How to Start a Commercial Tricycle Business

Tricycle business is one aspect of commercial transportation. The business thrives because of the huge population of Nigeria, bad roads and dirt tracks.
The need for cheap and fast transportation had led to an explosion of such vehicles on our roads. Another factor for the popularity is low cost of acquiring the vehicle and government initiatives.
The business is very lucrative and profitable for operators. The beginnings of tricycle business in Nigeria could be traced to the Keke Napep initiative. This was a poverty alleviation scheme aimed at the poor masses.
The scheme was fashioned to empower the unemployed population by providing subsidized vehicles to participants. Although the vehicles were not cheap the business developed into tricycle business today.
How to Start a Tricycle Business in Nigeria
The first step to starting the business is to buy a commercial tricycle. The average cost of a new one is about $1200(N400, 000). The next step is to register the vehicle.
Join an Association
To operate tricycle business in Nigeria you need to join an association. There are no free operators because the union would hound such an individual.
Pay your operators fee and union fee at a designated park. You don’t necessarily need to incorporate a business name unless you have many tricycles.
Long Lease
Another way to acquire a tricycle is to lease the vehicle. Some people operate hire purchase agreements and collect a total sum of N650, 000. This is incurred during a specified period from 10 to 12 months.
The operator pays the owner through installment payments and owns the vehicle once complete. Make sure you carefully go through the terms and agreement before appending your signature.
Rent the Vehicle
Some investors prefer purchasing the vehicles and renting to operators. The downside to this arrangement is the poor handling of the vehicle by the operator.
This is because the vehicle is owned by the investor and the operator is the commercial driver. He remits a weekly or daily take to the owner of the vehicle.
Funding could be sourced from thrift societies or micro finance banks. You could try target savings or borrow from friends and family. The working capital for tricycle business is periodical maintenance and fuel.
It is possible to make N5000 daily doing this business. This comes to N150, 000 monthly. Cost consideration should include fuel, association fees, loading and local government taxes.


Post a Comment