If you are thinking of starting a logistics business, then you have probably started to sketch out a rough plan but are unsure about where to start. It is more than likely that you have a series of unanswered questions that are burning a hole in your brain right now as you attempt to solve them.
The problem is that, even if you have a background in the logistics industry as an employee, starting such a complicated business is bound to dumbfound anyone who hasn’t done it before.
For instance, you will have to source major funding to start your logistics firm, as it is the type of business model that requires a great deal of upfront investment. After all, you will need vehicles to transport the goods; a team on hand to load, drive, and unload the deliveries; and somewhere to store all the items.
This can cause you to burn through cash at an alarming rate if you don’t know how to generate new leads or land a client. Therefore, you need to have a clear plan laid out before you set out on your entrepreneurial journey and learn as much as you can about the basics of business. This way, you will be far more prepared when you encounter the inevitable challenges along the way.
With that being said, here is more information about the basics of starting a logistics business from scratch.
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Invest in an efficient modern truck or van
The beating heart of your logistics business is, of course, the mode of transport that you will use to carry your customers’ deliveries. When you are just starting out, it is unwise to start looking at freight planes or ships, because it is simply far too expensive.
Instead, aim to focus on a relatively modest business model, by using a truck or a van. Depending on your finances, you may want to stick to a single van to start off with, or invest in a few trucks if you have significant capital behind you and you want to hit the ground running.
Of course, it is sensible to have your vehicles fitted with the latest technology to make the process more efficient and cost-effective—such as an electric truck air compressor.
Build third-party relationships to save on costs
One of the most underrated attributes of any successful logistics company is having a wealth of third-party relationships.
As you know, the logistics industry is essentially made up of one long supply chain—from warehousing to vans or trucks, to ferries, ships or planes, and so on. Unless you are a huge player in the logistics industry, it is highly unlikely (and would be unwise) that you will be able to invest in all of these areas.
Instead, you should focus on one area and then work to forge a partnership with another company that focuses on another area of the supply chain. This way, you can use their services at a significant discount, therefore increasing your profitability and decreasing your operational drag.
Start helping customers in the local area
When you are just starting out with your budding logistics business, you will probably be unsure about where your initial customers are going to come from. This is a perfectly rational problem to worry about, and in the logistics industry, a lack of customers can lead to some horrible overhead payments that need to be funded from somewhere.
Instead, think about your client acquisition processes rationally. Instead of shouting into the void when you don’t have much credibility, start by helping out people in the local area.
At a grassroots level, this could mean handing out discounted “man with van” delivery services or providing local businesses with cheap in-house delivery services. By doing this you can build up your testimonials and customer trust so that you can start scaling your services as soon as possible.
You can advertise in local newspapers and magazines, have your vehicle wrapped with your logo and contact details, and start sharing news of your business venture with friends and family—who might be able to put you in contact with potential customers.
Build a recognizable online presence
Once you have gotten the ball rolling with a few local customers, it is time to get your brand out to the wider world through social media. Obviously, it is best to start building your online presence straight away in the form of a website, but this is unlikely to be of much use if you can’t drive any prospective customers towards it. This is where social media content, paid ads, and search engine optimization come in.
By using these methods to raise your profile online, you will quickly start to see customers pour in through paid ads and feel the benefit of longer-term methods such as SEO and organic content when you can consistently draw in clients without lifting so much as a finger.
Offer bulk discounts
Another great way to entice customers in at first and to spend more money with you is to offer bulk discounts. This is a common tactic in the logistics industry for obvious reasons—if you are delivering a load for a customer, you might as well carry more.
By getting customers to buy in bulk, you are creating a subconscious reaction from them—essentially demonstrating that they must trust you and that your services must be reliable.
Learn to delegate
An underrated attribute of being a successful business owner is learning how to delegate tasks to your team and trusting them to complete the job to the best of their abilities.
Too many bosses either micromanage their employees and never let them do their job, or pretend to trust them with certain tasks, and then snatch back control later on when they lose trust in their own team.
This is no way to lead a company—especially at the start when you will struggle to convince anyone to believe in your uncertain dream. Therefore, hire the best employees possible, train them to the best of your abilities, and then trust them to finish the job.