How to start a Ferry Business in Nigeria
Nigeria is a country with many people around waterways. In such areas, it is impossible to get away from that area to another without the use of a vessel. Some other areas use waterways because it would take lesser time to cross the water than to use the road transportation. Imagine a 5-15 minutes trip taking upwards of between 1-3 hours. It is only economical in time and money to just go across on water.
At certain times the issue of overstretched infrastructure on the road that causes gridlocks and long queues in big cities like Lagos, make use of the ferry logical. They reduce stress that could arise from being in traffic for a long time.
If you do not know what a ferry is, it is a boat used to transport passengers, vehicles or goods across water, particularly one servicing narrow channels or across a river on regular basis. If you desire to move people or their produce across the water, you could invest in the ferry business.
The most established ferry service in Nigeria is in Lagos state. Other states that enjoy ferrying services to a high degree are Niger, Benue, Rivers, Bayelsa and other states in the south-south region of the country.
Types of ferries
There are many types of ferries among which are the double-ended ferries, car boat ferries, channel ferries, cruise-ferry etc. The type of ferry you decide to use is dependent on the kind of service you choose to render.
Tips to Establishing a Ferry Business in Nigeria
It is important to remember that as it is with most businesses, there are challenges you will face that are peculiar to your business. The following tips, though not exhaustive will guide you in establishing yourself in the ferry business.
- Carry out Feasibility Studies
Feasibility studies is important to improve your chances of success in business. You should have a clear picture of how you want the business to run. Furthermore, you should have clear objectives, targets and a plan on how you are going to achieve them. You should also have clear answers to the following questions by the time the study is completed;
What will be the name of your business?
Are you starting out alone or in partnership with individuals, companies or public-private partnership?
How is your business going to be funded?
Are you buying a franchise or are you starting from the scratch?
Are you building or buying the ferry or ferries?
What type and how many ferries do you intend to begin with?
Which routes have the greatest need for ferrying services?
The kind of service you want to render. Is it just vehicles, goods, people or all of the above?
What other infrastructure is necessary?
How many employees are you recruiting?
What duty are employees expected to carry out?
How much would you pay them as salary?
What is the customer acceptability in the area?
What critical factors are vital to your business?
How are you going to manage those factors?
What ticketing and billing policy are you employing?
How much are you going to spend on recurring expenditure?
Identify your competition and work out a strategy to be competitive.
What is your expected cash flow and how long till the investment breaks even?
What is your expansion or future plan?
How realistic and sustainable are your projections?
At the end of the study you should prepare a business plan.
- Raise Funds
The ferry business is capital intensive. You need to include everything you need in your budget. You could find out much of what you need from associations and others in the business. It is important to not approach your competitors like you are one of their rivals. They will be unwilling to disclose information that could potentially give you the upper hand. But they are relatively free in with interacting with those who are not perceived threat.
You should also determine if you are going to be a solely funded company or in partnership with other entities.
- Obtain Relevant Registration and Licenses
It is important to do register your business with the CAC as well as state licensing offices. Obtain licenses for operation on their water courses. You need to register every ferry with the appropriate authorities. Also, other validation for fire safety, passenger safety, insurance, sea worthiness and other permits that will allow for easy operations. Maritme agencies and ministries of inland waterways as the case may be will have licenses that you will have to obtain.
- Purchase Ferries
How many ferries do you need? Are you going to buy out a franchise or start with newly built or purchased ferries? The amount of funds will determine the type of ferry you will be able to purchase. If you are short of funds, you could resort to refurbishing to turn it into a hybrid vessel. This hybrid ferry may be a little faster and fuel efficient. When buying a ferry, you must know the capacity (passenger and luggage/ vehicle) and speed. The number of people you can accommodate per trip as well as the speed of the vessel will benefit you in computing cash flow and making predictions.
The cost of the ferry is the most expensive part of starting a ferrying business. If you are purchasing a second-hand ferry, ensure it has good history. Be sure to purchase optimally functioning ferries with healthy lifespans.
- Choose a Location
The location you pick to run your ferry business is going to determine the kind of service you will render most of the time. You could choose a local or urban area. Urban areas are popular for moving people quickly to city centres. In Lagos, you can set up shop in any of the following locations; Ikorodu, CMS, Lekki, Falomo, Ijegun, Ebute Ero, Apapa, Victoria Island, Majidun, Epe etc. in Niger State, Patigi and in Rivers, Bonny Island. There are so many other areas across the country where the ferry business is highly profitable. During your survey, you should determine which area is has the best potential at the moment and in the future.
