Owning a profitable warehouse business is a dream come true for a number of aspiring entrepreneurs.
However, before beginning such a venture, you want to make sure that you’ve got down all the basic information about what it takes to run such a business and what are some of the pitfalls to avoid when you are just starting out.
Here is a list of guidelines to follow when starting a warehouse business.
1. Do some research on the competition
Before starting any type of business, it is common practice to examine the competition. Take a look around your area and see how many competitors you’ve got.
Find out as much as you can about their operating system as well as their practices and determine what seems to work and what doesn’t.
If they’ve been around for quite some time, it implies that they are doing it right, so see what are some of the lessons you can learn from them and then apply in your business.
Take some time to find out how the competitors have established themselves as businesses, and see which one of their strategies you can use to do the same.
That you shouldn’t copy anyone goes without saying. On the contrary, you need to create something new and unique to be able to stand out from those existing businesses.
2. Work out your start-up costs
Prior to entering the warehousing industry, you want to obtain some general information on the estimated costs of such ventures so you know what you are getting yourself into.
Generally speaking, it costs anywhere from $10,000 to $50,000 to start a warehouse business.
Building rental, inventory control systems, equipment, as well as warehouse racking and shelving are just some of the expenses you will need to tick off your checklist.
These costs will largely affect your budget which needs to be distributed efficiently in order to prevent running out of funds too quickly.
Do some research on how you can save money in the process and consider all the different ways you can cut your costs.
Getting loans and looking for investors are good alternatives if you are not working with start-up capital that is big enough, in which case you’ll need to come up with a full business plan.
3. Choose the right size of the building
This is important because you don’t want to wind up paying for the extra space you won’t be using.
The size of the building will also affect your monthly expenses such as heating, so be sure to take everything into account before selecting warehouse space.
You should also consider what your niche will be as this will give you a general idea of what kind of items you’ll be storing.
It could be something that is not easy to find in your experience or something that is in demand in your area.
Also, think about combining your office space with the warehouse in order to create a home base for your company and help it operate more efficiently.
Designing an outdoor work area for your office is another suggestion that can help you create a stimulating work environment while embracing sustainability.
4. Select optimal warehouse lighting
After selecting a warehouse space, you’ll need to come up with a warehouse lighting plan. When lighting your warehouse, remember to include both overhead and task lighting.
Color temperature, type of light source, energy efficiency, light distribution type, positioning of the fixtures, and glare reduction are some key factors to consider when designing practical warehouse spaces.
Keep in mind that modern industrial lighting requires state of the art solutions that are in accordance with the specific needs of your warehouse space.
Generally speaking, you should aim to adjust the lighting to the warehouse layout. Take some time to figure out the best arrangement for your warehouse.
A good lighting system will ensure adequate working conditions, optimal illumination, and visual comfort, all of which are paramount to creating a safe and productive working environment.
5. Hire employees
Once you’ve tackled all the basics, created a business plan, and determined how you plan to fund your business, you’ll need to hire individuals who will help take some weight off your shoulders and help you grow your business.
Of course, you will need to first determine the qualities and skills those employees will need to possess in order to qualify for the position.
You will also need to familiarize yourself with all the responsibilities you have as an employer. As a rule of thumb, your employees should either make you money or save you money and time.
Avoid turning down skilled individuals just because they lack experience.
That being said, be careful about the first employees you hire and make sure not to go overboard as you can end up paying workers that you don’t need.
6. Find your clients and build your client base
The final step in the process involves building your client base. Establishing a relationship with your clients is imperative, and fortunately, there are a number of ways to do it.
Networking is a great way to meet new clients, so be sure to attend as many industry events, conferences, and trade shows as you can.
Also, consider advertising using different means (e.g. paper, TV), and definitely create a website.
Joining the International Warehouse Logistics Association is another great way to generate leads for your business, while a strong online presence will ensure you connect with your clients and help you promote your business more efficiently.
You could also look for small businesses in your area that work with products you’re stocking and offer them your services, highlighting all the benefits that come with your partnership.
From managing the start-up costs and building a client base to optimizing your workspace and finding ways to differentiate yourself from the competition, warehouse business ownership comes with its own set of challenges.
However, if you are able to overcome those obstacles, you are sure to get your business off the ground and start off on the right foot.
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My name is Derek Lotts, I am a writer, researcher, and a regular contributor at several lifestyles, business, and home improvement blogs.