Do you want to start an inland waterway transport? If YES, here is a complete guide to starting an inland waterway transport business with NO money and no experience.
Nigeria is a country that makes available endless business opportunities for all and sundry; local and foreign investors are reaping good returns from their business enterprises in Nigeria. Starting a business in Nigeria is not as difficult as it is in most countries; you can start and nurture a business to profitability in Nigeria within a short period of time.
One of the many business opportunities in Nigeria that is not fully tapped into is the inland waterway transportation industry. Loads of entrepreneurs concentrate on road transportation leaving waterway transportation to very few people. As an aspiring entrepreneur who is interested in making money in Nigeria, you should consider starting an inland waterway transportation business.
It is important to state that the startup capital for this type of business can be intensive or moderate, depending on the level you want to start as it relates to the number of speed boats or ferries you want to put out there. But one thing is certain, the inland waterway transportation business is indeed a profitable and thriving business.
Just like most businesses out there, you cannot ascertain the profitability of an inland waterway transportation business in your city until you conduct a thorough feasibility studies and market survey; with that, you will be able to make informed decision whether to go ahead with the business in your location or not.
Lastly, if you are not too sure if it is the right decision for you to start an inland waterway transportation in Nigeria, then you may want to read through this article; you are sure going to get some facts and figures that will help you make your decision.
17 Steps to Starting an Inland Waterway Transport Business in Nigeria
1. Understand the Industry
The Inland Water Transportation industry includes establishments that primarily engage in providing waterborne transportation for cargo and passengers along the nation’s lakes, rivers and other inland waterways.
In Nigeria, the Inland Water Transportation industry shows modest barriers to entry. Largely, an inland waterway transportation company can be started with just one speed boat or ferry hence the participation of so many small sole proprietorships in this line of business.
Though this structure put limits on an operator’s flexibility and capacity to do business, as those companies with more boats and barges can offer more flexible scheduling, more route options and greater transport capacity. Additionally, the resources and marketing power of the industry’s largest players enables these companies to offer customers multiyear contracts which locks out new entrants. Consequently, smaller players must compete on the much more competitive market or act as subcontractors to larger companies.
Some of the factors that encourage entrepreneurs to start their own inland waterway transportation services business could be that the business is easy to set up and it is indeed a thriving and profitable business venture that an entrepreneur with little business skills and training can comfortably start.
Lastly, starting a inland waterway transportation services business in the united states requires that you get the necessary permit and license to be able to operate in any city of your choice, and you are expected to have a good grasp of the sea routes and perhaps financing plans for speed boats and ferries.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
Those who require the services of an inland waterway transportation services company is not restricted to people who live and work in riverine areas alone, but it is available to tourists and other visitors.
3. Decide Which Niche to Concentrate On
Most inland waterway transportation services companies with adequate capacity tend to provide a wide range of services as it relates to water transportation that is why it seems like there are no niche areas in the industry. But on the other hand, some inland waterway transportation services companies may decide to major in some key or niche areas such as;
- Canal barge transportation
- Freight transportation on inland waters
- Intracoastal transportation of freight
- Lake freight transportation
- Lighterage (i.e. freight transportation except vessel supply services)
- River freight transportation
- Ship chartering with crew on inland waters
- Shipping freight on inland waters
- Towing services on inland waters
The Level of Competition in the Industry
The level of competition in the inland waterway transportation services industry depends on the location of the business and the area of your specializations. In some areas in Nigeria, it is intense and in most areas, it is mild.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure that your speed boats and ferries are comfortable and safe, and your operators are all level-headed and ensure that you comply with the rules and regulations of the regulating authority.
When it comes to starting an inland waterway transportation services company, you just have to get your feasibility studies and market research right before venturing into the business. It is good to mention that the inland waterway transportation services business comes with its own fair share of challenges.
Starting this kind of business definitely entails that you raise plenty of capital because you will need capital to purchase the first set of speed boats and ferries. On the other hand, if you cannot, you may want to consider pulling the resources from family and friends. Depending on the scale at which you want to start from, you might require as much as multiple thousands of Naira and even millions to get it started.
