8 Steps to building a successful Transport Business

. 5 min read
8 Steps to building a successful Transport Business

When we think of transport, we probably think about taxis and trucks. However, the transport business is quite vast and offers multiple options. Any company that enables transportation of goods, services, or people would come under the transport business. Renting a vehicle, shipping of items, connecting products with the actual business site: all of these come under the umbrella of transport. Depending on your location and interest, you have endless possibilities to work with. You can start a business to cater to personal needs, work within a given region, or even expand on a global scale. Since the scope is so broad, it would also allow you to specialise in a particular type and rise to success.

The logistics market in India has been booming over the years; it employs over 50 million people. As per a report of the Government of India, the transport business is expected to grow at a rate of 5.9 per cent through 2021. Hence, an investment in the transport industry is definitely not risky in terms of potential. However, there is significant competition, and there are barriers to entry. A good plan, healthy finances, and a solid recruitment strategy are indispensable to sustain a successful business. Here, we break down this seemingly strenuous task into eight simple steps.

1. Research, Research, Research

A foundation for a healthy business is always research. Before venturing into any entrepreneurial activity, you must invest time understanding the market and the operational requirements. It would be better if you also made yourself aware of the legal procedures to ensure no complications in the future. Ensure that the research you do is relevant to the region you want to establish your business in.

2. Decide on the stream you want to work in

Transportation is a vast sector, and there are multiple options available for investment. Make an informed choice based on your location, skillset, and the capital you can invest for the same. If you feel overwhelmed with the options, the best solution would be to research the existing transport services' demand and supply patterns.

3. Choose your business model

The third step is to make a business structure, which will determine your stakes in your firm. You could opt for a sole proprietorship, where you would retain complete autonomy, but losses would impact you personally. The second choice would be a general liability partnership, where you would enter into the business with partners after deciding individual roles and stakes in the industry. You could also choose to have an LLC model (limited liability company), which would protect you from your company's losses.

4. Create a business plan

Before creating your budget plan, find a unique name for your business. Next, you will have to draw up a budget plan. The first step is to identify your source capital to get the company starting. You could look out for investors, obtain a loan from a bank, or choose to bootstrap. You will also have to note all the logistics related expenses- license and toll costs, fuel, staff salaries, driver skill development costs, etc. Even though you are in the planning stage, it is essential to plan while considering operational costs and maintenance expenses. Include a budget for the storage of your vehicles and the security costs associated with it. Get a business checking account and card to separate all the business expenses from your personal expenditure.

Global business of Container Cargo freight train for logistic import-export

5. Apply for licenses and permit

The transportation business often requires more permits than other businesses because it involves work with people and precious cargo. This additional responsibility translates into more procedures and regulations. These regulations depend upon the type of business you want to start, specific to the location, and type of cargo you would be transporting. Hire a lawyer to fulfil all these requirements to ensure that you are not disturbed by any legal hassle.

6. Make the purchases

The vehicles you purchase will determine the speed and efficiency of your service. Experts in the transport industry state - "Seeing someone driving a small van to deliver a huge load will make your company look unprofessional, similar to large trucks for carrying minimal cargo." .Consider the following criteria while identifying vehicles for your business:

  • What will your vehicles carry?
  • What is the volume you are looking to carry?
  • Where will your vehicles be used? (terrain)

However, do keep in mind the capital available for your business. Understanding the type of vehicles you will need will help you draw up a specific budget when you source for money. It is crucial to make this decision carefully as it will significantly influence your repayment plan.

7. Get an office and employees

While vehicles are the critical components of your transport business, the employees are equally important. You need to ensure that the people you hire are the right fit for your business. Ensure that you recruit qualified and experienced drivers right in the beginning to avoid any problems later. The quality of your drivers and their attitude will be crucial to building a good clientele.

8. Create a solid clientele

According to Business South Africa- " Technology centred around cargo has advanced dramatically over the years, and as have the expectations of customers. Most large companies allow clients to book and track all of their parcels or deliveries online". Invest in an attractive yet easy to use website that provides accurate tracking and information. In addition to being technologically savvy, do not compromise on quality. As in any line of business, reputation is built through consistently good service. Despite the logistical issues involved, a transparent and reliable service will ensure loyalty.

Transport silhouette icon vector set


The steps mentioned above are definitely not exhaustive, but in the world of business, nothing is available on a platter. If you intend to extend your services, you would need to build strong connections for referrals. Also, remember to ensure every purchase you make. Irrespective of the plethora of precautions you could take, accidents do happen. Hence, do not avoid the initial costs of insurance, as it can save you from huge losses later.

The agenda 2030 of the United Nations includes transportation and logistics as an aspect of development in its sustainable development goals. Transportation is said to be the backbone of the economy, and one can witness the changes within the industry to adapt to changes in technology. With advancements in physical internet, artificial intelligence, machine learning, and warehouse management systems, the transport business is looking for creative and invested players to enter the market. According to Statista, every business is going to spend over $40 billion on IoT platforms, systems, and services by 2020. The options could be overwhelming, and the planning will be quite exhausting, but the transport industry will give you great returns in future if you are smart and passionate about it.

Also read:

1) How does the transportation industry work?
2) How to Start a Private Bus Transportation Business in India?
3) Regional Transport Organisation and the Types of Vehicles Covered Under It
4) What are the top-10 most profitable businesses in India?