When you have decided all these, rent an office space and set it up. You need a place to run your business from.
- Determine your Service Preference
The kind of service you want to deliver will determine the type and number of staff, routes, pricing, etc. You could lease your ferry for individual or companies for a time in which case, workforce would be greatly reduced. If you want to run it yourself, then you should determine if you want to ferry just people or with goods and vehicles.
- Purchase Equipment
Equipment such as ticket counter machines, ticket vending machines or dispensers could be purchased. They reduce the number of salespersons and helps in record keeping for easier accounting. You could also purchase POS machines to simplify handling of cash.
Computers and printers may also be purchased depending on the level of sophistication you want. Office stationery like letterheads, pen and files, cello tape, stapler and paper clips etc. are necessary for smooth running of the office. It will also maximize staff productivity. Get life jackets, first aid kits and fire extinguishers on each of your vessels.
- Employ Staff
Your staff are critical factors in the smooth running of your business. You need experienced hands in certain operation areas. You would need to employ a licensed sailor, a deckhand and a cabin crew. At least one of your crew should be able to administer first aid in cases of emergency. The crew will include those to verify tickets before boarding, arrange and handle luggage, and clean the cabin and deck from time to time. You also need some technical staff to handle issues that may arise in transit or at the pier. Every staff should be handed a well-defined work schedule.
- Determine Routes
There are routes that could be exploited with respect to the location. This will help you also plan through knowledge of time it would take to get from point A to B along the routes. Schedule flexibility, problems that may arise on the various routes and fares. If possible, get alternative routes that you could use for each voyage. This will prove helpful if there is a problem with the preferred route.
You could also organize tours and pleasure trip for tourists especially during holidays and weekends.
- Determine Fares and Payment Method
Fares should be in line with the association guidelines and should follow standard billing policies in the region. Fares are not constant but subject to change with respect to changes in overhead cost. Luggage should also be taken into consideration. Since fares are the only way income is generated, fares have to be reasonable with distance travelled.
Once fares have been determined, tickets should be issued to customers before boarding. You ordinarily should graduate tickets as one-way tickets for adults and youth. Children under 5 should attract no extra charges when accompanied. You should include a disclaimer for the limit of children a ticket could accommodate for free per trip. Confirmation of tickets are usually before the trip.
There are times when school groups may want to experience a ferry ride. Be sure to issue discounted trips for such people. Understand that a ferry makes many scheduled trips per day.
To be a top player in the ferry business, payment options should be as flexible as possible. Payment could be through cash, POS, cash transfers, credit/debit cards and online payment.
- Market Your Ferry Business
Vigorous marketing should be carried out especially if you are new in the area. If you have the capital to purchase already established ferry franchise, your advertising will be greatly reduced. Here, you are assured of a seamless operation from the first day you assume ownership. Imagine that you have infrastructure, customer base, network distribution and supply chain, seasoned employees and cash flow from the first day of operation. Because of this you are afforded easier access funding from lenders and investors.
Starting the ferry business from scratch should not be entirely seen as a disadvantage. The advantage of building a business tailored to your specification, and the flexibility to build at your own pace could be very rewarding.
Marketing could be by media, posters and flyers distributed around places with high demographic for market opportunities.
If you have a website, it will be an added advantage.
- Map out a Maintenance Schedule
The ferries you will be using will require regular and scheduled maintenance. This will allow for seamless operations. There are daily maintenance requirements, routine and periodical maintenance schedules that must be executed as at when due. As said earlier, you will need a crew member that can carry out light maintenance of the vessels.
Routine and periodic maintenance could be carried out by engineers that frequent piers. Only allow trustworthy hands to operate on your vessels. Be sure to follow your maintenance schedule judiciously.
Make sure the efficiency of your operation is as seamless as humanly possible.
Challenges you may face in the Ferry Business in Nigeria
There is no business without challenges. The hallmark of a good businessman is in how well he is able to surmount those challenges.
- The cost of starting a ferry business is high
- Poor facilities at most terminals in the country
- There is overlapping responsibilities of government agencies
- Technology is lacking
- Poor safety, security and poor response time in case of emergencies
- Low capacity for manpower development
- Maritime laws are not adequate to benefit investors
- Poor research and development capacity
Despite all these challenges, the ferry business is still a viable business venture. Most of these issues are not peculiar to the ferry business. So, if you think you can weather the challenges, this is an ideal investment opportunity. This is especially true since there is room for improvement in the industry.
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