The Business Overview
The demand for car hire service in Nigeria keeps being on the increase, daily. The reasons for this is not farfetched. Daily, people arrive and depart various locations around the country, hence the need to employ the car hire services and personnel.
Aside from that, people need car hire services for occasions such as marriage ceremonies, weddings, burial ceremonies, parties etc.
This shows that car hire service business is a lucrative business to do in Nigeria. But first, what is car hire business and what does it entail?
Car hire business is essentially about pick up and drop. Customers for this business include tourists, businessmen, and women, company executives etc.
The business is a form of land transportation shuttle service. It helps to conveniently crisscross various locations at ease, away from the encumbrances inherent in public, transportation.
People who don’t have the car of the moment for the occasion would not hesitate to employ the services of car hires and pay handsomely for it.
Indeed, this is a money-spinning business for those who can run it well, and a major contributor to Nigeria’s economic sector as per tourism and transportation.
Hence, as a legal business, any proper thinking person should key into. Given these preambles, therefore, I present to you today a complete business plan on car hire business in Nigeria.
Below are rough estimates of the startup costs for car hire business in Nigeria.
1. Car: this depends on whether you wish to use a fairly-used Car or a new luxury car. If you are going for the former, then you should budget between N800, 000 – N1.5m. at least that can get you a sound fairly used brand of Peugeot, Toyota, Nissan, Honda etc.
2. Office Space can take about N500,000 (depending on location)
2. Office Furniture: N200,000 (depending on location)
3. Marketing/Advertisement: N350,000 (depending on location and choice of marketing approach)
4. Miscellaneous (this includes the cost of risks, insurance, consumables etc.) – N600,000
4. Rough Total: N3,000,000
Depending on your business strategies, you should be able to recoup your investments with profits in about one year.
Read Also: How To Start A Car Tire Business In Nigeria
How To Start Car Hire Business
Conduct A Feasibility Study/Research
Surveying the business and documenting your report is what is called feasibility study or feasibility research. It is very important and is the first port of call in car hire services business.
Information gained in from this will help you in knowing the pros and cons of the business, as well as an overview of the risk potentials and avoidable risks. It will equally expose to you the core target market. See the target market below:
Car Hire Business Target Market
By rule of thumb anyway, the market for this business circles around business executives, occasions, tourists and travelers. These are the people you should target while planning for this business.
The target market will inform your choice of business model. This will decide your level of service and target client, the class and brand of cars to use regular cars, of course, would go for regular occasions, while luxury cars will fit people of a particular class who have and are willing to pay the price for such. Paying attention to your target market is the hallmark of success in this business.
The first thing you need to do is to carry out a feasibility study. The results of this study would help you determine the advantages and disadvantages of starting the business as well as analyzing the risks involved.
Permits and Licensing Needed
In Nigeria, car hire business is under the auspices of the ministry of transports. Different states have different names for this organ of government.
Hence, find out where they are and get your business licensed appropriately. Also, if you want to rotate your business around the airport premises, you need to get licenses and permits from Federal Airport Authority of Nigeria (FAAN).
This is a relevant regulatory agency of government tasked with that function. You need to also register with Taxi Drivers and Cab Operators Association in your state of residence.
Joining car hire business unions and paying the laid down fees and dues is equally a good thing to do if you must succeed in this business.
Read Also: How To Start A Car Leasing Business
Business Specializations In Car Hire Business
By heuristics, car hire services business presents itself in two ways. We have the general car hire services business and the specialized service car hire services business. it is up to you to choose either of the two after weighing both for profits, losses, strengths, and potentials.
At the end of your feasibility study you should be able to:
a. determine you have the capability to continue with this business or not
b. know the start‐up and supplies needed
c. have an idea of market demands and customer attraction strategies.
d. Know the licenses and permits required to operate this business
e. How to face competitors, satisfy customers’ needs and meet business goals.
f. Ascertain price fixation apparatuses, sensitivity and customer demographics.
On satisfactory completion of your feasibility study and determination of your target market, registering a business name should follow.
This should be something striking, and which at a glance give an idea of what you are into, without much thinking. Go to Corporate Affairs Commission (CAC) office in your town to get this done.
The Importance Of A Good Business Plan
Though identical to a feasibility study, a good business plan will guide you into starting and running this business successfully.
It methodically keeps you on track with the defined focus and goals of the business. it encompasses the financial estimates and investments, keys to success and alternatives during risk periods. It is an asset every car hire business should have.
Marketing & Advertisement
Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably.
A marketing strategy is something that affects every part of your new business. It is about using everything that a business does to create value for others. This includes customers but it also benefits employees and shareholders.
The strengths and weaknesses of any business to a large extent lies in marketing. The car hire business is not left out. In doing your marketing, strive at satisfying your customers and meeting your business goals/objectives.
Some of the approaches to this regard which you should consider employing includes creating a strong online presence by creating a website for this business where you advertise directly to your target market. It should be neat and professional in outlook and functionality.
Additionally, get viral on the social media: Facebook, Twitter, Instagram etc. proliferate the internet with a positive image of your business.
Away from online, print and distribute handbills and fliers, decorate your car with your business image and make conscientious use of the mass media.
With these, you should go far in this business, making your customers happy and meeting your business objectives at the same time.
Read Also: Where to Buy Cars in Lagos, Nigeria
The aim of every business is to make profits. Starting a car hire services business on a good footing is but the best way to achieving that.
In this guide, you have learned the marketing strategies, seen the need to conduct a good feasibility study, had an idea of the cost estimates and known where and how to get licensed in order to run this business successfully.
Now that you know this, go ahead and start your car hire business. see you at the top.
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