How to start a travel agency business

Talking about how to start a travel agency business, as a Nigerian, you need to know that transportation business in Nigeria is still increasing with the rise in population which is projected at around 180,000 million as at 2020. Going into transport business in Nigeria is a viable proposition because the demand is there for you and beside, those in the sector already are racking splendid income.

What makes the business commercially feasible and easier to make money is that the supply meets the demand of commercial bus users. Only car owners use commercial transport so it is fair to assume that up to 70 percent of the Nigerian population use public transport.

Before I go into how to start a travel agency business, I will first of all show you the types of transportation business in Nigeria today. They are many and varied, and because of their interest and experience, different businesses choose different types of transportation business.

Types of transportation business

 

1. Motor cycling (Okada)

This is the use of motor cycle to carry passengers within a town , city and villages. Motor bike, well known as okada among Yoruba is used to carry one or two passengers at a time, though some states discourage carrying two passengers. But the days of makingĀ  use of motorcycle as a means of transportation or traveling are numbered as some states have prohibited the use of “okada” as a means of transportation, most especially in various cities, other states now are likely to follow the same thing in due course.

2. Tri-cycling (keke napep)

This is an improvement in the motor cycle and is officially intended to carry three passengers, some drivers carry four passengers, while others carry five passengers in some states. Keke napep is really common and it is likely to be utilized as a means of transportation by nearest generations as well. Some of the states government in Nigeria have proposed replacing motor cycle with keke napep without delay.

 

3. Commercial luxury bus and mini-bus

These are used to carry passengers for both city and intercity services. This means employing workers who commute to work or others who travel outside the state.

 

4. Car town service (taxi)

This is also used for transporting passengers inside and outside the province. It is a safer means of transportation than the unregistered and unpainted “kabu-kabu” because each owner registers the car with the state agency. There is also another form of car service known as “kabu-kabu,” which is also used for carrying passengers but for short journeys.

 

5. Transport operation for haulage

 

This is the use of various types of vehicles to carry goods for a fee. Different types of vehicles include tankers, trailers, tippers, etc. which are used to transport various types of goods

 

6. Offer hire purchase services

This type of business spreads to all federal states. It’s a new way of doing transportation business where you get regular income, more or less, it’s a guaranteed revenue. It works this way: at a particular price, you buy whatever type of commercial vehicle would be and hire them out at higher prices to different drivers. The driver will pay instalmentally for the agreed price. For example, a businessman buys ten tri-cycles at about 500,000 each and hires each one out at about 700,000 each with a ten-month installment of about 70,000 per month, after which the hirer becomes the owner. So the total amount due at the end of the 10th month, with the instalment payment of 70,000 a month, is about 700,000. Assuming that the entrepreneur has received all the instalments, from each of the tri-cycle he makes about 200,000. It’s a really cool business, isn’t it?

 

7. More classes

 

Other transportation business classes such as the use of aircraft, rail, ship or canoe and pipeline are beyond the scope of this Article. Since the article is intended for an average Nigerian who wishes to be a transporter entrepreneur.

Before you kick off …

To get ahead and be highly successful in Nigeria’s transportation business, you need to be aware of the following:

 

You have to be a businessman and have reasonable knowledge as a driver and/or mechanic. The reason for that is simple, the average business driver is dishonest. He’ll tell you lies about police arrest today, about the vehicle breaking down the next day, all in an effort to make extra money. He would sometimes be absent from duty with the excuse that he feels unwell, would you allow your vehicle to be idle for how many days before he reports back to duty?
You have to pay close attention to the drivers’ activities, monitor their journeys over time before you can have a certain level of confidence. Before you agree with the driver how much he would deliver on a daily or weekly basis, you must investigate what are the average daily costs of running transportation business and the average revenue which is feasible and possible.

 

Have a reasonable idea of what the driver’s action constitutes an offense for which he can be arrested and also know your driver’s route. Actually study the traffic laws of the state you ‘re operating in.

Steps to take on how to start a travel agency business

Here’s a breakdown of how to start a successful transportation business, with more focus on commercial buses:

  • Decide which type of transport you want to carry out
  • Choose your place and the lucrative routes
  • Obtain your vehicle through lease, hire purchase or a direct purchase
  • Drive it up yourself
  • Having a professional driver intereste
  • Grow your haulage business

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Below are the detailed steps:

 

1. Decide which type of transport you want to carry out

If it is a tri-cycling business or a business in Okada, they differ slightly from a commercial bus business. Capital investment and regular vehicle maintenance and running costs are significantly higher than tri-cycling business, but the daily return is different too.

 

2. Choose your place and the lucrative routes

Do your research properly to ensure that your position is best suited to the transportation business you want to run in terms of Area Boys and State Government’s financial demands. I ‘d recommend starting out small and gaining good experience before you grow big.

 

3. Obtain your vehicle by lease, hire purchase or a direct purchase

You must register the vehicle with the licensing authority, obtain vehicle insurance and other necessary documentation to enable you to operate without hindrance at your location. You also have to be part of the National Road Transport Workers Association.

  • The Nigerian Road Transport Owners’ Association (NARTO)
  • The Nigerian Road Transport Employers Association (RTEAN)
  • Global Road Transport Workers’ Union (NURTW)
  • National Government Approved Freight Forwarders’ Association (NAGAFF)

 

4. Drive it up yourself

My advice at this stage is that you should be the professional driver to drive your first commercial bus or tri-cycle since you have one vehicle at this stage, you will be managing it more prudently than the best driver.

So make sure you have a driving license and are a transportation union member. You are no longer a novice in the transportation business if you drive a commercial vehicle for a year, and you stand to gain so much when you eventually buy your second vehicle and then hire a professional driver.

 

5. Having a qualified driver interested

If you are running other companies, hire a professional driver and sign a memorandum of understanding between you and your driver. These may include: the return that the driver will produce on a daily basis and what happens if the driver fails to meet the accepted return obligations.

Sometimes the amount agreed with the driver depends on location, type of vehicle as well as vehicle size. For instance, an entrepreneur operating commercial transport service in Ibadan and using a professional driver will require far less return from his driver than his counterpart operating in the state of Lagos.

Do not forget that the professional driver must be familiar with the vehicle engine he will be driving and other related vehicles, this is important so that the driver can always drive the vehicle to the mechanical workshop whenever the unexpected occurs, i.e. when the vehicle breaks down.

 

6. Grow your haulage business

Plough your business profit back and buy more vehicles. You only become successful through prudent management of your resources and hard work of your transportation business. In Nigeria, you should also consider the option of inter-state transport.

 

Concluding

Nothing is easy to handle in this world, not even the transportation sector, particularly when you want to be effective and grow fast. Be cautious and careful: avoid the problems with the police by obtaining the right vehicle license, renew it when due along with the insurance certificate and other dues and levies. Also avoid LASMA and other transport unions, and possibly the Boys Area, problems. I hope this content has been able to enlighten you on how to start a travel agency business most especially in Nigeria. Happy earning!