It is important to note that in Nigeria, it may be difficult to get accurate data that will help you with your economic and cost analysis hence you will have to improvise. The truth is that if you get your economic and cost analysis right before launching the business, you may not have to stay the long before you break even and start smiling to the bank.
4. Know Your Major Competitors in the Industry
There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
If you are looking towards starting an inland waterway transportation services company in Nigeria, you would have to start from the scratch because there is no franchise of an inland waterway transportation services company to buy. It is a business that is open to all and sundry as long as you have the required business exposure and startup capital.
5. Know the Possible Threats and Challenges You Will Face
If you decide to start your own inland waterway transportation services company in Nigeria, one of the major challenges you are likely going to face is the presence of touts, who position themselves at strategic locations extorting your operators, and in adequate regulations and support from the government. There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.
6. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Firstly, it is important to point out that in Nigeria; there are loads of businesses that operate with registration and the appropriate permits. However, if you are considering starting an inland waterway transportation services company, the legal entity you choose will go a long way to determine how big the business can grow.
You have the option of choosing a general partnership, or limited liability company for your inland waterway transportation services company. Ordinarily, general partnership should have been the ideal business structure for a small scale inland waterway transportation services company especially if you are just starting out with a moderate startup capital, and with just one speed boat or ferry operating in just one route.
But if your intention is to grow the business and have several speed boats and ferries operating all across waterways in Nigeria and the West African Coast, then choosing general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
Basically, these are some of the factors you should consider before choosing a legal entity for your inland waterway transportation services company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes.
The truth is that if you take your time to critically study the various legal entities to use for your inland waterway transportation services company, you will agree that limited liability company is most suitable. You can start this type of business as a limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans
7. Choose a Catchy Business Name
When it comes to cherry-picking a name for your business, it is anticipated that you should be creative because whatever name you choose for your business will go a long way to create an awareness of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own inland waterway transportation services company, here are some catchy names that you can choose from;
- Bakana Boys® Water Transportation Services, LLC
- Calabar Seafarers® Water Transportation Services, Inc.
- Jack Dagogo and Sons® Water Transportation Services, LLC
- Eko line® Water Transportation Services, Inc.
- Adeniji Williams® Waterway Transportation Services, LLC
- Green Strides™ Water Transportation Services Group
- Holy Cross® Waterway Transportation Services, LLC
- Duke of Calabar™ Water Transportation Services Ltd.
- Bassey and Company® Water Transportation Services, Inc.
- Ijaw Life® Water Transportation Services, Inc.
- Red Star™ Water Transportation Services, Inc.
- Eagle Surfers® Waterway Transportation Services, Inc.
8. Discuss with an Agent to Know the Best Insurance Policies for You
It is the law that in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your inland waterway transportation services company.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own inland waterway transportation services company in Nigeria;
- General insurance
- Comprehensive insurance for speed boats and ferries
- Health insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
9. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own inland waterway transportation services company, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successful run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
10. Get the Necessary Professional Certification
When it comes to the inland waterway transportation services business in Nigeria, you do not need to have any formal training or special certification before you can be allowed to start the business. All you need is informal training that will give you the needed skills coupled with your own inbuilt business skills.
On the other hand, if you come across any form of certification that can aid you to conduct your inland waterway transportation services business successfully, then by all mean try and pursue such certification.
11. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in any part of the world – Nigeria inclusive cannot be overemphasized especially an inland waterway transportation services company. If you do, it won’t be long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own inland waterway transportation services company in Nigeria;
- Certificate of Incorporation
- Business License
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Memorandum of Understanding (MoU)
12. Raise the Needed Startup Capital
Starting a standard inland waterway transportation services company is indeed a capital-intensive business hence entrepreneurs willing to start the business ensures that they raise the required startup capital from all available legal means.
