Many people are thinking about launching their own cargo transportation company. But starting such a business implies certain difficulties. Ezlogz – fleet management software provider, prepared some steps to follow for you. You will need a business plan. It should specify the approximate income and expense amount clearly. Expenses may include accommodation as well if you plan to open a new company in another city. To simplify the task of developing a business plan, you can contact a business consultant for Socal Truck Insurance company.
Then, you should determine your business structure. For motor vehicle segment, it may be as follows:
- personal ownership;
- establishing a partner organization;
- corporations with various responsibility degrees.
Each structure has its peculiarities. They depend on the preferred tax system, which may differ depending on the state, which you plan to operate in. By consulting an accountant, you’ll be able to determine the best structure and resolve all issues related to your financial plan.
Financial and other types of transactions
No business is possible without a startup investment. To launch your cargo transportation company, you’ll need to purchase suitable vehicles. Each of them must be registered, insured, and so on.Â
You need to determine the sources of funds. You can resort to a credit company’s services. The perfect scenario is to have a sufficient amount of money to operate during the first six months. Don’t forget about renting a room that will be used as an office or a warehouse.
Every business operation must be planned thoroughly. You need to ask yourself a number of questions and address them from the first one. They include finding a parking lot for trucks and loading equipment. You’ll also need to find companies to deliver their goods within the country and abroad.
You may need an accountant to handle invoices, bookkeeping and payroll. You will need to know the exact amount of taxes and pay them on time. You can do it yourself, but you’d better use a qualified specialist’s services.
Insurance
One of the key expenses is getting insured. Cargo transportation implies high responsibility to the consignor and consignee, so it’s important to provide the utmost protection of the goods at every stage of their delivery. The parcel mustn’t be damaged when loaded, transported and finally unloaded at the customer’s warehouse. The company ensures full safety so that not a single unit of goods could be stolen. The price of this kind of insurance certificate is somewhat 100 thousand dollars.
You will need to get insurance against an accident for which the company’s driver is to blame. The certificate will cover the damage caused to people and vehicles. The cost of this type of insurance can be as much as a million dollars. The company must cover the costs of other people’s damaged cars as well.
Purchasing vehicles
At the initial stages, many prefer to rent cars or trucks. It depends on the selected cargo type. If you plan to transport small boxes to the nearby cities, a small van will be enough. The companies that want to deliver goods to other countries, will require a large truck with a sleeping place for the driver.
It is also possible to purchase vehicles on lease. This method is suitable for companies that haven’t saved enough money for the down payment or have a bad credit history. In this case, the payment for vehicles is higher, but in a few years you will be able to pay off the loan completely. Think over every detail to become a successful transport company owner and efficiently deliver goods to any corner of the globe.
