Ayo Alonge [email protected]
Bamidele Falodun is a licensed shipper and Chief Executive of Footies Autos, a startup that deals in cars and other automobiles.
In this interview, he identifies loan inaccessibility and naira devaluation as part of the challenges killing automobile startups in the country, while urging governments to support small businesses.
Growing up in Ekiti where most of the workers are basically civil servants, you will notice everyone depends wholly on monthly salaries. This slows down most people’s aim of attaining financial freedom for an average Nigerian. For me, I admired the freedom that comes with having one’s own business where your actions and input determine your achievements. It is usually easy to know where mistakes are made and proper corrections can be made quick. That freedom alone gave me the push to start my own business.
My personal experiences in the past, had thought me that business men and women were actually surviving every economic condition, no matter what. Beyond that I have always loved to be independent too. These were the major factors surrounding my startup, as a matter of fact.
Automobile business is a thriving industry that contributes a lot to the IGR of this country. This was not the first business I tried. I have owned a boutique in the past, where I was getting my wholesale items from a Mandelas, in Balogun Market, Lagos.
Unfortunately, burglars did not allow me thrive too much while doing the business in Ekiti. I was burgled twice, lost a lot of money in the process.
So, I stopped and started selling men’s shoes in Ibadan, and running the automobile business on one side, selling Nigerian used cars with trusted history of previous users.
I picked interest in this business through an uncle of mine who was shuttling Nigeria and Benin Republic way back, doing the same business. It was fun for me going on occasional trips with him to Cotonou. The fun of searching for preferred cars, buying and doing the customs clearing and dispatching the vehicles to Nigeria, and of course the profit was really nice back then. He’s now out of the country and doing pretty well and still does the business too. I used to assist him move cars around, doing dispatch of vehicles in the past.
I have tried my hands on fashion business from 400L in the university, during NYSC and after the service year. I had saved enough money and I was able to buy a Nigerian used 1998 Toyota Camry as my start up in the automobile business. I managed to put the car to shape and sold off to a customer, I made a reasonable profit, and then I went to Cotonou with the help of my uncle, and bought my first Tokunbo Volkswagen Golf 2. I sold the Golf right in Igolo before I could even start processing the customs duty. It was really a great start for me, so it was easy to raise funds quicker.
Every business has its challenges, but the most important one in this business is the fact that the government of Nigeria and corporate bodies do not usually grant loans to push this business. Automobile business is a money based business, so you need a proper in-flow of cash to keep up with demands. It is pertinent to note, hence, that you may not even have any car available for sale, but money must be available every time, if the enterprise must grow. And secondly, the stability of our economy in Nigeria is a major challenge.
Take for instance, the same cars sold in America in 2017 at $1,200 is sold in 2020 for about $900 or lesser. But our naira’s constant devaluation has not really helped the business. So, even the amount of money we spend in exchange rate kills the urge to even do business since the Federal Government does not grant us access to the CBN Forex to enjoy a good exchange rate. Now, we have to opt for the black market which becomes the hard way and the only way for us.
Thank God for good friends and family and of course investors. My credibility over time has helped me earn some customers who are now returning as investors.
We usually split profits and it helps a lot when someone trusts you enough to invest in your business. And as for dollar sourcing, we have a community of legal immigrants abroad who need naira here for projects or personal us. We use their dollars to make payments for our cars over there and settle their naira needs here. Usually, the rate is always manageable compared to the black market rates.
It is a profitable business, if well managed. The automobile business of today is a bit tricky. If you are not calculative, it’s easy to run into loss. So, I will say it is a 50/50 chance, you have to be at your ‘A’ game to make good profits. For some of us buying from auctions, it is very easy to run into loss because most of the actual condition of vehicles are not always known prior to purchase. But in all, if one is calculative. Like I explained, you can pay all your bills as and when due, using profits from this business.
I do not see any competition in this business. The reason is because we all work together. It is more like a network thing. You have a car for sale, you need other car dealers to sell too. So, we need one another to survive. As a car dealer, you cannot have all the cars for sale. It is not possible. I run businesses with Lagos car dealers and all parts of the country provided there is trust. You can be anywhere and still run your business. In this business, you are your own competition. Everyone wants to put a smile on their customer’s face because that is where referrals work.
Over there in Europe, they are a little bit more organised in developed countries of the world. I believe we will get there too. There are laws binding every automobile business owner abroad. You cannot just wake up and start putting cars in front of your house for sale. But here in Nigeria, everyone at some particular point is literally a car dealer. Automobile business owners in America have access to bank loans which enables them meet market demands. When the system works, everything will follow suit.
I have considered loan acquisition. There is no amount of money I cannot manage. Most of all the successful businesses in Nigeria today live on loan from banks to reach their sustainability. In my opinion, huge loan would be a morale booster for an expansion. The interest should be a little bit moderate too.
Basically, organising orientation classes for people on how to get started on credible auto auctions in America. There is a digital way of buying with ease in the comfort of your homes or offices. I have introduced this medium to most of the dealers around me. Most of them are elderly and do not really understand what it takes to do these stuff online. I help them with procurement of vehicles, thereby boosting their businesses even more.