Looking for more information? Search this blog

Wednesday, January 17, 2018

How to Start a Professional Car Wash Service in Nigeria

The car wash business is a relatively simple and small sized business to run in Nigeria. There are over 7 million cars in Nigeria with a sizeable number owned by corporate organisations and very busy employees and business owners who need to drive their car around but have little time to actually Wash their cars. 

You can start a car wash service on a low budget or you can start a standard one at a good location, the key factors are finding a great location and observing good customer service. Most car wash businesses in Nigeria are operated by ‘hustlers’ with little or no training in providing the service and are mostly unemployed youths who see it as something to put body and soul together. The few professional car services that exist can typically process 3 to 5 cars every 20 minutes which is very difficult to achieve except you operate with a purely automated service.

Ideal locations for this type of business are conspicuous spots on busy roads, within busy fueling stations, at popular market locations, close to high density car parks etc.

The Opportunities for Car Wash Services in Nigeria

Nigeria is a very dusty country in relation to many Sub-Sahara countries and also has many bad roads which create the ideal environment for frequent car wash needs. The bad state of roads often means pot holes and potholes mean water puddles during the rainy season. Also the high presence of untarred roads means plenty of dust during the dry season which forces many car owners to wash and clean their vehicles every two or three days. If at least 5% of car owners offer their cars to car wash services in Nigeria at least twice a week, that means at least 700,000 cars are washed every week in Nigeria. That is not a bad market if each car wash goes for N500 that means at least 350 million naira weekly sales or at least 18 billion naira per year market from just 5% of the potential market.

There are other related opportunities as well. Washing of rugs, fumigation service and even office cleaning service can be run alongside a professional car wash service. People who have dirty and old rugs often times approach car wash operators to help clean their rugs thoroughly because very often they have the skills and tools to do a thorough job. Add fumigation to it. If there are parasites bugging your home, chances are that someone who runs a professional car wash service would also have the tools to come clear your home of it. Finally many professional office cleaning businesses actually started off as car wash service.

Challenges facing Car Wash Service in Nigeria

But this is rather easier said than done. There are many challenges which could frustrate anyone going into this business. For instance how do you deal with finding a suitable location within a commercial and well populated area and that is not an easy task. Even when you find one you have to contend with task force, street urchins, high rent costs etc. Another challenge is with fraud. What if in your absence your employees wash some cars but don’t remit the money to you. How do you know if you are being defrauded or not? How would you determine how many cars you actually washed compared to the amount you got?   

Startup Summary Cost for Standard Car Wash Service in Nigeria

  • Rent Cost – 180,000
  • Car Wash Port – 150,000
  • Construction and Renovations – 200,000
  • Car Wash Equipment – 150,000
  • Borehole – 150,000
  • Water Reservoir – 50,000
  • Adverts and Printing – 30,000
  • Initial 3 months Salaries – 240,000
  • Other Operating Costs – 300,000
  • Total – N1,450,000

Monday, December 25, 2017

Sample Business Plan on Commercial Pure Water Production in Nigeria

The business of producing drinking water in nylon sachets or pure water production in Nigeria has come to stay. Recall that in the early 1990s, pure water was not very common in Nigeria in place was manually packaged water in hand tied cellophane bags called ‘ice water’ which was the common man’s way of quenching his thirst on the move.
This fast moving product has huge potentials but also has a lot of risk factors to deal with as with little over 5 million naira you can start a small production unit of between 1,100 to 3,500 bags (each containing 20 sachets) daily which you can sell at N70 to N80 per bag at wholesale whereas the cost of production is in the region of 74 to 85% depending on power supply and delivery costs.

The market is huge as at least 80 million Nigerians consume at least 4 sachets of pure water weekly and the population of pure water drinkers can only but keep going up with time. Secondly, pure water is relatively of equal value as some premium packaged bottled water which means some people who buy bottled water may start consuming pure water to make sense of their expenses. The success or otherwise of the business is driven by sufficient demand from the target markets, minimizing operating costs and working with an effective marketing plan that will enable the new pure water factory compete effectively against other operators.

