How to Start a Transportation Business in 2021

How to Start a Transportation Business in 2021

 

Many years ago, yellow cabs were the kings of New York, until out of nowhere Uber came on the scene and changed the scene and face of transportation business for good.

Modern transportation businesses ranges from personal dispatch and moving and storage services, to large scale freight operations.  But depending on your level of interest as a future new business owner, you have plenty of options you can explore in order to get started in your transportation business.

 

In this practical guide, we will be providing detailed information of everything you need to start a transportation business. Contrary to the opinion of many, that transportation business is now saturated with new start-ups like Bolt, Lyft and Ola, who are now making waves in the transportation sector, that transportation business may no longer be profitable. What they have failed to understand is that, when we talk about transportation business, it is beyond cab hailing service.

 

Transportation business is broad and not just limited to cabs or moving from one point of the city to the other. So before we go straight to the point of educating you on the steps you will take in starting your transportation business, we will however want to look at different types of transportation business you can start, so you will be in a better position to choose the one that is best suited for your interests, skills and available funds.

 

So whether you want to start a long haul transportation business or a cab hailing service like Uber, or boat transportation, we have got it all covered.

Here are different types of transportation business you can start:

 

  1. Taxi service

Uber and other cab hailing services have made starting a transportation business as a Taxi driver very easy and cheap to start. All you simply do is register on Uber website for instance, by clicking on “become a driver”, fill out a form, pass some basic tests and background checks and you will already be on your way to making money as a taxi driver.

The good part is, you can register as many vehicles as possible and get other people drive them for you and sit back and make your money. Uber is currently operating in over 65 countries and 400 cities, there is a possibility that they are probably in your city or state.

 

  1. Bicycle rental

Have you ever considered the fact that you can profit from transportation business, simply by renting bicycles. If you live in a big city, you can take advantage of the influx of tourists and start your bicycle rental transportation business.

With the lock-downs occasioned by the corona virus pandemic for instance, and more so, the need for people to live healthier lives, it implies more people now rent a bicycle to move from one point of the city to the other.

 

  1. Limousine service

Celebrity lifestyle has a lot of pomp and pageantry, but not many celebrity buy their own limousines, so you can start your transportation business by proving limousine rental services.

You can operate the limo yourself, and your fleet of one limousine will be relatively easy to maintain. You can provide all the service yourself, from scheduling to driving. If you want to expand, just add vehicles and drivers, and keep expanding your marketing to keep business flowing.

 

  1. Owner/Operator trucking

With most manufacturing taking place outside the city centres and across borders, it means there is need to transport goods from one country to the other or from one part of the city to the other. Trucking business simply involves bidding for contracts and delivering on the contracts. You can operate your trucking transportation business by either getting a contract and get drivers, who have their own trucks to deliver the orders, or buy your own trucks and get drivers to work for you.

 

  1. Moving van business

People are always moving houses, or they always have items they move from one place to the other. So you have the opportunity to start a moving van business, helping people move their belongings.

You may even decide to offer add-on services like mini temporary storage facility.

You only need at least one employee to help you with packing, moving procedures etc.

 

  1. Specialty transportation

You can start a specialised transportation business, helping hospitals for instance transport blood, or help companies transport big aero-plane parts or perishable goods. There are many goods that needs special transportation, it depends on where you live, so why not look around and start your transportation business delivering special packages.

 

  1. Livestock transportation

If you live in the country side, you would have seen that there are many horse stables for instance. The horses are moved from one place to the other, either it’s a tournament, vent appointment or something in between. You can start your transportation business carrying out this service. There is also need to move other livestock, so there is a huge opportunity in this form of transportation business.

 

  1. Boats

Boat transportation is a lucrative business, though it is seasonal. You simply have to decide the types of boats you want to transport, as a speed boat or sailboat will not have the same requirements.

 

  1. Air transport

You can start air transportation business without necessarily starting an airline. You can buy a small plane or helicopter for instance, and use it to transport hunters or skiers, you can also deliver goods to islands.

