10 Excellent Tips for Starting a Transport Business on a Budget

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Written By Adeyemi Adetilewa

If you are contemplating starting a transport business, now is the perfect time to start a transport and logistics company. You may think you could never afford to do that – because they cost a ton of capital, right? Well, no – not if you need to stick to a budget.

As with most businesses, transport businesses require some initial capital – but it doesn’t necessarily have to be as much as you think. Transport and logistics are valuable and profitable industries, with a global market value of over nine billion dollars.

Below are some excellent tips to help you start a transport business on a budget:

Pick A Smaller Vehicle

1. Pick A Smaller Vehicle

Regarding company start-up budgets for transport companies, the bigger the vehicle, the higher the price. It makes logical sense when you think about it.

Instead of diving into the deep end with a fleet of expensive and brand-new trucks, start small with a few lorries or vans you can pick up in good condition at an affordable price. You can work your way up to a fleet of mass movers once your business has had a chance to succeed first.

2. Never Make Assumptions

When financing a new business venture, there are several factors that you will need to consider. Your financial position is one of them. Never make assumptions based on your history or the past performance of your other businesses, if you have any.

Assumptions will ruin your life, especially if they are incorrect – which they typically are. Find out the facts before deciding where to open your business, what vehicles to buy, and where to get your business financing.

You will be surprised at some of the things you discover when researching it first.

3. Hire The Perfect Team

Every transport company needs the perfect team to run it. From the management to the drivers and down to the admin employees, if you start a small company – you need to know that even one bad apple can spoil everything.

Hire qualified and experienced drivers – anything else, and you’ll be taking on far too much risk, and that is something small businesses can rarely afford to do. Your business reputation has yet to become established – but the last thing you want is a scandal on your hands just weeks after you open.

It is well worth approaching an established hiring company if you don’t have enough experience in this department. Your new business will have more chance of succeeding if you have the right team of people pushing forward and driving the company’s goals.

Only hire people who want the position, not just someone looking for a paycheck – those people are a dime a dozen and rarely go above and beyond when needed.

4. Close Proximity

Transporting goods over a long distance is a pricey endeavour and fraught with potential complications. Start by offering a local courier or moving service, like dropping off laundry or small-scale house moves. Once you’ve got the hang of costing and planning, you can upgrade your vehicles and routes. 

Personal transport is the cheapest and probably the easiest, but it may not be the most profitable. Decide on a location delivery area wisely and ensure that your costs are fair but that there is enough in it to make enough money.

5. Mitigate Risks

One of the trickiest things about starting a transport business is learning how to mitigate the inherent risks. Driving and transporting goods comes with multiple potential problems, including accidents, breakdowns, and delays – all of which come at a hefty price.

Considering your business will still be in its infancy stage, there will be plenty of time to learn how to mitigate these supply chain risks and keep your business turning a decent profit.


6. Branding

One of the heftiest costs when starting a new business is branding. Raising brand awareness using traditional methods can be both costly and time-consuming. Instead of using outdated methods – turn your attention to social media and email campaigns.

Your first branding priority should be your vehicles, once they have been branded then you can move on to creating a user-friendly website that is informative and intuitive.

7. Used Fleet

One of the biggest reasons to buy a fleet of used vehicles is because it can save your business from travelling down a debt spiral. If you are working within a strict budget, buying a fleet of previously owned vehicles can save you thousands of dollars.

Most reputable third-party sellers will offer you quality assurance on their vehicles. That means those vehicles have been tested to ensure that they are capable of doing what is required of them and are up to standard.

If you decide to purchase a fleet of used cars or trucks, try to find a deal that will offer you warranties or service plans as well – that way you’ll have the maintenance aspect covered while your new transport business tries to find its feet.

8. New Fleet

Buying a new fleet of vehicles for your new transport business is a great idea if you can afford to do so. Don’t panic if you don’t know where to start, just do a quick Google search on your nearest dealership and speak to a salesperson.

Most dealerships will offer a significant discount if you purchase ten or more vehicles, and some of them will even consider discounting less than that number. A new fleet of cars or trucks means that you have a factory warranty to fall back on, as well as peace of mind that the vehicles won’t have a service history that you need to know about.

Do your research on various makes and models before deciding, and dig around the internet for reviews from people who’ve bought the same vehicles. A little bit of information can go a long way, especially if you take the time to understand what requirements you’ll have for your new fleet.

9. Federal Tax ID

One of the most crucial steps in this process is setting up an actual business. Part of that process is securing a license from your state authorities, or approaching your local authority to assist.

The rules around having a transport company vary by location so you’ll need to research to discover what rules will apply to you as the new business owner. You will most certainly require a federal tax ID number and what is known as an EIN. The EIN is an employer identification number, and you need it before you can open your business.

10. Licences and Permits

As discussed briefly above, transport businesses have several risks that need to be considered. One of the reasons for this is because of the dangers that heavy vehicles can cause if they are not operated safely and properly.

That is why local governments and traffic authorities have strict requirements for delivery vehicles including limitations on speed, and restrictions on load weights, and they charge higher licensing and operating fees than regular vehicles. This makes sense when you consider that you’ll be working with cargo, people, and passengers.

How to start a car transport business?

How to start a car transport business?

Here are some points to consider when you want to start a car transport business:

  • Pick a smaller vehicle.
  • Never make assumptions.
  • Hire the perfect team.
  • Close proximity.
  • Branding.
  • Used fleet.
  • New fleet.
  • Federal tax ID.
  • Licences and permits.

All of these points need to be considered carefully when deciding what type of transport company you can afford to start.

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