5 Important Tips and Considerations for Building a Thriving Logistics Business
As “the spice must flow” in the cult sci-fi movie Dune, so must trade in the real world. Without the appropriate logistics companies, we would have to travel hundreds of miles, each day, to get our hands on bare necessities; including food and drink for sustenance, pharmaceuticals for health, coal for energy, and so on.
According to a recent report, Australia imported some $227.3 billion worth of goods last year, which represents roughly 1.3% of overall world imports; talk about value. So, the demand for a logistics business is certainly out there. Yet, what does it take to succeed in this industry? Continue reading and find out.
Conduct thorough competitor analysis
Before you launch your logistics business, you need to realize one thing — you’re the new kid on the block. Meaning, you will most likely have to play catch up with everybody else. Nevertheless, despite your inexperience, you don’t have to start entirely from scratch; there are others on the market that have already established their respective brands and perfected their business models — your competitors. Hence, you only need to take a sneak peek to find out the general direction the market is headed. By doing so, you will also gain some valuable insight into the best industry practices and the wants and needs of your specific target audience, allowing you to tailor a custom-fit business model.
Once you know exactly how you fit into the whole competitive landscape, you can slowly begin distancing yourself from the competition to grab your customers’ attention; simply put, you want to stand out from the crowd.
Develop a sound business plan
If you’re just starting out, chances are you’re not going to self-finance the entire project; especially not out of your own pockets. This will only slow you down and prevent any future growth. After all, credit loans for a logistic business can go anywhere from ten to a few hundred thousand dollars. Instead, what you want to be doing is attracting investors and venture capitalists to really snowball your startup; and what’s the most important prerequisite for this achievement — a well-developed business plan! Take pillarlogistics.com for example. They are a successful logistics company that followed a business plan and are seeing lots of happy customers because of it.
In essence, this plan should entail everything from storage facilities and warehouses to routes and cargo. Include all the deadlines, transportation costs, and projected profits into your planning to come up with the most optimal solutions. This will give you — and your prospective investors — a good idea on how best to maximize your profits.
Get proper insurance coverage
Running a logistics company carries its own set of risk. For starters, your trucks can participate in costly road accidents where either the driver or the goods get damaged. Consequently, you’ll be held responsible by your client and you can even get called to court if you cannot pay them back for the damaged cargo.
Hence, you need to get yourself some adequate insurance coverage. Vehicle insurance goes without saying but there are also other types that you need to consider; including professional liability insurance, workers’ compensation, general liability insurance, and more. Having a sound risk management strategy in place will ensure that your business doesn’t fall apart at the first sign of trouble; lawsuits, in particular, can be devastating for a small business.
Find the appropriate vehicles for your business
When it comes to logistics, you can’t just buy a one-size-fits-all type of truck and be done with it; in essence, there’s no such thing. Instead, you need to get your hands dirty and find trucks for sale that are right for your particular business.
For instance, moving companies will use a totally different design than, say, courier companies; usually, these will be long-haul trucks that can carry more cargo during longer trips. Therefore, you need to ask yourself the following:
- What type of terrain will I be driving over?
- What type of cargo will I be carrying?
- What will be the volume of the supplies in question?
At the end of the day, purchasing the right kind of vehicles for your business will ensure that your drivers have what it takes to get the job done; in other words, optimal transport and faster deliveries.
Hire the right drivers
Besides your vehicles, the most valuable asset of your company is your workforce — in other words — your drivers. Essentially, they are the ones that will engage your customers once they make their delivers and, in doing so, represent your brand. If you hire them solely on their ability to drive and haul stuff, you run the risk of losing your hard-earned reputation and all those timely deliveries will be for nought.
By hiring only the most qualified — and the most experienced — of drivers, you will not only make your business appear more professional but reliable as well; nothing breeds distrust like an incompetent driver. Apart from the more obvious features, such as holding relevant licenses for the different types of trucks and hazardous weather training, your drivers need to display some relevant soft skills as well. Just remember this: your truck drivers are the face of your brand; how do you want others to perceive you?
Launching a logistics startup means venturing into highly profitable market with a promising future and high chance of success. Use this advice to build a flourishing logistics business and develop your brand that will stand the test of time.
About the author:
Mike Johnston is an avid freelance writer and blogger from Sydney, Australia. He’s a regular contributor to numerous blogs and online magazines, where he writes about small business, entrepreneurship, lifestyle, home improvement and other related and unrelated topics. Mike’s goal is to create insightful and compelling content that will help readers navigate through these vast and ever-changing fields.