Globalization has changed the path of e-commerce and paved the way for many new industries. It has also made many previously operating businesses more profitable and efficient.
The shipping industry is one such example. It is one of the fastest-growing businesses presently and is capable of generating revenues worth billions of dollars. With many businesses shifting online and catering to a global audience, this industry is more important than ever before.
It is expected to grow at a rate greater than 5 percent, and this rate will continue to rise. Transportation of goods across land, sea, and air is the pinnacle of modern society.
Unless a company has a fleet of vehicles or ships at its disposal, it will have to outsource shipping services to third parties or businesses. Both large and small businesses outsource the services. It is where you come in. As an aspiring shipping businessman, here are a few factors that you should keep in mind before starting the business.
1. A Solid Business Plan Is The Foundation
Writing a business plan is a crucial step in setting the foundations of a business. It helps you be more systemized and have a better hold on how you want to approach different facets of the business. You can allocate resources in a better way to work towards the goals and objectives of the business.
It helps you devise strategies and plans for the business. Try incorporating facts and figures in your business plan or observe how leading businesses like gokoho.com are working. It will help you see how to explain your selling proposition, skills, financial figures and plans, target market, and core competencies.
Investors see these things in a business plan and base their decision on them. A good business plan will help you convince an investor to invest in your business, and it will also help you get the necessary loans from banks.
2. Costs And Expenses
Financial resources are extremely important for a new business. They help a business lay its foundation and helps it grow and expand. Approximately 50 percent of start-ups fail in the United States due to problems surrounding a lack of financial resources.
Hence, it is extremely important that you make a thorough list of all the start-up costs and operating expenses that you will encounter. Jot down ways to cater to them as well.
Your start-up costs will include office infrastructure, stable internet connection, phones, laptops or computers, a fleet of vehicles, a storage facility as you are into the shipping business, and an extremely expensive supply chain software. This software will help you optimize deliveries and have better order visibility to cater to all customer queries.
Other start-up expenses include registration fees, insurance, permits and licenses, office and shipping supplies, and equipment.
Operating expenses can be managed much more easily if the cash inflows are good for the business. However, keep in mind that inflows will be tough in the first couple of months, so stay patient and look for ways to cut down extra costs.
Looking at all the expenses listed above, you can see that it isn’t cheap to start a shipping business. Think diligently before you dive in.
3. Employees And Office Staff
The shipping business is very technical, and hence you will have to hire technical people to help you run it. Running a one-person show will be difficult, so it is better that you go for recruiting.
These people will include a captain for the cargo ship, drivers for the delivery vans, technicians for maintenance, customer service people, an order manager, an inventory manager, an accountant, etc. If you plan on going for rigorous advertising and sales, you will have to hire a team of marketing and salespeople.
Recruiting the right people will be difficult and might take time. Hence, stay persistent and comb through candidates thoroughly to find the right fit.
4. Legal Aspect Of The Business
The most important aspect of any shipping business is the legal side. Often a business and a shipping company lie in different jurisdictions and have prevalent laws to abide by.
Therefore, signing a contract on mutually agreed-upon terms is extremely important. For this, you need to hire a legal consultant or lawyer who can help you draft proper contracts. You need to look into the details and see that essential terms like revocation, insurance, and loss bearing are clearly stated.
5. Prepare Yourself For The Competition
Other than securing finance, hiring employees, getting the necessary equipment, and looking into the legal side of things, you must have a clear mind and nerve of the steel to face the competition in the market.
Shipping is a huge industry, and many companies have already made a good reputation; challenging them and getting your fair share from them will be quite a task; if you are up for the competition and will not run away after getting a few setbacks, then you are all ready to get into the shipping business.
6. Unique Selling Point
Remember to offer consumers and clients a unique thing to attract them to your services. You can likely get ahead if you have a unique selling point over your competitors. However, if you offer the same services as other shipping companies, it might be difficult for you to survive this tough industry.
Remember, it is always important that you do your research before diving into any type of business. The more thoroughly you research, the better informed you will be about the challenges you might face. Similarly, before starting a shipping business, invest time and money in market research. See how you can make this business a success and what factors you need to focus on. Try to introduce a unique thing in your business to attract customers and clients.
Hopefully, you enjoyed the article, and the points mentioned above help you develop a better understanding of the shipping business.