Logistics is a big moneymaker, with high demand. This is because of the growth in products needing to be shipped from one place to another, a demand that shows no signs of stopping any time soon.
Not to mention the constant increase in online shopping demands meaning deliveries of consumer goods to residential houses as well as businesses paves the way for more logistics and carrier companies to get on board.
The key area to concentrate on within a logistics business is not necessarily a challenging startup, but the demand for keeping the business running successfully. To do this, you need to be savvy in this particular business area and understand your services, business plan, and finances.
Here are five helpful tips if you’re looking to move into the transport game.
- Build a Firm Foundation of Knowledge
As with any business venture, you need to have some form of background knowledge about the category you’re moving into. To have a better chance of succeeding within a competitive logistics market, you should ideally have experience, and knowledge and qualifications regarding import and export, manufacturing and transportation.
A qualification such as a Graduate Certificate in Supply Chain Management can set you along the right path and lay the foundation for a better start at your business.
If you don’t already have this sort of business knowledge, you may want to look at building this up first before you move to begin your logistics business.
- Understand Your Budget and Costs
This is true of any business, but specifically for logistics companies, you need to consider a number of outside factors and outgoings to keep the business running.
These outgoings include:
- License expenses
- Toll payments
- Vehicle costs
- Fuel costs
- Driver training courses
- Operating costs
- Maintenance costs
- Security expenses, such as vehicle storage and protecting vehicles in transit
- Staff wages and other general expenses
With logistics, you need to prove to customers and clients that your service can be depended on. This means that a lot of money will need to go into the maintenance of vehicles to ensure that they are always fully functional and avoid delays such as breakdowns, as well as ensuring driving staff are highly trained and therefore able to deliver smoothly and on time.
No client is going to want a delivery delayed due to a lost driver or a vehicle that has broken down. It is mistakes such as these that will see clients seeking an alternative logistics company that they feel they might be able to depend on more.
- Decide How Big You Want to Go
Do you want your logistics company to be huge, with a large fleet of trucks? Or are you looking for smaller, more local delivery potential? Or are you hoping to specialize in a specific area of transported goods? The bigger you want to go, the bigger the initial costs you may need – but hopefully, it will result in bigger returns as you expand. You may have a smaller list of clients who spend more for larger deliveries or have a high volume of clients who spend less at a time.
What Kind of Transport Business Options are Available to You?
In order to understand how big you might want to go, you can consider the following categories of transportation and logistics:
- General trucking
- Delivery of goods from a business to a client
- Small courier business
- A moving van business, to assist residential or commercial clients with their moving needs
- Specialist transportation, wherein your business will move a very specific category of items
- Livestock transportation
There are many more categories available, but this list is just a starting point to consider what scale you would prefer to be looking at.
- Build an Easy Booking System
Those logistics companies which are easily booked and managed by clients are favorable to those which have lengthy booking processes. Clients who may need to book a high volume of deliveries every day and have chosen your business to fulfill this need will not want to be caught up with complicated booking procedures for every consignment.
Therefore it’s a good idea to consider how you want to develop an easy booking process. In this day and age, online is always beneficial (and preferred) by many people. Clients like the ease of being able to simply click and book a service online.
You may want to offer an online account service wherein customers can easily log in, book and track all consignments. If this is the case, you will need to budget and plan for this form of system to ensure that it works efficiently and smoothly.
You don’t want to offer only a phone number and telephone booking system. Using the telephone is quickly becoming outdated in the world of online transactions and businesses, and if you’re looking to have a high volume of clients – which will naturally be the goal – then to only have a telephone booking line means that you will run the risk of lines being busy, impatient customers being on hold, and a need to pay wages for employees who need to answer and take calls.
- Do Thorough Competitor Research
You need to know who you’re up against. The logistics industry is very competitive, which means you need to understand what you need to do in order to set your new business apart. A lot of this will depend on the delivery service and timescale. You can offer everything in the same way as a competitor, but if they offer next day delivery and you only offer standard delivery, then you’re immediately on the back foot.
Of course, a lot of it will concern the quality of service – a competitor may offer next day delivery but if their service is terrible and yours is excellent, you’ll undoubtedly gain a more positive reputation. Yet, you need to take the time to understand what other logistics companies are offering, how successful they are at it, and how you can make your business stand out from them.
Check out my guide on how to start your business right with tons of useful tips I learned by successfully starting, building, and selling multiple companies.