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Starting Up A Business Branch In Nigeria - How Easy?

Hi guys,

This is my first post in the Business section, so if I make a mistake, please bear with me.

I currently own and run ******** Limited here in the UK. I'm an independent Audi / Volkswagen specialist, offering a bespoke service to owners of cars from the Volkswagen Group - that is, Audi, Seat, Skoda, Volkswagen, and recently added to the Group, Porsche.

Due to popular enquiries, I have decided to expand, and offer an all-makes service, so supplying parts and services for the aftermarket sector. This will include;

Audi

BMW

Daihatsu

Fiat

Ford

Honda

Isuzu

Jaguar

Kia

Lancia

Mazda

Mitsubishi

Nissan

Opel / vauxhall

Peugeot / Citroen (PSA)

Porsche

Renault

Saab

Seat

Skoda

Subaru

Volvo

Volkswagen

I have not included US-specific cars, like Mercury, Caddillac, Pontiac, Buick etc, as I've had no experience with them, and will only affer a service with models I am 100% confident with. All the makes listed above, I can find my way round easily.

I also operate a workshop here, which has a bodywork section, diagnostic section, custom conversion and general repairs section. Our parts / accessories department is online based, and quite diverse in it's products, besides the regular parts, we also offer custom parts and accessories to the automobile end-user.

I am now looking to set up a Diagnostic and Mechanical Service Centre in Nigeria, and will be looking at Lagos or Port Harcourt. Besides the regular maintenance and diagnostics, we'll be looking into offering RHD to LHD conversions, as well as catering for those that require a bespoke / custom service.

******** Limited was founded a year ago in the UK, and the set-up was pretty straightforward. What I'd like to know is, how easy is it to start up in Nigeria? What is required, premises, business rates etc? I know there's a Q&A section here, but I believe every case is unique, and will appreciate and advice the more experienced members on here could give me.

Thanks!

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35 answers

@Sienna.

How far on this prospect? I am ready to partner you biz with a franchise in Calabar

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Hey Sienna,

I trust your idea is still at W.I.P. I suggest you engage Nextzon Business Services Ltd, They are gurus in assisting to set up start-up companies google up their website.

I'am a business process development pro, I dont mind assisting you with free little research and networking within Lagos until you are fully ready to go. mail me at biggoozz@ymail.com.

Best of luck.

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Many are reserve about online business. Although it is true that some of this online business are scam. But you can go through this age with that mentality. Business generally involve risk, but I am presenting here a calculative risk of sure return. Dong online business is a sure and easy way to get rich now. To get the report on about 10 sure online business, mail me with subject tag ONLINE BUSINESS - ollystaffiliates@yahoo.com

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you have to check out stadium road in portharcourt.its in between GRA and TRANS AMADI where you have most of the producing and servicing companies.

if you are intrested i am. we would go through the safety managers i know.

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What about running a branch online? Online stores run 24/7 with limited or no running cost. The best i trust is wazaba.com, its Nigeria NO 1 online website for auction and fixed price sale. I did not pay a dime to open a branch on wazaba and i dont have any problem getting paid for goods sold. All you need do is log on to www.wazaba.com and sign up for a FREE account or email info@wazaba.com for enquires.

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i would like to be a partner, siena.

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That's a great business move Sienna, keeping a tab on you.

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Siena, whats the heads up on this? Remember I hinted you on a site that was more or less offering sumtin similar to yours but with a different marketing twist to it? Keep us posted buddy,

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Abuja, PHC and Lagos are the main cities for cars in naija.

Lagos has a lot of good workshops already, but charges seem to be high every where.

Phc still has a lot of room for a good auto repair shops.

When I see a lot of people buying modern/expensive tokunbo cars in naija I pity them.

They will be at the mercy of those butchers called mechanics.

Rents in PHC are high, so do not think that you can get a good place for less than N2.5m/year.

From what Siena has done so far, He will take the market easily any where he goes in naija.

But Siena, you need to look for young bright OND holders who are willing to learn.

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My limited experience:

First: Your workshop should be in Mainland; cheaper, easy access to port for parts.

You can have show room in Lekki/VI.

Second: You have to be physically present in Nigeria to run the Business atleast in the start-phase:

I was in cocharis for my Range. I was asked to pay something like 200,000Naira, I said NO

I got same boyz working for cocharis to do same thing for me at 15,000Naira! at a garage not far from their Kirikiri Workshop.

Third: There is HUGE potential for a clean garage that follows standard workshop practice.

Above all you need to target your MARKET otherwise all sorts will come to negotiate yeye payment with you!

Good Luck!

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Komekn, could you please contact me via YIM? I'll give you my email details then.

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Market research that’s a tall order to carry out, even if you are to carry out a limited sample survey, it is a resource based effort.

