How to start a transport business

If you’re thinking about opening a transport business, below are the key steps to follow to get your plans off the ground. 

Step 1. Identify your niche 

First of all, you need to decide what sort of service you want to offer. You can, of course, operate in a number of areas, but it’s generally better to establish a particular niche at the start to help you stand out from your competitors and perhaps attract more specialist clients. 

Some examples to think about include waste disposal, parcel delivery, and vehicle transport, but there’s a whole range of alternative options. Make sure you carry out some research on your chosen niche to check there is enough demand before you go any further. 

Step 2: Decide on the size and type of fleet you want to build

Now you need to work out how many vehicles you want and how fast you want to expand. It’s generally better to start small and have a fleet of, say, two to five vehicles as this can help keep your overheads down. You can then decide as and when you want to add to your fleet, depending on how well your business is performing. 

Another consideration is whether you want petrol or diesel vehicles, or maybe even electric. You’ll also need to decide on the size of the vehicles, which will depend on what type of services you’re offering. 

Step 3: Choose a location

The location of your business also needs to be considered carefully. To help you make your decision, you’ll need to think about whether you can easily access major road routes and what rental prices are like. Warehouses tend to be cheaper to rent compared to standard commercial properties, but prices will vary depending on the region you’re based in. Keeping your rental costs down will help reduce your overheads and potentially increase your profit.

Step 4: Work out your costs

Your next step is to think about all the regular costs your business will face. These include the purchase or leasing of vehicles, vehicle maintenance, fuel and insurance, plus staff wages, your rent and advertising and marketing fees. Knowing exactly how much to budget for these items will ensure you don’t end up spending more than you can afford.

Step 5: Be aware of your legal obligations

You’ll need to take out fleet insurance to cover your vehicles, as well as goods in transit insurance to cover the items you transport. It’s worth having breakdown cover too. 

On top of this, you’ll need to factor in other business insurance costs such as public liability insurance, employer’s liability insurance and professional indemnity insurance. 

Public liability insurance protects you against costs resulting from third party injury or damage to property, while professional indemnity insurance means you’re covered if a client loses money as a result of negligence in the services you’ve provided.

Employer’s liability insurance is likely to be a legal requirement if you employ staff. It pays out if an employee becomes ill or injured as a result of the work they do for you. 

Step 6: Sign up to a freight exchange

It can also be worth signing up to a freight exchange. This can make it easier to run your company and allow you to check the status of your freight operations. It can also help you find trustworthy and compliant drivers for your business and will provide a host of tips to help you build a successful business.