary of the Ministry of Interior.
  • Certificate of incorporation obtained from CAC.
  • A copy of CAC forms showing statements of share capital structure and particulars of shareholders and directors.
  • Memorandum and articles of association of the company which will be filed with FIRS
  • Tax Clearance Certificate of the registered company from Federal Inland Revenue Services.
  • Evidence of acquisition of business premises (Lease Agreement or C of O).
  • Feasibility report and Project Implementation Programme (Business Plan) (should be certified or registered with CAC as written by a professional management consultant)
  • Registrations with the state inland revenue service for necessary tax payments like PAYE

Licencing/ Certification: List all the types of licenses required and possibly who grants them

  • Corporate Affairs Commission – CAC Certificate
  • Federal Inland Revenue Services – Tax Certificate and VAT Certificate
  • Interstate and Intrastate Registration Papers
  • Stage Carrier Permit – Lagos State Road Traffic Law (for Lagos state only)
  • License from Courier Regulatory Department of NIPOST (For Courier and Logistics)
  • Drivers License- Federal Road Safety Corps (FRSC)
  • Motor Vehicle License
  • Registration with Trade Unions

Develop a comprehensive Business Plan: State the full items that must be contained and the topics it will cover.

Plan Outline:

  • Executive Summary
  • Company Summary
  • Products
  • Market Analysis Summary
  • Strategy and Implementation Summary
  • Management Summary
  • Financial Plan
  • Appendix

Choosing location

The choice of a location for the haulage and logistics company matters greatly especially as it plays a major role in determining the effectiveness and success of the company. Where the company has more than one truck, which is most likely the case, then provision or arrangement for a parking lot for the trucks, tippers, and trailers should be considered. Ample space where the trucks can twist and turn conveniently because of their body size should be given. The state of the road where the park is located is also very important. Vehicles used for haulage many times are such that have very big tires (though not in all cases) and these tires do damage to roads especially where the roads are already bad, so the parks should be sited at places having good roads with easy accessibility

Goals/objectives

  1. To ensure that goods are carried and delivered as and when due
  2. To be the leading logistics and haulage company in Nigeria through the use of excellent vehicles and competent drivers.
  • Income generation for the haulage company. This is so because the sole aim of any business is profit maximization and revenue generation. It is also aimed at job creation.
  1. To ensure reduction in the accidents and breakdown of delivery vehicles on the road.
  2. To establish other bases and offices in other parts of the country other than just the city of start-up.
  3. To maximally utilize our delivery channels and boost revenue for the company.

Insurance

Haulage and logistics is a very risky business line to tow which means that of necessity it must have certain insurance. Many ugly stories surround the haulage of goods, especially petroleum products where the tanker catches fire or falls or bends and the petroleum product spill. There have also been instances where not only petroleum products but also other products as well had either been lost on transit or some form of damage occurred making the transported well to go bad. It is because of these and many more that these companies of necessity must have insurance because of the risky nature of their operations.

Other kinds of insurance include:

  • General and product insurance: this insurance provides indemnity for any legal actions taken against a haulage and logistics company for third-party injuries or harm to property ensuing from products conveyed by the company and is provided sometimes as alternative activities.
  • Directors’ & Officers’ insurance: this protects the non-public assets of the company administrators and officers within the event that they in person are sued by workers, vendors, competitors, investors, customers, or alternative parties, for actual or alleged wrongful acts in managing a corporation (Side A). The insurance will give indemnity to the corporation or company for the indemnity they supply to the director and officers (Side B) and conjointly indemnity to the corporate for security category actions (Side C).
  • Crime insurance: this covers the theft of cash and goods of the company or other products.
  • Marine Transit insurance: this insurance provides protection or seeks to indemnify the transportation of the factory-made product, raw materials plant, equipment, and alternative assets. This insurance covers products that are transported at intervals in the country of domicile and conjointly imports and exports.
  • Motor Vehicle Insurance: this provides cover for any vehicle owned or chartered by the corporation.
  • Corporate Travel insurance: covering workers traveling interstate or overseas on company business or assignment.
  • Cyber insurance: This is vital coverage that haulage and logistics companies need to contemplate as they leverage more and more on technology in their business models and regular operations. A cyber-attack will considerably impact your organization negatively.