My deductions are not empirical but still have some level of credibility, they are from association and observation.

Kafin, your assumptions I would say are too far fetched and not necessarily the general trend. My friends, associates with their Ranges, F45’s, X5’s, MLs, & 300C’s do not give their cars to driver’s to carry out servicing, furthermore they don’t have a driver to enjoy their cars for them.

A situation where a main dealer Coscharis charges you a 100k naira to be a customer as I said earlier, tells you there is a huge gulf in the market.

My standpoint remains the same, Siena is offering something that is not available in the market, that I think the market is crying out for.

I am sure if Inspired-M, Friendl , Viperman & Jenju were asked what are the restrictions they experience in selling top end cars, it’ll be, where can I fix it, service it. [b][/b]

On marketing and market surveys I would not really like to give specific advice on an open forum, Siena, I will email you my thoughts direct to your email.

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Kafin, thanks for your input, much appreciated.

Looking at figures, and these are very rough ones, I also think Lekki or Victoria Island will be super expensive. One thing I'm not sure of though, are there business rates attached to business premises in Nigeria? If yes, roughly how much per annum?

I await Komekn's response on your query.

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@Siena,

If you need advice, chat to me on yahoo messenger is ayomidej@rocketmail.com and based in UK

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Oga Siena, I troway salute o.

Locating the shop in VI or Lekki will be an overkill (unless you dont have to pay for the land/rent). Nigerian car owners normally send their drivers to handle the service, and the driver will visit your location, within reasonable distance of course. You can put the money into parts and diagnostic tools.

With the Boss not around, selling "extra services" becomes very difficult.

I am sure you can spot the "mechanic nightmares" so that should not be an issue for you, but becomes a big deal if you put someone else in charge.

@ Komekn, maybe you can help us with a quick market research; how willing are the Nigeria car owners (let us look at cars made in year 2004 and above) to pay for all the recommended/periodic servicing of their cars?

My earlier comment about car owners surely is generic and was for cars made in year 2000 and above. In your opinion what % of car owners personally took their cars to the existing "quality service centers"?

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^^^ Point taken as per location, need to do a lot of research on that.

As for Chrysler, I know it's getting popular in Nigeria, the reason it's not on my list is I haven't worked on them in great depth, though I've done the usual on a 300C diesel - service, and other wear and tear replacement parts. I would hate to take a clients car apart, only to get stuck because I haven't torn one apart before.

All the cars I listed, I have stripped to their basic components, so I know them inside out. I believe one can offer a better service, not to mention quicker, if greater knowledge of the subject is available. I will probably add it to the cars I cater for in the near future.

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You are offering something that is not to date available in Nigeria, real performance auto engineering, not improvisation, ECU mapping and performance tuning, this is the real deal.

Using that as a baseline, there are a lot more people with performance cars in Lagos, and if my projection are right on the Island. You are not looking to do economies of scale with Ikeja mechanics and auto dealers, you’re service or shall I say LEVEL pass that one.

It’s not for people looking to ‘manage it’ but for those intending to get the best performance and service, people who want the best out of their vehicles.

Back to location do you know because of bad roads and poor road network there are some cars that you just cannot practically use in PH, however, you can in Lagos.

p.s. I suggested in the went missing post that you should add to your list, Chrysler particularly the 300(2004--) as its making inroads in the Nigerian market.

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@Siena,

Remember to update this thread with your findings. I hope you will have the time to check-out various classes of repair centers within lagos and other areas.

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Cost is a major factor, if starting in Lagos though, and though I'll be offering a very different service, competition for OEM spares will still be fairly heavy.

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@ Browne, I appreciate and value your advice.

I have also been talking with some Nigerian friends over here, who also see PH as the better area to open in, Lagos will definitely be expensive, and it is always adviceable to keep outgoings to a minimum, in any new business.

I plan to buy all my equipment (with the exception of a generator) here in the UK, and ship over.

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Sincerely speaking Siena, in my opinion Port Harcourt would make much better business sense than Lagos would and I would explain.

Lagos is saturated with lots of dealer outlets and auto parts of any type are very readily available. Port Harcourt on the other hand, a city that is in my opinion as rich as Lagos, has much less dealer outlets. Also it is pretty difficult to find quality auto parts in Port Harcourt. So the Market potential for you is much larger in Port since competition is much less.

The other factor that works against Lagos is the cost of real estate. First, be ready to pay somewhere in the region of 5 million per annum x 2 years for a suitable property in a good location in Lagos ( Lekki especially). Add that cost to the cost of a house rental and you are talking of maybe 2.5 million per annum.

In Port Harcourt on the other hand, you can easily get a brownfield, old & rusted, used and dumped Oil company Warehouse and easily convert it to a state of art Auto Workshop. Cost of rental and conversion would not set you back too much.