 

  1. Marine shipping

You have probably heard of crude oil or petroleum products or seen containers by the wharf or seaside. Marine shipping is often done by tankers stacked with containers that get lifted off the trailer of an 18-wheeler and stacked on the boat.

 

  1. Medical transport

You can start a medical transportation business by helping to transport people to medical appointments for instance. You simply need to be able to fit wheel chairs into the car and you are already in business.

You can enter into contracts with hospitals and help them drive their patients to appointments outside the hospital for specialised treatment.

 

  1. Senior services

If you live in a country where their senior citizens relinquish their driver’s license as they get older, you can start your transportation business, by helping to drive the senior citizens to the places they want to go. Beyond medical appointments, you could drive seniors to the grocery store or to outings at the mall.

We have been able to highlight the different types of transportation business you can start, as the option is not just limited to starting a taxi business. Now that we have shown you the different areas, it is now time to show you the practical step by step guide on how to start and profit from your transportation business.

Paying close attention to this steps will determine how profitable, challenging, stressful or otherwise your transportation business will be. So pay attention to the things you will have to learn, study and acquire before you set out.

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  1. DECIDE ON A TRANSPORT NICHE

We have already highlighted above the different types of transportation business, so you have to begin by deciding who and what you will serve. What niche will you serve? As mentioned above, there are different categories of transport companies, and you may need to select only one in order to be successful.

 

The best part about step one is that the possibilities are nearly endless! You can start anything from a bicycle rental company to a logistics corporation, or a medical transport service. Before settling for a niche, you have to do a research on the demand needs of that niche, then make your decision.

 

  1. CHOOSE A BUSINESS MODEL

It is very important that you run your business in a professional way, so it is required that you get your company registered. And getting your business registered means you will have to choose a business model, after you have identified your niche.

Generally, there are three business model you can adopt, a sole proprietor, limited liability partnership or limited liability company. So reach out to the company house in your state or country and get your business registered. You may decide to seek the advice of a lawyer to guide you properly on the business structure that will be best suited for your transportation business.

 

  1. REGISTER AND GET YOUR FEDERAL TAX ID NUMBER

Immediately after registering your company, the next step is to get your tax ID number. Transportation business requires some levels of licenses and permits, and without getting your tax ID, you will not be able to get the permits and licenses. Besides that, you will not want to run a business, where the authorities are on your neck daily for failing to remit your taxes.

 

Depending on the state or country you live in, you may need to apply for a federal tax ID number, or employer identification number (EIN).

The EIN process is fairly standard, and having this identification number:

  • Makes it easier to file quarterly and yearly taxes
  • Can protect you or your business from identity theft
  • Speeds up the business loan application process

 

  1. APPLY FOR LICENSES AND PERMITS

Transportation business is not such that you just wake up one day and hit the road. You need to get the right permits and licenses. Not all types of transportation business require the same level of permits and licenses, as there are differences when you are handling passengers or cargo’s for instance.

If your area is in freight management or operations, there are specific requirements to follow, depending on the weight and size of the goods you will transport.

The most basic types of licenses and permits are:

  • Commercial driver’s license (CDL)
  • Commercial vehicle registration for any fleet vehicle
  • Fuel carrier licenses
  • Heavy load or cargo permits
  • Insurance coverage for drivers, passengers or goods

 

  1. SET A BUDGET AND FINANCIAL EXPECTATIONS

It will not cost the same amount to start a taxi business and a truck haulage transportation business. Depending on the type you choose, you have to plan for costs and how to raise the costs if you have not done it, as running a one-vehicle taxi service is bound to be much cheaper than a full-fledged logistics fleet.

 

So the big question is, do you have the funds ready or do you need a loan to get started? If you need a loan, you can check with your bank, credit unions or the Small Business Administration.

Going with the loan option will require you to write a detailed business plan, as how convincing your business plan is, and your credit history, will determine if you will be considered for a loan or not.

