How to Start a Clearing and Forwarding Business in Nigeria + BUSINESS PLAN
All nations of the world are involved in the import and export business and this is because they have certain raw material in excess and need to export to make money or generate revenue for the nation or they need some form of goods that another nation have in excess willing to export and they don’t, so they import these goods from other neighboring countries.
Also Read: How to Start Export Business in Nigeria
Because the world is a global village and no single country is independent from others in terms of meeting their needs, it becomes imperative that these countries get involved in trade and the only way this can work is by importation and exportation; putting in mind that importation can be easily done when there is a clearing and forwarding agent/company that stands as a go between for the company exporting and the company or individual importing. Another phrase that is used to refer to clearing and forwarding is Freight Forwarding.
The survival of a people is hinged on the recognition of the goods they have in excess and the successful export of these goods and the goods they also need and import these goods to sustain life as it is there. With that in mind the need to move goods and products from one location to another location stands as an all-time high need for every manufacturer and customer in need; so the need for a clearing and forwarding agency comes into play. This business is service oriented and rises or falls on the total satisfaction of the clients.
Also Read: Haulage Business Plan in Nigeria
Some Duties Of The Agency
Some of the duties amongst many others includes negotiating between manufacturing companies and shippers who needs their product to move and the consumers that needs these products, paying duties and taxes, clearing goods from the port authorities and ensuring that after containers are released you transport them all the way to their destination.
- Make The Decisions
most businesses that fails, fails as a result of lack of the will power to carry on from the inception stage and most fail because the one that intends to start the business does not fully make up his mind as to if he is ready to take on the business headlong. Clearing and forwarding business is not an easy feat and so the decision to venture into this business should not be one to be taken likely: You need to ask yourself certain questions which deserve definite answers. One of such question is DO I HAVE WHAT IT TAKES TO SEE THIS BUSINESS THROUGH?
Note this question is talking about a lot of things like: financial, emotional, connections and general will power to get this done. If you can answer this question positively then you are one step closer to achieving that dream.
- Profitability
Going into this business has its upsides and one of them is the profitability of this business and this stands as an enormous gain and light in the end of the tunnel for those going into this business. Some of the profits is as follows:
- You have the opportunity to connect with the most successful merchants that exist in the business worldwide.
- It makes you focused and more hardworking than most conventional business owners in the and around the country.
- Gives you a far greater knowledge of your home country and other countries around where you do business.
- This business generates much more income than most of the conventional business which put the business owner in the high class of the society.
- Gain The Necessary Experience
This is one business you don’t want to go in blind. There are several pitfalls and skill required in becoming successful in this business. Do adequate research and get hands-on skills that will be helpful to you throughout your journey. A few of these skills involved skills in negotiations with custom agents/officials, clients, shipping companies, workers, etc. it will also be of added advantage to learn many languages especially the local dialect spoken predominantly in the area you are doing business.
- Requirements
There are a lot of requirements in this line of business but we will name a few under this point others you will get as we go on.
- STORAGE FACILITY: this place is where you will store customer’s freights before they are cleared which may last more than a day.
- SECURITY: It is also important that the storage facility has adequate security; you don’t want to have to deal with the theft of goods under your custody. It will give your business a bad name.
- VEHICLES: you will need large trucks which will be used for logistics, movement of freights from one place to another is very important. Your vehicles need to be in great working conditions to be able to meet up with your customer’s deadline.
- Get A Business Plan
Most businesses don’t see the light of day from the day of inception or crumbles before they ever get the chance to make it big because of the lack of planning. Before starting any business venture it is important that you have a concise business plans. Dreams must be broken down into goal and goals broken down into modules with an achievable timeline to it. This helps you to be more objective about business and prioritize rightly.
If you do not have the capacity to write a business plan for yourself, we can be of help to you. We can write your business plan for you detailing all your specifications and structure. Call us today at: 07033378184 or email us at: hello@businessplan.com.ng
- Get Funding For The Business
Accessing funding for a new business is usually one of the most difficult huddles that exist in starting a business especially when the business owner doesn’t have other businesses that can fund the startup of this new venture. If you don’t have someone funding your business you could get a bank loan which will always pan out well if you have a collateral and guarantor. This process should be rather easy if you have all necessary paper work intact; but here comes the hard truth starting this business is not for those struggling financially.
If you are financing yourself you should have funds enough to cater for your major expenses and miscellaneous for at least three months before the business find its footing.
- Get License
Clearing and forwarding business is not one that you can just start up a shop somewhere with a name and expect things to go smoothly. You need to get licensed before you start up this business. So contact the necessary authority that grants licensing to agents and begin your business.