Hiring Process: HR process, getting the staffs

At this stage, you are now ready to employ the people that will work in your company. A haulage and logistics company will require the following for its operations;

  1. Drivers/Delivery Agents
  2. Motor Technicians/Engineers
  3. Human Resource Personnel
  4. Office Assistants
  5. Logistics Supervisor
  6. Marketing/Admin Personnel
  7. Transport/Logistics Manager

 

Discuss the Sub-Sectors in the Industry:

Subsectors in the industry include the following;

  • Logistics Services
  • Air and express delivery services (EDS)
  • Freight Rail
  • Maritime
  • Trucking`

Other Subsectors would include

  • Liquid Logistics
  • Courier and Express Services
  • Warehousing-Storage and Packaging
  • Port Terminals
  • Cold Chain Logistics Solutions
  • E-Commerce
  • Supply Chain
  • Inland Waterways and Marine Services

 

Choosing market Niche (Specific business type)

  • Automotive
  • Chemical and Plastics
  • Industrial and Manufacturing
  • Government and Defence
  • Energy and Petrochemicals
  • Consumer Packaged Goods (CPG)
  • Furniture
  • Food and Beverage
  • Appliances
  • Electronics
  • Health, Pharma, Life Sciences
  • Retail and Commerce

Revenue Model for the Business

The revenue model could differ from region to region just like the business plan or model for operation. Before diving into the revenue model, it is important to take a look at the business environment and make decisions from there.

For this business, the revenue model can vary as the company may get revenue by operating on a lease arrangement with its trucks, it could choose to sub-contract or it may choose to operate independently.

Business Structure: Partnership, sole proprietorship, Limited Liability Company, PLC (state advantages and disadvantages of each chosen structure.

Having the right business structure is vital to business success. It will also affect the business when it comes to filing of tax, borrowing of funds, the attraction of investors.

Types of Business Ownerships to choose from

Sole Proprietorship

Sole Proprietorship in haulage and logistics would imply a structure where a person decides to operate independently as a single person. He owns his trucks and pursues haulage or logistic contracts as a single person. He does not partner with anybody.

Pros of Sole proprietary

  • Sole proprietorship is the cheapest business structure to run.
  • The sole owner has complete management over the business, he or she dictates what happens in the business.
  • The business is taxed as a part of the owner’s taxes, thus there is no possibility of having double taxation.

Cons of Sole proprietary

  • There is no legal separation between the owner and their business, meaning that the person will be blamed for all the debts and financial obligations incurred by the business.
  • It’s difficult to attract investors to invest in a sole proprietorship business.
  • The business tends to be mismanaged by the owner since he is the only one involved in the management of it.

Partnerships

A partnership is a business structure that involves two or more people involved in the management of a business.  Contribution is made by all the partners either by bringing capital together or by their experiences and connections. They also share profits and losses. It is similar to sole proprietorships in the sense that it is not a separate entity from its owners. The partnership is not taxed but the income of the partners is taxed.

Pros of Partnerships

  • Partnership is cheap and easy to operate especially when the partners are few.
  • Partners share finances, and every individual invests within the success of the business, relieving the burdens that a single person faces in a sole proprietorship.
  • Usually, partners bring different skills and areas of experience to the business.

Cons of Partnerships

  • Similar to sole proprietorships, there’s no legal separation between the business and therefore the partners suffer private liability for the business in the eventuality of business failure or debt.
  • Disagreements among or between partners can have a bad effect on the smooth operations of the business.
  • It may take a longer time before certain decisions are taken and implemented because of the bureaucracies involved especially where the partners are many.

Limited Liability Companies (LLC)

A Limited Liability Company is a business structure where the owners of the company are different from the business. Here the company is a legal entity that can sue and it can be sued. The owners of the company are personally protected from debts and liabilities of the business.

Pros of Limited Liability Companies

  • Members are protected against personal liability for any business financial obligations or debts that are incurred.
  • The owners control the business directly. Hence, can make decisions easier and faster.
  • There are fewer restrictions on profit-sharing in an LLC, and members will distribute profits from the business as they think is appropriate.

Cons of Limited Liability Companies

  • Oftentimes, once a member leaves an LLC, the business dissolves, and therefore the remaining members are left with the burden of fulfilling all remaining obligations either to continue to run the business or shut it down.
  • Members are thought of as freelance and should pay the self-employment tax contributions.
  • The entire profits of the LLC are subject to self-employment tax.

PLC COMPANIES

This is a business structure that is often called a corporation. It is a freelance entity that’s taxed singly from its homeowners. This kind of business structure is formed by people who constitute shareholders and are given stock when they invest in a corporation. By law, PLC companies should have assets of ₦10 million or more.

Pros of PLC companies

  • The corporation acts as a separate entity; therefore, shareholders’ assets are protected against any of the business’s debts or legal actions.
  • Corporations will simply raise funds through the sale of stocks.
  • Taxes will be filed singly from the private taxes of the corporation’s homeowners.