Market Summary for Pure Water Production Business in Nigeria

  • Over 960 billion naira worth of sachet water is consumed yearly in Nigeria
  • Key market regions are densely populated urban centers with high commercial activities
  • The sales to operators constantly improves due to urbanization and population increase
  • Over 40,000 licensed operators in Nigeria operate pure water production plants from residential and commercial buildings
  • Entry requirement is relatively easy as within 6 months operators may be licensed to commence business

Opportunities that Favour Pure Water Production Business in Nigeria
  • Large population of city dwellers especially those living in slums
  • Inadequate portable drinking water
  • High population of informal commercial and business activities within limited land areas
  • High cost of bottled drinkable water and other beverages
  • Large number of corporate and social events within densely populated areas
  • Traffic congestion
  • Hot weather during the dry season
  • Among several other factors creates demand for pure water from many urban city dwellers 
Challenges facing Pure Water Production Business in Nigeria
  • High number of unregistered operators
  • High cost of machinery and maintenance cost
  • High operating costs with low profit margin
  • Too many operators working within a limited land area
  • Inadequate power supply
  • Activities of local government revenue collectors and tout
  • High employee turnover due to poor remuneration
Among other factors that cannot be ignored

Outlook for Pure Water Production Business in Nigeria                                                                                              The Market for pure water in Nigeria will continue to rise as long as there is inadequate portable drinking water, declining purchasing power, rural-urban drift, population increase and increased public acceptance of this essential commodity. Judging by past trends where inflation has increased revenue base for operators and current economic situation favoring hike in consumer living expenses, there is likely to be increased sales as well for operators. On the other hand, the challenge posed by poor road networks, power supply and rising fuel costs means operators will continue to struggle with low profit margins into the future.

Startup Costs for pure water Production business in Nigeria
In order to start a pure water production factory, there is need to check ensure that the most essential requirements are determined and met before actual production commences.
  • Dingli Pure Water Machine – 800,000
  • Borehole drilling – 150,000
  • Water reservoirs – 170,000
  • Borehole pump – 58,000
  • Store Shelves – 300,000
  • 1 pickup van – 1,500,000
  • 10 KVA generator set – 1,000,000
  • Other expenses – 2,000,700
  • Total – 5,978,700
Kindly note this is an estimate rather than an exact figure – inflation, traders’ margin and other costs not factored in.  

Paul Onwueme is a professional Business Plan writer since February 2014, has achieved respectable results with his business plan writing service with several of his clients securing funding and leaving positive feedback about his writing service. You can connect with him via phone: 0803 206 4106 or email: paulonwueme@gmail.com

Monday, November 27, 2017

Short Guide on Using Professional Business Plan Writing Service in Nigeria

Professional Business Plan Writing Service in Nigeria is fast becoming an all comer’s affairs. When you do a google search for business plan writing in Nigeria or similar keyword terms you will see dozens of entries by all kinds of people with questionable competence and qualifications calling themselves “professional business plan writers in Nigeria”.
That however is by the way, when you have picked a business plan writer in Nigeria to work with there are many things you should consider and even more importantly questions to ask so you can safely sieve out the pretenders from the actual contenders as far as professional business plan writing in Nigeria is concerned.

What to lookout for in a professional business plan writing service?
When you contact a professional business plan writer but you don’t really know for sure if he/she really knows his/her turf, be on the lookout for pointers to guide you. These pointers do not necessarily apply 100% conclusively of the time but they certainly provide some sort of background check into the business plan writer.

  • Competent Business Plan Writer

All competent business plan writers are original, gifted analysts and very effective business writers. The depth of their write-ups always creates a connection between the reader and realistic business expectations. There is usually little guess work but plenty of factual realities which must guide the reader to achieving realistic outcomes. You can often judge a competent business plan writer in a proper email or phone chat through the expression of his array of business knowledge even when he/she is not necessarily a specialist in any single business venture.

  • Proven Track Record

If you have been writing business plans for more than 3 years without being successful with any client securing funding, expressing satisfaction for the quality of work done nor any other positive feedback from a third party about the quality of the business plan then surely the use of such a business plan writing service can only amount to a huge risk run by a rookie and certainly not worth having.

