Archive for January, 2011

How to start a transport business

January 21, 2011 120 comments
Colourful Volvo F12 and FH12 recovery vehicles...

Colourful Volvo F12 and FH12 recovery vehicles outside business premises, Dallinghoo, (Photo credit: Wikipedia)

Many people are lured into the transport business without really counting the cost. I was reading a transport forum a few weeks ago and someone said, ‘Why does every Jack and Jill want to get into the transport business?’ From a distance it looks like a piece of cake, you buy the trucks, get a driver and get on with it.

In reality, from the get go, there are numerous hurdles to be overcome. It may be difficult to get finance to finance your business because many financial institutions require that you have a long standing contract to ensure that you can pay back the loan. The transport business is high risk and the banks are very cautious when lending money. This should get you thinking, why don’t banks hand out money on a silver platter if the business is so lucrative? This is because many fail in this business. This is no reason to fear, many do succeed, but it takes hard work and focus. My advice is, do your homework thoroughly, work hard and you will succeed. There is always a need for transport recession period or not, running a profitable transport business is the hard part, don’t end up as a casualty. Do your homework.

I met with a client last year and I asked him a few questions about the business. I asked him, what his costs would be and he started running some figures in his mind, 5000 for fuel, 1000 for toll gates etc, about x amount he said confidently. Do you see anything wrong with this picture? By the time you get to an advanced stage of starting your business you should have some spreadsheets with clearly calculated financials. Working things in your head is a sure recipe for disaster, if that is all you have done regarding your financial projections. In this business, you cannot afford to go on presumption, not that you can do this in any business. You need to find precise facts and calculate your costs as accurately as possible. Don’t wait for surprises, because surprises can be very expensive. If you haven’t put aside some money for breakdowns, this alone can cripple you financially and will affect your bottom line severely and this is bad news for your business.

Here a few general steps, to consider. These are not exhaustive, but give you a few things to think about.

1.    Step 1

There are many types of transport businesses from which to choose, including: a limousine or taxi service, medical transportation, courier service, auto transport business, charter/bus company and trucking. Each type brings with it its own challenges, so choose a business that does not have a lot of competition in your area. Similarly, make sure you do your due diligence to ensure that there is actually a need for this type of transport business around your location.

2.    Step 2

Next, contact your local public utilities commission and find out what you need to do to start a transport business, such as getting a permit and license and registering with the local, state or national transportation department.

3.    Step 3

Contact an insurance company that specializes in your business’ chosen mode of transportation. Be sure to investigate all companies.

4.    Step 4

This step is probably the most important because the amount of money you spend here will affect your business, the type of vehicle you buy will affect you business as well. When it comes time to purchase vehicles for your business you may want to consider buying used models, which can be a big money saver. If you find a vehicle that has low miles and suits your needs, then have it checked over by a mechanic. If you are buying a larger fleet of vehicles you can often get a discount for buying from a dealer in bulk. Obviously, the vehicle is the key element to any transportation business, so do everything in your power to make sure that you get the right vehicle for the right price.

5.    Step 5

Advertise your business to your target market as soon as you are up and running. y. Contact your local telephone book and find out how much it costs to place an ad in its next edition. Build a website for your business and make business cards that list your URL and pertinent contact details. Tell everyone that you meet about your new venture—word of mouth can be a big help to a new business.

6.    Step 6

Don’t give up. Remember that just like any venture, a transport business takes time and effort to build clientele. Make sure that you have the financial backing to get you through at least one year of rocky times. You don’t want to wind up closing your business in a short amount of time due to limited funds.

Categories: Business

The African Business Person 2

January 17, 2011 2 comments

In my last post I wrote about thinking only of oneself. To be selfish all you have to do is to get up in the morning. Noone has to teach a little child to be selfish, they just cry and cry and cry until they get their own way, or mother wins. So how does this translate to how we run our businesses. If we are only thinking about our gain, can we really excel in business. My belief is no. The best way to succeed in business is to find a need or want that you can provide at a good price. This involves looking at others first and realizing that the customer is king. If we do this in reverse and think first of our needs we will never really succeed. Money is not a good motivator, we cannot look at money as our ultimate goal and expect to succeed. If we do this we will push products at customers that they do not want and do not need. How many people have stuff in their homes that they do not need and do not use but someone convinced them that they needed it. Now when it comes to business, the customer always gets the raw deal. You pay for something, you go home and find that it doesn’t work, a plumber does the job, but tomorrow you have to call him back because the pipe is leaking again, the mechanic replaces your worn brake pads with some less worn out pads from another car. People are quick to take your money, but want to keep the bulk of the money for themselves. Where they have charged you for parts, they use old ones and not new parts as they have promised. Quite often when you find exceptional service, one wonders whether there is a white man involved. I am not being too harsh, but somehow, our black brothers fall short on the delivery side of things. We are always thinking of cutting corners, cutting costs so we can make more, while the customer suffers. Where is the excellence in our businesses? Will we ever get there? I hope so. Econet wireless, has maintained their standards so there is hope for us.

If we want repeat business, we should put the customer first. It may not be the way that we are wired to act, but it is necessary to think first of the customer and then yourself.

So maybe if we get to the root of the problem and think of others and not ourselves, we can conduct business in an ethical way that will yield good results to both the customer and the business owner. Surely if we are selfish and greedy as people we will exhibit the same qualities in our businesses. I know that businesses are there to make profits, but there can be a win-win situation where we make reasonable profits that are not at the expense of the customer and without ripping the customer off. I do not understand some pricing strategies. Some companies would rather just charge you an arm and a leg and get your business just the once, instead of pricing themselves at a place where you purchase more and become a loyal customer.

Categories: General