Now may seem like a good time to set up a logistics company, but to ensure business success, it is important to consider several critical factors before getting started.
Step 1: Develop a Comprehensive Business Plan
Creating a business plan will challenge you to evaluate every aspect of your planned logistics company. It’s an opportunity to conduct thorough market research, a process that will unearth your industry knowledge gaps, identify key competitors, and help you to decide your main service offerings.
You must also address how your logistics company will be financed. Your business plan will be used to pitch to banks and investors so it’s important to include a breakdown of initial costs and a projection for your future expenditures. Self-financing is a possibility, but the company’s growth will likely be slow, and without some reserves in the bank, your company might struggle to manage cash flow.
Step 2: Get Your Finances in Order
The costs of running a logistics company extend much further than your initial investment in a fleet of vehicles.
First, calculate how much upfront investment your business needs and decide how this will be funded. Will the capital come from savings, a bank loan, or a private investor? Will you start by offering select services (with plans to extend in the future) or focus on one or two core competencies? For example, a freight broker requires much less initial investment compared to an end-to-end 3PL company.