- Business Name Registration
Having a business name is one important task that also need to be carried out; as simple as it is, you may find out that the name you intend to use has already been taken by another business owner. You need a name that is simple and speaks volume, a name that becomes like your trademark and will make customers interested in doing business with you. Let the name sound professional. Contact the CAC (Coperate Affairs Commission) nearest to you, for a successful business name registration.
- Get An Office Space / Business Location
You also need an office space where people can have physical contact with you or members of staff. Most people won’t commit much into your hands especially shipments when they don’t know a physical structure and person they can relate to. In getting this office space you must also consider the location and proximity to ports.
- Adequate Staff
Recruit qualified and well-mannered staff to get the job done. You cannot do everything at every time, you cannot also be everywhere at the same time so you need capable hands that will take charge of key roles in the business.
- Marketing And Publicity
In starting a business one must put into consideration that there have been others involved in this business before you came in and even if there is no one doing what you are doing you must also alert the public to the services you render, so the need for publicity and marketing becomes important. You can also have a publicity and marketing department in your organization depending on how big you decide to start. There are several means that can be used for publicity. Here are a few: website/social media, print media, television and radio advertisement, etc.
- Network With Shipping Companies And Manufacturers
It is very important to note at this point that networking and having good standing relationship with shipping companies and manufacturers is paramount. Always be abreast on the latest laws, price and other information that may benefit you and your current or prospective clients. Have phone contacts, addresses and representatives stationed across for your benefits.
List Of Local Airports For Clearing And Forwarding Business Owners In Nigeria And Locations
These are some of the local airports you can do your business in and they are listed in alphabetic order:
- Akure Aiport, Akure;
- Akwa Ibom International Airport, Uyo;
- Benin Airport, Benin;
- Ilorin Airport, Ilorin.
- kaduna Airport, Kaduna;
- Magaret Ekpo International Airport, Calabar;
- Maiduguri International Airport, Maiduguri;
- Makurdi Airport, Markudi;
- Sir Abubakar Tafawa Balewa Airport, Bauchi;
- Sultan Saddik Abubakar Airport, Sokoto;
- Warri Airport, Warri;
- Yakubu Gowon Airport, Jos;
- Yola Airport, Yola;
- Zaria Airport, Zaria;
Nigerian Airports Known For International Clearing And Forwarding Business
If you decide to go international with your clearing forwarding business then it is important to note a few international airports that you can use to do your business.
Here are some of them are listed below in alphabetic order:
- Akanu Ibiam International Airport, Enugu;
- Mallam Aminu Kano International Airport, Kano;
- Murtala Muhammed International Airport, Ikeja, Lagos;
- Nnamdi Azikiwe International Airport, Abuja;
- Port Harcourt International Airport, Port Harcourt
Seaports In Nigeria For Clearing And Forwarding Business
A lot of people prefer doing this kind of business with seaports because they are cheaper and carries more than an airplane can normally carry but they are slower. So in using seaports there cannot be urgency in the equation. Below are a few of the seaports in Nigeria you can do business with in no particular order.
- Tin Can Island Port, Apapa, Lagos State;
- Delta Seaport, Delta State
- The Delta Port: This includes the ports of Warri, Burutu, Sapele
- the petroleum terminals at Escravos and Forcados
- Lagos Port Complex Apapa, Lagos State
- Calabar Seaport Calabar, Cross River State
Basic Procedures For Clearing And Forwarding Business In Nigeria
As the clearing agent or agency you are to ensure that the goods gets packaged and shipped down to destination. When this is done and you have been contacted that the shipment arrived safely, you are to pay custom duty to ensure that custom clears the container from the port.
Then you head to the sheds to ensure that the goods are released from the releasing officer designated to oversee the release of the goods.
The procedure for the release of the goods is handled by a couple of units. Below are some of the units involved in the releasing process.
- Custom Investigating unit.
- Tally unit
- Valuation unit
- Enforcement unit
- DMI
- PM provost marshal
- NDLEA
- Police
- Bomb squad
- State security service
- Etc…
A Few Key Points To Note:
- Ensure that you know the content of the shipment you are clearing and forwarding, so as not to get implicated by shipping illegal goods into the country which can set security agencies against you and after you.
- You need to ensure you client knows the timeline for shipments and sticks to it to avoid tension.
- Ensure that your client is fully aware and ready to pay all forms of charges and expenses that are incurred in the entire process of clearing and forwarding so as not to run into a loss.
- Get competent office staff and workers like drivers and ensure they paid well to avoid greed coming and putting the customers’ goods at risk.
- Containers or vehicles can have a vehicle tracker which will keep reporting the location of each vehicle at every point in time in the event of carjacking or accident.
If you do not have the capacity to write a business plan for yourself, we can be of help to you. We can write your business plan for you detailing all your specifications and structure. Call us today at: 07033378184 or email us at: hello@businessplan.com.ng
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