The freight transport sector is an important segment of the economy because, without it, it is impossible to imagine the effective functioning of any business. When starting your own business in this area, it is important to consider each step carefully.
Market research
Before registering a company, it is necessary to analyze the transport market. Study the demand for this service in your area and identify the main competitors and their advantages. This will help you understand how to stand out and attract customers.
Implement the following steps:
- Decide what kind of freight you plan to transport. Maybe you’re interested in long-distance shipping, or maybe you’d prefer to do international shipping. Deciding on a direction will help you focus your operations more clearly.
- You will need to register your business to start operating legally. Draw up all the necessary documents and obtain licenses to carry out trucking. Consult specialists to avoid mistakes in registration.
- One of the key points is the availability of reliable transport. Decide whether you will buy trucks or rent them. Choose vehicles that meet your needs and the requirements of your customers.
To be successful in the business you are considering, you will need qualified staff. Select experienced drivers as well as logistics specialists.
How profitable it is
To comprehend how much returns you can expect, you must subtract the transport costs from the estimated revenue. This includes the following items:
- equipment hire;
- inventory management;
- Fuels and lubricants;
- staff salaries;
- overhead and indirect costs;
- meals for carriers;
- communication services and the like.
If the business has already been launched, it is necessary to compare the results of the reporting periods (previous and current). The average payback period is usually between 6 months and three years.
How to formalize
When creating entrepreneurship in the field of cargo transportation, one of the key points is the choice of the form of organization. Tax liabilities, level of responsibility, and other aspects depend on this. The main options are individual entrepreneurship, limited liability company (LLC), and joint-stock company (JSC).
Individual entrepreneurship
Individual entrepreneurship is the simplest form of business organization. It is suitable for small companies and individual entrepreneurs. The main advantages are the ease of registration and minimal costs for setting up and running the business. However, the main disadvantage is that individual entrepreneurship is liable for its obligations with all its property.
Limited Liability Company
A limited liability company is a more complex system than a sole proprietorship. The main advantages are a higher level of trust between partners and clients and the possibility of attracting investments. However, registration and maintenance of this organization require more time and financial expenses.
Joint Stock Company
A joint-stock company is a form in which the capital is divided into shares. Participants of this company are not personally liable for the company’s obligations. The main advantages are the possibility of attracting large investments and the ease of transferring shares. Disadvantages include the complexity of the organization and high administrative costs.