Also Port Harcourt loves to pay a good price for a good product or service while Lagos is always looking for a bargain.

So, my advice, take a trip to both cities a couple of times before making a final decision. Remember also that every investment in Nigeria comes with a large capacity generator to be run almost 24 hrs daily.

Finally, you will definitely be making much more money than you make in the UK. I can bet you on that one.

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i'll rather you find a nice location somewhere at ikeja, that is where business really happens in Lagos, also so many spare parts dealer that will give you your prospective clients have their shops there too, then ikeja is the city tht bridges the gap between the rich and the middle class.

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At the moment i am for my good works stuck in the North West's city of culture, it's rainy grey and cold, not flooded just wet.

Will not be in Nigeria until early next year, wishing you all Gods favour, nyovo.

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Yes, the spam BOT strikes again.

Komekn, I remember your advice, it's a shame Ivvie's no longer active, would have been great to have partnered up with him.

I'm going to be in Nigeria shortly, will have a look at the scene. Are you in the UK or Nigeria right now?

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Sound advice, komekn.

P.S There's a robot on the site that sometimes removes "good" posts as well as "bad" ones. Perhaps, it erroneously removed your first two.

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Siena,

I am not all that with all the dynamics of setting up in Nigeria, i can however, recommend someone to help you look for premises if you so wish.

If you recall maybe two years ago I made this suggestion to you and I think ovievie. the Nigerian market defies all the business models we have in the west, I explained that in order to have my car a Ford Explorer fixed by Coscharis I had to pay a 100k registration fee ,in other words paying for the privilege to become a customer(MADNESS) but I had no choice. Consider my friends who had a Range and the other one who had an X5 paid substantially more than me.

That clearly is telling me there is a huge void in the market which you will definitely fill, in one of your posts you gave me the impression you had not been back for a considerable length of time please, please, please make a couple of visits before you do anything.

p.s. This is my third post on this topic, someone in their wisdom felt it wise to remove the first one it seems, i hope i am wrong.

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Naijacutee, that's very sound advice, I didn't think of that!

I'll be more cautious from now on.

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Great post, Siena. I haven't got any automobile advice, but in Nigeria you will need to be slightly economical with details if you as much as suspect that they might be used against you. For example, disclosing your proposed company name here might tempt a misguided hopeful into registering it, with the intention of selling it back to you. Only part with information you're willing to let go of - Just my tuppence.

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@ OYINBOGOJU: Thanks, I'll do as you suggest.

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I THINK YOU NEED TO CONTACT LAWYER

(HE HIS THE MODERATOR OF THIS SECTION,HE KNOW ABOUT REGISTRATION VERY WELL AND HE HIS AVAILABLE TO HELP)

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OYINBOGOJU, very valid points you have raised here.

The idea is certainly to let motorists know there are alternatives to taking their cars to main dealers, at a fraction of the cost, yet still get quality service.

@ all: How feasible is it though, setting up a subsidiary of my company in Lagos? I do get a lot of enquiries here in Britain for parts, our culture of shopping online from a different country makes it awkward to complete transactions. We are looking to become a Performance Centre, as we are here. That means anything beyond what a regular garage would offer.

I realise the name I use here can also be used in Nigeria, just that it'll be registered as ******** Nigeria Limited, are there any issues with registration via the appropriate bodies in Nigeria?

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@SIENA

LEKKI IS A GOOD LOCATION BUT I WILL SUGGEST YOU OPEN AT IKEJA BECAUSE

EASY PATRONAGE

MOST CARS FIND IT DIFFICULT TO GET TO ISLAND,FUEL EXPENSES AND TIME TAKEN AND MORESO MAINLANDER DO THINK EVERYTHING THAT IS LOCATED IN LAGOS ISLAND IS EXPENSIVE,SO I WILL PREFER MAINLAND LIKE IKEJA.

THERE ARE SO MANY CAR PARTS SELLER AND AUTO DEALERS LOCATED AT IKEJA, WITH THAT IT WILL BE EASIER FOR THE SELLERS TO DIRECT A CUSTOMER TO YOU, AND EVEN EASIER FOR CUSTOMER TO LOCATE YOUR SHOP THEMSELVES.

BOTH RICH AND POOR MAKE USE OF IKEJA METROPOLIS, NEW CARS AND OLD CARS ARE PRESNT EVERYWHERE WITH THAT YOU WON`T BASED YOUR CUSTOMERS ON RICH PEOPLE ONLY.

I HOPE THIS LITTLE ADVISE COUNTS.

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Thanks, Komekn. I have been adviced to stay within the more upmarket parts of Lagos.

I'm also aware Japanese cars are more popular.

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