Did you know the transportation and warehouse industry in the United States is worth about $1.3 trillion? After a period of stagnation between 2014 and 20116, the industry is now expanding, with experts estimating 2.9 percent growth in 2019.
If you’re looking to start a transport business, now is the best time. No doubt.
However, a thriving industry doesn’t necessarily mean your business will dive right into profitability. You’ve to make the right moves right from the start.
Keep reading to learn what it takes to build a transportation business that will go all the way.
Determine the Type of Transportation Business You Should Start
There is a reason this industry is worth more than a trillion dollars. It’s primarily because it hosts a wide range of transportation businesses, from taxi and limo services to moving vans, freight truckers, and air freight.
So, which kind of business should you start?
It all depends on the market you’re targeting (demand for the service), as well as capital requirements. This means you’ve got to research the market and use your findings to determine the most ideal transportation business.
In general, though, the American market needs more trucking business. The demand for trucking services is on a sharp rise.
Draw a Business Plan
A transportation business, however small, can be a complex enterprise with many moving parts. This is why you need to draw a detailed business plan before you enter the market.
Your business plan should include the following details:
(Proposed) name and location of the business
Types of transportation services offered
Capital requirements and financial projections
Sales and marketing strategy.
Secure Adequate Funding
Most transportation businesses are capital intensive. Assuming you’re planning to open a general freight trucking business, for example, the cost can run well past $500,000. Besides the typical expenses like registering the business and renting office space, you’ll need to buy or lease trucks and other trucking equipment, hire drivers, and purchase liability insurance.
As such, a crucial step in opening a transport business is securing adequate funding.
If you’re self-funding the business, thumbs up. Proceed to the next step! But if you’re short on funds, you can try securing a business bank loan, borrow from family and friends, or bring in an equity investor.
Set Up Shop
With the funds ready, it’s time to spring into the real action.
First, register the business in your state and obtain the necessary licenses or permits. Next, set up your commercial space, secure the vehicles and other equipment, and build a team that includes office personnel and drivers.
At this point, you’re open for business. However, clients aren’t just going to walk in. You’ve to advertise your new business.
Remember the marketing strategy in your business plan? Implement it.
Gradually customers will start buying your services, and your vehicles will hit the road.
One thing you’ll quickly notice, though, is clients will take some time to make payments. Don’t let this affect your cash flow. You can use an invoice factoring service to get cash advances. Click here to learn more about this service.
Start a Transport Business the Right Way
The industry is ready for new businesses, but you shouldn’t rush. If you do, you’re headed for a crash. But with this guide on how to start a transport business, you’re in a good position to take the right steps and improve your chances of success.
Good luck and keep reading our blog for more business insights.