  • Efficient Business Plan Delivery Service

There are ways in which every business delivers a service. When a business plan writing service is fraught with inefficiencies in how the client’s brief would be delivered and how disputes if any could be resolved obviously such a service is run by rookies. Check out the terms of service and ensure that all loopholes have been taken care of before taking up the business plan writing service.
When a Professional Business Plan Writing Service fails a standard test

There are key pointers to a fraudulent and incompetent business plan writing service. This, unlike in the previous point above (what to lookout for) is very conclusive in showing you the mistake in hiring a business plan writer who fails this test. Check out these pointers;

Stealing other websites’ contents
Some so called professional business plan writers in Nigeria often lift contents from other websites without acknowledging the source. They are very easy to catch, do a simple google search with many of their blog post titles and you will discover just how these dishonest writers pretend to know their work when in actual fact they are experts at plagiarizing other websites.

Giving very ignorant and irrelevant answers to simple questions
One clear instance is in their blog posts comments section. Reading through puts an experienced business owner off at the crass ignorance displayed when a quack consultant with expertise in many fields refers the people asking questions to other sources whereas his blog post is supposed to be a complete guide on the topic, even more comical is how the answer to many of the questions asked is a display of ignorance of what the actual question is. This should tell you straight away that you are in for a ride with someone who will both frustrate you and waste your money and time.

Professional Business Plan Writing Services (Final Tips)
  • Do more than 1 enquiry (don’t ask only one business plan writer about his services before hiring anyone)
  • Be patient, do a good research before contacting anyone
  • Do your due diligence. Find out more about their location and existing track records
  • Make sure your questions are open ended to put the business plan writer to the test about how much he really knows about business writing or general business management
Thanks for reading.

Paul Onwueme is a professional Business Plan writer since February 2014, has achieved respectable results with his business plan writing service with several of his clients securing funding and leaving positive feedback about his writing service. You can connect with him via phone: 0803 206 4106 or email: paulonwueme@gmail.com

Thursday, October 26, 2017

Sample Business Plan on Set up of a Petrol Station in Nigeria

Petrol Stations in Nigeria are very critical to the national economy. They are the main energy sources for powering automobiles, generating sets and other locomotive engines in the country. Due to their strategic role in ensuring that transportation services run smoothly, they also aid commerce and facilitate communication services. Without them, the Nigerian economy would collapse. Think back to the fuel scarcity period when economic activities are suddenly grounded because of long queues of vehicles around fueling stations everywhere.
In this sample business plan, I am assuming the filling station will only dispense petrol and sell other packaged products such as engine oil, grease etc and will also generate revenue from rent charged to tenants (tyre service centers, mechanic workshops etc). You can also start a petrol station without your own tanker, but that means you will have to rent one to supply your station. It is however better to own your tank because you can also make money from it by renting it out to other stations that may need it.

The petrol station business is relatively stable and sustainable long term business when located in the right place where adequate sales can be guaranteed. It is not suitable for people looking for quick returns on their investments within 5 years but for people looking at 10 or more years. It is capital intensive and
Market Overview of Petrol Stations in Nigeria
Petrol/Filling stations (or fueling stations) are part of the downstream subsector of the Nigerian Petroleum Industry providing; petrol, diesel, kerosene, engine oil, lubricants to name a few. But the main product sold is petrol for which local daily demand is over 40 million liters. Diesel is also sold but mainly in wholesale with distributors supplying homes, factories, churches, other private corporate establishments, shopping malls, schools, government offices and large transporters.
·        Diesel consumption in Nigeria as at 2016 was worth over 1 trillion naira but usually by commercial customers
·        Petrol which has the highest sale attracted over 3 trillion naira in sales
·        There are over 30,000 petrol stations in Nigeria
·        The largest regional markets for petroleum retailing are Lagos, Rivers, Kano and FCT
In addition to this, many petrol stations also retail cooking gas, household consumables and groceries. There are different categories of petrol stations in Nigeria depending on what they are retailing such as;

