Intro:
Since the United States is an expansive territory, it always needs transport professionals to move goods, people, and materials. Therefore, starting a transport business is a viable entrepreneurial venture.
Types of transport businesses include:
- Taxi and car services
- Moving
- Delivery
- Medical
- Rentals
Even though they provide different services, they all require the same startup steps. They also require additional steps you’ll find outlined here.
Here we review seven steps for starting a successful transport business.
1. Pick Your Niche
A successful transport business starts with picking a niche. For example, do you plan to transport goods or people? In addition, you might decide to transport pets. During the pandemic, pet owners had to ship their pets on separate flights and transportation vehicles. The lockdown rules didn’t allow them to travel together.
Therefore, another niche option is animals. Sometimes individuals purchase pets in a different state. They can’t pick them up so they book a service that will deliver their new furry friends to their homes.
When picking a niche, you might consider where your passion lies, the ones in most demand, and the profit margins for each. Then, you can make an informed decision.
2. Register the Business
Next, you’ll need to register the business. Different states and cities have different requirements. For the most part, you’ll need to obtain a business license and Employer Identification Number.
If you plan to haul goods, you’ll also need to obtain a US DOT and Motor Carrier Authority Number. The extent of the licenses and permits that a transport business must acquire depends on the niche. Nonetheless, freelancers will complete several forms and pay the fees.
3. Invest in the Equipment
Once you know what services you will provide, you can start investing in the appropriate equipment. For example, entrepreneurs who want to open a moving business will need to purchase a couple of box trucks, blankets, straps, and belts.
Others prefer to transport people. Thus, they decide to open a car service or limousine company. The more cars and limos that you can acquire, the more revenue the company will earn.
4. Purchase Insurance
Transport companies must obtain a series of insurance policies on top of general liability and business.
First and foremost, you must insure the vehicles that the company operates. Then, you must purchase insurance to cover accidents and the people or goods that your team transports.
Insurance is important for protecting the assets of the company. It’s an investment that protects your business income in case something goes wrong.
5. Acquire Customers
Once you know the niche that you want to enter, you can start marketing to capture those customers. For example, if you decide to open a car service business, start by contacting corporate travel managers.
These managers book travel for corporations and enterprises. Thus, they’re willing to pay above market rates for exceptional service.
By employing online and offline marketing strategies, business and leisure travelers can find and book your company’s services.
6. Hire a Team
A transport business can start small. Once you acquire enough customers, you can start scaling your team and equipment. Transport companies require more drivers than staff. Therefore, focus on finding the most reliable drivers who have clean driving records.
Once you build your team of drivers, you’ll need to hire dispatchers and those who can effectively run the business operations department.
7. Review the Financials
Entrepreneurs must keep a close eye on the financials. Most new companies fail in the first two years because they run out of cash flow. It’s normal to run a business with a tight belt in the first few years. Even if the demand for your services is high, keep the debt levels low and available cash high.
Remember that it’s OK to start small. Even Amazon only started with a few cargo vans. Now, the company has built its delivery component into a fleet that delivers across the country.
The goal is to balance growth with healthy finances. Otherwise, you’ll negatively impact your company’s ability to borrow to expand.
Conclusion
Transport businesses will remain in demand, especially since there are many types to enter. By following the basic steps that we outlined above, you can build a thriving company that has room to grow.