Your business plan should be able to capture your financial projections, which will highlight

  • What revenue you need to maintain to clear operating expenses
  • How much to invest in supplies, equipment and manpower
  • The specific amount of debt your business has in loans or other expenses
  • What amount of money you are willing to invest in marketing and advertising

 

  1. BUILD YOUR FLEET

As there are different types of transportation business, so also is the types of equipment and tools needed to be successful in the type you choose. For instance, if you are transporting goods or people, vehicle size may not have to be the same, and it may require you to fit in a refrigerator or adapt your vehicle to transport wheel chairs, it all depends on your niche of the transportation business.

Here are a few things to ponder as you make vehicle purchasing decisions and build your fleet.

  • Will you need to transport any passengers?
  • How heavy are the materials you will be transporting?
  • What kind of ground or terrain do you need to cover on an average trip?
  • What wear and tear might you need to expect on a regular basis?
  • Are there any fuel-efficient or sustainable options to choose from?

Take your time to research the best options based on quality, price and safety. All of these factors are extremely important as you establish your transportation business.

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  1. ESTABLISH BEST HIRING PRACTICES

If your niche from the start is Uber taxi and you are starting it with a single car, you may not have the need to recruit any staff, but as your business grows, you will have to incorporate best hiring practices into your business plan. This will help to ensure you are following best practices with regards to local and state employment laws.

 

Although your list of employees might include you and only a few others to begin, think about ways that your company could grow. In addition to drivers and service providers in the field, what other positions do you need to think about down the line?

These positions might include:

  • Office and administrative staff
  • A team of maintenance technicians
  • Sales and marketing professionals
  • Human resources (HR) staff
  • Part-time or seasonal employees

 

  1. MAINTENANCE AND REPAIRS

Your brand new vehicles will eventually get old, due to wear and tear. It is very important that from the beginning you have a projection of what will happen in the future. What plan will you have in place to handle break-downs? How often will you carry out safety and quality checks?  How will you keep up with routine maintenance to ensure that your customers don’t experience any gaps in service?

 

Depending on the country where you are operating in, laws regarding permits and licenses renewal might be different, so what is your plans on certifications and renewals?

While it’s easy for the small details to get lost in the shuffle of everyday operations, setting up recurring reminders or putting a specific employee in charge of routine checks can prevent many problems.

 

  1. START ADVERTISING

No business, not matter how beautifully set up, will make any impact if not marketed effectively. So now that you have everything in place to get your business going, it’s time to think about how you can market your transportation business.

Any advertising will massively depend on your niche and the target audience, and since you have already identified your audience, you should create adverts using the right channels to target them.

 

For instance, you can use Facebook advertising, which is highly targeted to help you reach the right people. Another option is Google Ads if you have the budget.

Don’t forget to set up your Google my Business listing and keep it up to date. A website might be worthwhile as a long-term investment but isn’t actually a necessity while you are starting out.

Word of mouth should be your favourite and cheapest option. Traditional media should not be forgotten also. You can write a press release announcing your new business in key motor and vehicle trade publications, as well as traditional adverts in the press and other media like radio and television.

 

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Mistakes to Avoid When Starting a Transportation Business

The reason we have taken time to produce this practical guide is to help you become successful and profitable in your transportation business, and we can assure you that if you follow the above steps, you will already be half way to success.

 

However, there are mistake you must avoid at all costs if you want your transportation business to be successful. They are as follows:

  • Ignoring the rules of neighbouring states and locations:
  • Forgetting to insure every aspect of your business:
  • Failing to incorporate contracts and waivers:

 

Final thoughts

Our promise was to give you massive value by giving you the detailed information on everything you need to start and profit from transportation business. There is no doubt that by all indications, we have done justice to this. Our question to you now is, are you willing or ready to start and profit from transportation business? It will make little or no sense if you end up reading this guide, without the willingness to take action. Are you bold enough to take action? Do it now!

What are your thoughts with regards to this guide and do you have any business idea you want us to write about? Let us know in the comment section.

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