When it comes to financing a business, one of the first things and perhaps the major factor you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your inland waterway transportation services company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
13. Choose a Suitable Location for your Business
Choosing a location for an inland waterway transportation services company can be in two phases. First, it must be located in a city that has need for such services (a city/community in a riverine area) and also in a city that has jetties. So also, you are expected to secure administrative office in a visible and busy location close to the seashore.
Indeed, location has great influence on the success of an inland waterway transportation services company. If you have taken your time to study the inland waterway transportation services industry, you will realize that inland waterway transportation services companies are willing to pay expensive rents in order to stay close to the seashore; a place where business and financial activities are at its peak.
So, if you are looking for a location for your inland waterway transportation services company, ensure that it is a place that is located along a shoreline in your city, a place that is visible and easily accessible. Of course, you would not want to locate this type of business in the outskirt of town where there is no water.
14. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technologies or equipment needed to run this type of business except for comfortable and safe speed boats and ferries, lifejackets for operators and passengers, and logistics and transportation software applications. For your administrative office, you will need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
When it comes to choosing between renting and leasing an office space close to a shoreline, the size of the inland waterway transportation services company you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard inland waterway transportation services company, then you should consider the option of leasing a facility for your office.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, you would need a Chief Executive Officer (you can occupy this role), an Admin and Human Resource Manager, Speedboat Operators and Assistant (Captains and Seamen), Accounting Officer, Business Development Executive, and Customer Service Officer or Front Desk Officer.
Over and above, you would need a minimum of 5 to 20 key staff to effectively run a medium scale but standard inland waterway transportation services company. Please note that you would need the services of speed boat servicing and maintenance engineers. If you are just starting out, you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you, hence you are expected to contract out some roles.
The Service Delivery Process of the Business
The way inland waterway transportation services companies work vary from one company to another, but ideally, an inland waterway transportation services company is expected to first and foremost hire highly skilled and licensed ferry operators with commercial driver’s license, get their safe and comfortable speed boats and ferries available to transport passengers from on jetty to another jetty after they must have paid their transport fare.
Lastly, there is no hard and fast rule as regards to the business operation of an inland waterway transportation services company; the bottom line is that anything legal that will make them welcome loads of passengers daily and make good money is always welcome.
15. Write a Marketing Plan Packed with ideas & Strategies
Usually, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch an inland waterway transportation services company, then you must go all out to employ strategies that will help you attract passengers or else you will likely struggle with the business because there are well-known brands determining the market direction for the inland waterway transportation services line of business.
People that work or live in riverine areas will patronize your services if they know that they are going to get the best of services and of course value for their money.
As a matter of fact, your marketing strategy will center on reliability, swiftness, safety, pricing and above all excellent customer service. You should ensure that whenever your customers hire your services, they will get excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort will be directed to internet users.
These are some of the marketing ideas and strategies that you can adopt for your inland waterway transportation services company;
- Introduce your business by sending introductory letters alongside your brochure to all the businesses and households in and around the communities you intend operating
- Advertise your business in relevant transportation magazines, radio and TV stations (make yourself available for transportation related talk shows and interactive sessions on TV and Radio)
- List your business on local directories/yellow pages
- Attend international transportation expos, seminars and business fairs
- Create different packages for different category of clients in order to work with their budgets
- Leverage on the internet to promote your business
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks
- Engage the services of marketing executives and business developers to carry out direct marketing
16. Develop Iron-clad Competitive Strategies to Help You Win
The inland waterway transportation services industry is a competitive industry in Nigeria, and you must come up with unique and highly creative strategies to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to operate safe and affordable services. Passengers will always make use of your speed boats and ferries if they know that you have a better option especially as it relates to safety and pricing.
Another strategy that you can adopt is to ensure that your organization is well positioned, key members of your team are highly qualified and certified in their chosen career path especially your professional speed boats and ferry operators.
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secret of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.
If your intention of starting an inland waterway transportation services company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
In promoting your brand and corporate identity, you should leverage on both print and electronic media and also the social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brand, besides it is pretty much effective and far reaching.
Another strategy is to sponsor relevant community based programs, TV and radio programs, and advertise your business in relevant magazines and newspapers.