  • Standalone fuel dispenser pump (usually found in semi-urban towns
  • Mini fuel station (less than 6 dispenser fuel pumps) found in many towns
  • Standard fuel station (6 to 20 pumps)
  • Mega filling station (more than 20 pumps)

They are usually sited along busy roads, busy streets, close to very popular landmarks and in commercial settlements with high vehicular traffic.
The Nigerian petroleum downstream sector grew by 10.8% in 2016 despite the challenges in the industry among which are unstable products supply, uncertainty over price due removal of subsidy on nearly 90% average of imported products consumed locally.
Opportunities for Filling Station Business in Nigeria
From over 20 opportunities identified, these are just a few;

  • Petrol, kerosene and diesel remain the most affordable, available and viable energy sources for a larger number of individuals, families and businesses in Nigeria
  • Technology to develop alternative sources of energy is either too expensive or primitive at best
  • Nigeria’s population is growing fast with ever rising need for people to move, work and do business putting pressure on petroleum suppliers
  • Higher opportunity costs in the face of petrol scarcity implies that petroleum products are extremely important to the national economy hence there is a guaranteed market
  • Urbanization is increasingly broadening the daily demand for various petrol products

Some Challenges of Running a Filling Station in Nigeria
Among 25 identified challenges owners of filling stations in Nigeria would likely face, the following is just a shortlist;

  • Unstable Foreign exchange rates
  • Low production levels from existing refineries
  • Corruption among petroleum downstream regulators
  • Inconsistent government policies
  • Huge capital investments required for set up
  • Difficulty in accessing finance for expansion
  • Low profit margins
  • High cost of maintenance
  • Removal of fuel subsidy
  • Industrial actions from trade unions

Many of these challenges have negative impact on sales, profit and growth opportunities for operators.
The Future of Petrol Stations in Nigeria

With the effect of fossil fuel consumption on global warming, pollution and the need to conserve resources, many organisations are working out plans to reduce or eradicate altogether fossil fuel based vehicles in favour or more efficient and environmentally friendly sources. Already there are cars that run on hydrogen fuel gotten from water, ethanol, solar powered cars and Volvo has already made plans to start mass producing cars that don’t use petrol or diesel from 2019. Globally, demand for environmentally friendly cars such as Tesla have been seeing steady growth year on year.
Add the fact that fossil fuels are finite and will one day dry up, the future of this market is uncertain beyond 50 years from 2017 which means that we may not have profitable filling stations by 2067 or they would have been replaced by more environmentally viable service stations. Then there is the rapid global population growth which will only lead to higher energy needs, again reducing the available crude oil reserves further.
There is also shale oil which has been touted as possible replacement for crude oil and it is in even more abundant supply, but the problem is the technology for exploiting it is too much for now.
What are the Startup Requirements for a Standard Petrol Station in Nigeria?

  • Petroleum Stock – 4,800,000
  • 6 Fuel Dispenser Pumps (plus cost of installation) - 6,600,000
  • 1 Generating Set – 12,000,000
  • 1 NO of 33,000 liter Fuel Tanker – 35,000,000
  • Other stock (Lubricants, engine oil etc) – 300,000
  • Building Construction Cost – 80,000,000
  • Others – 6,700,000
  • Total – 130,400,000

Basic Financial Summary and Projections
Based on average daily sales of 21,000 liters of petrol @ 145 naira per liter for 360 days in a year and sale of other products plus rent income from tenants and (other indices not indicated), first year sales projection for a standard filling station could look like this;

  • Total Fuel Sales – N1,096,000,000
  • Other revenue – N38,641,000
  • Total Revenue – N1,134,841,000
  • Cost of sales – N1,089,447,360
  • Gross Profit – 45,393,640
  • Operating Expenses – 34,045,230
  • Net Profit before Tax - 11,348,410
  • Taxation – 3,404,523
  • Net Profit after Tax – 7,943,887 
Are looking to setup a Petrol or Filling Station in Nigeria and require a professionally written Business Plan? Give me a call: 0803 206 4106 or email me: paulonwueme@gmail.com to have one prepared for you