Cons of PLC companies

  • Corporations are difficult to operate as there are bureaucracies involved.
  • Sometimes, companies are likely to be taxed twice. Once the corporation makes a profit and when dividends are paid to shareholders.
  • There is extra work to fill out as a result of companies being extremely regulated by federal, state, and native agencies.

Steps in Registration of the Business at Corporate Affairs Commission

  • Step One – Public Search: Search for business entities already existing
  • Step Two – Reserve a Name: Submit a Business Name you prefer
  • Step Three – Pre-Incorporation: Register a Company with Your Name Availability Code
  • Step Four – Post-Incorporation: File Changes to Your Existing Business

Registration steps for the company according to CAC

  1. Check for the availability of the proposed company name you have chosen
  2. Complete pre-registration form and upload relevant documents (Online using Company Registration Portal)
  3. Pay filing and Stamp duty fees.
    • Now registration is end-to-end on the COMPANY REGISTRATION PORTAL (CRP)
    • with electronic Certificate of Registration and Certified Extract of Registration information

Obtain a Tax Identification Number

HOW DO YOU APPLY?
To apply for VAT, you will need to go to the Federal Inland Revenue Service (FIRS) office that is closest to your registered address. The following documents should be provided: –
1 Memorandum & Articles of Association
2 Certificate of Incorporation: CAC2, CAC7
3. Duly filled and officially stamped VAT form 001
4 Utility bill
5. Application letter on company letter headed paper

If your business is a registered business name, and not a limited liability company then you will need to provide the following documents;

1 Business Name Registration Certificate
2 Duly filled and officially stamped VAT form 001
3. Utility bill
4 Application letter on business letter headed paper

You should take the original copy and 2 photocopies of each document. The originals are required for sighting only. 1 copy will be left with the FIRS, and 1 copy will be stamped and signed by an official of FIRS as evidence that you have made an application.

Mistakes to avoid

  • Disregarding customer’s feedback
  • Unprofessional customer services
  • Wrong Marketing strategies/ moves
  • Poorly serviced Vehicles
  • Unlicensed Drivers/Vehicles
  • Incompetent Employees

Equipment Required-Plant & Machinery

Competitive players:

  • GIG Logistics
  • Courier Plus Services Limited
  • FedEx Nigeria
  • Cross Country Courier Services
  • Creseada International Limited
  • DHL
  • United Parcel Services Limited
  • XPO Logistics

Name the Business: Offer tips on the name of the business including domain, name of the offer system.

  • Choose Your Market Niche
  • Conduct adequate and proper Market Research
  • Prepare a good and well detailed Business Plan
  • Ensure registration of your Business
  • Buy Vehicles, Motorcycles, etc for your company
  • Get customers which goods you will be hauling depending on your niche
  • Be Sure to Maintain your trucks
  • Hire Staff

Cost of Starting a Haulage and Logistics company In Nigeria

NOTE: Starting a company of such in Nigeria might cost between ₦20,000,000 to ₦25,000,000 on a minimum startup cost.

Gross Profits Calculations

To get your gross profit calculation, you will need a service of an outsourced accountant or let your in-house accountant conduct proper financial statement preparation.

Raising of Fund for the business/Sources of Funding /Financing the Business

To raise funds or to do an analysis of the capital structure of this business in Nigeria, it is mainly done through commercial bank funding for a majorly long-term duration. Sometimes, some angel investors can buy the idea of the business owners and invest in the business.

If the business has taken off and is now a listed company on the stock exchange floor, members of the public can subscribe for shares in the company.

Bootstrapping (self-funding) is another major source of capital for this kind of business as it will give it much leap. Funding (capital firm investing for exchange of equity) some investment companies give out money for business too as discussed above. Other means are: –

  • Savings
  • Private Equity
  • Friends/Family

Recommendations for the business

Anyone having the capital required is highly advised to venture into this business, having done the proper checks one needs to do. There are already existing companies of this nature but much more is still required. We highly recommend you do this business but please ensure that insurance is done as well as proper registration also carried out.

Call to Action

For swift and timely action to be taken, you need to contact us on 08023200801 or email us on our website email link. We are always available and visible at 5 Ishola Bello Close, Off Iyalla Street, Alausa Ikeja. You should contact us for in-depth analysis, market knowledge, and business plan breakdown for your business.

    Conclusion

    The basics of commencing a haulage and logistics company have been discussed adequately in this article. The prospects, the policies, branding, means of financing, applicable legislation governing the business, competitors, etc.

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