A Logistics company stores and transport goods from one location or person to another. Most people refer to it as courier or delivery services instead of logistics companies. Still, it is a fast-growing industry in the country, so to be successful in the business, one must be adequately informed about the industry and its operations.
Transporting goods is a vital aspect of many businesses in Nigeria, both big and small, so if you plan to start your own logistics company, you are on the right track. It is a very profitable business and is not difficult to establish.
If you do not have any experience with starting this business, this guide will teach you in a few actionable steps how you can start and become a successful owner of a logistics company in Nigeria.
Get Adequate Training
Although the logistics business is not so complex to start, you need to gain some vital knowledge to stand out and provide exceptional services. What you need to learn may vary with the extent of your services and what you already know.
- Regulations and laws: you need to study and understand all the regulations and laws guiding transport businesses in Nigeria. This training may also depend on the type of company you plan to establish, whether international or local.
- Supply chain management: managing a logistics company comes with numerous tasks and operations requiring some expertise. So it would help if you learned how to plan the movement of goods among customers, retailers, distributors, and manufacturers.
- Warehouse management: another important aspect of running a logistics company is warehousing or storage of goods, so it would be best to learn about it. This way, you can ensure that goods are delivered the same way they were given to you.
There are many other courses you might want to take and some simple things to learn to run an exceptional logistics company in Nigeria. However, regardless of how you gain this basic knowledge, the main aim is to understand the business operations and how to become successful in them.
Choose a Niche
Focusing on one aspect of a vast industry may help you succeed faster and simplify your business operations.
So if you want to start a logistics company, you need to choose a niche; this will not diminish your chances of making profits from this business. Instead, it can help you reduce damage to goods as you will be able to transport or store goods of the same kind. Here are some of the niches you can choose when starting a logistics company.
- Food and beverages.
- Energy and petrochemicals.
- Health and pharmaceuticals.
- Consumer packaged goods.
Research Your Competitors
Now that you know the aspect of the logistics business to focus on, you need to find other companies that offer the same services. Study their mode of operations, pricing, and customer expectations.
This will help you understand the business thoroughly, and you will also be able to add some unique features and offers to your business.
Create a Business Plan
A business plan is the formal documentation of your business’s goals and objectives and how you plan to attain them. A good business plan will help you stay on track and make your business operations well-organized.
Some of the things you should include in your business plan are:
- A description of your company: your business plan should contain a detailed description of your company. This should include your business name, office location, and the name of the key people involved in the business. This description should also have the structure of your logistics company, such as sole proprietorship, partnership, or corporation, and the percentage ownership for each partner.
- State the business’s goals: in your business plan, you need to clearly outline what you plan to accomplish and give time limits for them. This is important because it will keep your business going and help determine its progress rate.
- Do market research: for people or major organizations to invest in your business, you will need to explain who your competitors are, what they do, and what makes you exceptional.
- Products and services description: in this section, you need to describe in detail how your services and products work, their pricing, your target customers, and your distribution strategy.
- Financial projections: explain how your business will generate enough money to repay the loans you may have taken to start the business or how to generate reasonable returns for your business investors.
- Marketing strategy: you need to make proper plans on how to get customers and retain them in your business.
- Executive summary: it is easier to write your executive summary last because it will contain an overview of everything your business entails.
Choose a Location
Since you have to move about and deliver goods or products at different locations, you might think your logistics company’s office location doesn’t matter; still, it does, and it is very important. So here are a few tips to help you choose a good location for your logistics company.
- If you plan to rent a place, ensure the rental terms are favourable and flexible.
- Ensure there is enough space outdoors.
- Consider closeness to your target market.
- Look for a building with higher ceilings and smooth floors.
- Consider easy access to main roads and traffic flow in the area.
- Lastly, consider access to railway stations, airports, and ports for easy pickups.
Register Your Business and get Licensing
Before you can start operating a logistics company fully in Nigeria, you need to register your business with the appropriate bodies and find out what licensing and permits you need to run such a business.
The Corporate Affairs Commission (CAC) is responsible for all business registrations in Nigeria, so you must register your business name before taking further steps to get the necessary licensing and permits.
The licensing and permits you may need for your logistics company are as follows.
- Memorandum & Articles of Association (MEMART).
- Stage carrier permit.
- Local government and interstate papers.
- Heavy load and cargo permit.
- License from NIPOST
Click here to know more about the licensing regulations for logistics companies in Nigeria.
Create a Brand
Branding is an essential aspect of every business in this digital age as it gives your business a unique identity and builds a strong relationship with your customers. Your brand should include your business name, unique colour combinations, and a logo.
You can use these colours in every aspect of your company, from fliers to website, staff uniforms, vehicle painting, etc. Your brand website should be integrated appropriately to give user-friendly one-stop logistics access to your services; your customers should be able to do and access almost everything through your website.
To successfully establish this business, you need to have good startup capital. You will need at least N500,000 to start and run a logistics company in Nigeria. Also, with your business plan, you can apply for loans and attract investors interested in funding your business.
In addition, it is important to create a separate bank account specifically for your business so you can track financial transactions as time progresses.
Read also: easy way to access microfinance bank loans
Purchase Equipment and Vehicles
Now that you have enough capital, you can start purchasing the equipment and vehicle you need for the smooth running of your company. Here is a checklist of everything you need to start your logistics company.
- Truck, bus, or cargo bike.
- Dispatch box.
- Computer system.
- Accounting and fleet management software.
- Mobile Phone.
The logistics business is profitable in Nigeria but also risky; you will handle a variety of goods that may be in large or small quantities and of different costs too. Moreover, accidents and damage to goods can occur anytime, so you need good insurance coverage for your logistics company.
Hire Drivers and Other Staff
Of course, you know you may not run every aspect of your logistics company alone, so you need to hire staff for your company’s internal operations and drivers to drive the vehicles you have already purchased. However, you must be careful when hiring drivers for your company, as many people might apply due to joblessness, not because they are good at the job. So here is a checklist to hire drivers for your company.
- Know the kind of vehicles your prospective driver can drive.
- How familiar are they with the environment and routes they will be driving?
- It would be best to access their previous driving records and health records.
- They should provide a copy of a road test certificate and driver’s license.
- Check if they can drive in all weather conditions and stay focused during long driving hours.
Market Your Services
Creating your unique brand has set a good foundation for business marketing. Now all you have to do is focus on reaching out to more people through social media, TV and radio adverts, billboards, and any other physical or digital means of public relations.
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Finally, there is no business you cannot establish and run successfully if you are dedicated and passionate about it. You must also be skilled, creative, and exceptional to stand out amidst many competitors. So if you have always wanted to start your own logistics company, there is no better time than now.
Congratulations if you have followed the steps in this guide to this point. If this guide was helpful to you and you would like to share your thoughts, kindly leave a comment in the comments section.