Are you interested in starting a home-based shipping business? If yes, here’s a comprehensive guide to starting a low-budget, inexperienced shipping company .
Okay, so we’ve provided you with a sample company business plan template. We also took it further by analyzing and writing a sample shipping company marketing plan supported by actionable guerilla marketing ideas for shipping companies. In this article, we will consider all the requirements for starting a shipping business. So put on your entrepreneur hat and let’s get going.
Why start a shipping company?
We live in a global society backed by a global economy, and that economy simply couldn’t function if it weren’t for ships and the shipping industry. Shipping is truly the backbone of the global economy – without shipping, intercontinental trade, bulk transportation of raw materials, and import / export of affordable food and manufactured goods simply wouldn’t be possible. Business is done every day. , and there is always a need to bring goods and products to wholesalers and end users.
Therefore, in an attempt to get the products bought from the buyers, there is in fact, it is necessary to transport these products through different means of transport to those who are the eventual buyers. In an attempt to achieve this, shipping, which is one of the oldest and most viable means of transport, comes into play. Therefore, a shipping company is a commercial point of sale that deals with the transport of products and goods to buyers who could be wholesalers / resellers of manufacturers from all over the world.
Due to the increasing demand for shipping services that offer reasonable prices and promise convenience, speed and reliability, no other time could be better than now to jump into the shipping business.The industry is growing and changing rapidly largely due to the increasing demand and dependence on online shopping
How To Start A Transportation Company From Home A Complete Guide
- Overview of the shipping industry
As stated above, the shipping industry is an integral part of the world economy, and it will be very damaging to discuss this very important industry, without listing the facts, figures, and statistics that make the industry work. It is a general fact that everyone accepts that more than 90 percent of world trade is carried out by sea.
- Interesting statistics on the shipping industry
Throughout the past century, the shipping industry has seen a general trend of increasing total volume of trade. Increasing industrialization and liberalization of national economies have fueled free trade and a growing demand for consumer products. In fact, technological advances have not only made shipping an increasingly efficient method of transport, but also apt and fast.
Figures for global maritime trade, which is actually the amount of goods actually loaded on board ships, have risen considerably since the 1970s, reaching 8.2 billion tons of freight loaded in 2008, as with all sectors. industrial, shipping is not immune to economic downturns.
In 2009, the industry witnessed the worst global recession in more than seven decades and the largest decline in the volume of world merchandise trade. Along with the collapse of economic growth and trade, international maritime trade volumes contracted by 4.5 percent and total cargo loaded fell to 7.8 billion tons in 2009. However, trade Maritime recovered in 2010 and grew by an estimated 7% taking the total cargo loaded at 8.400 million tons.
Although developing countries continued to account for the majority of global maritime trade, that is, approximately 60% of all goods loaded and 56% of all goods unloaded, reflecting their increasing resilience to economic setbacks and a role increasingly prominent in the conduct of world trade. However, the share of developed economies in global goods loaded and unloaded was 34% and 43%, respectively. Developing countries are expanding their participation in a variety of different maritime businesses.
The main factor that encourages you to enter this industry is its viability as a profitable company. The lucrative nature of the industry is unparalleled and, in fact, it is one of the few industries in the world that has the highest number of sales in terms of profit and others.
Starting a shipping company Market studies and feasibility studies
- Demographics and psychographics
Demographics and psychographics the composition of those who need the services of shipping companies cannot be quantified, this is so because their utility crosses the public sector, the organized private sector, households, communities and people of different classes and from all walks of life.
Below is a list of people and organizations that need the services of the shipping companies;
- The public sector (public facilities and others)
- Organized Private Sector (Corporate Organizations)
- Small companies
- Businessmen and businesswomen
- College campuses and schools
- Religious professionals
- Sports organizations, etc.
List of niche ideas within the shipping industry that you can specialize in
There is a There are a lot of niches in the shipping company, as we can also find in other industries. Although when it comes to starting a shipping company, the chosen niche may not really be necessary, but there are a couple of niche ideas within the industry that an entrepreneur can choose from. In addition to the existing niches in the shipping industry, a creative entrepreneur can carve out a niche for himself.
Here are some niches / areas that a shipping company can specialize in;
- Direct delivery
- Freight shipping
- Shipping container
- Home delivery, etc.
The level of competition in the shipping industry
It is a general phenomenon that is often difficult to survive in the business world as an incumbent. The shipping company requires more than your experience, knowing how to deliver secure contracts and also having the ability to network with the right set of people who matter; You have been able to network with decision makers who can also decide who will be able to transport a particular set of goods.
There is definitely a great deal of time that investors in this industry have really made a name for themselves; And because of the secrecy of the industry, it makes it more difficult for outsiders to successfully venture into business.
But one thing is for sure, which is that there is space large enough to accommodate both large and small shipping companies. Therefore, it is wise for young children or new entrants to the industry to break even and enter contracts for small businesses before expanding their base.
List of well-known brands in the shipping industry
In any industry in the world, there are usually brands that are popular and have made a name and brand. For them, the shipping industry itself is no exception. Therefore, there are leading brands in the industry in all parts of the world and of course in the United States of America.
These are some of the main shipping companies in the United States of America;
- Aker American Shipping
- American Black Sea Line
- American Steamship Company
- Atlantic Transport Line
- Crenshaw Company
- Farrell lines
- Holland America Line
- International transport service
- Matson Inc.
- Northland Steamship Company
- Transatlantic Lines
- United States lines
- Viking Cruises
- Sealift Incorporated
Starting a shipping company is really herculean and exhausting, it is really a serious business that is not intended for weak-minded people. Therefore, critical economic analysis must be performed to ensure that the risks and other threats associated with starting a business from scratch or investing in a business idea are mitigated.
If you are considering starting a shipping business in the United States, your primary concern should not be limited to acquiring an office facility and outfitting the facility or hiring the best hands in the industry, but you will be more concerned with the strategies you can develop to Make sure your shipping company is sponsored with contracts that will make your mouth water.
On average, establish and run a shipping business in the United States, just like anywhere in the country. The world can be expensive simply because of the logistics and facilities that are involved in the business. Although with the key profile of a good company, which is known for delivering goods properly and on time, along with highly trained, highly skilled and highly experienced staff members on your team, you won’t have to fight hard to win shipping contracts. at the right time.
Is it worth starting a shipping company from scratch or is it better to buy a franchise?
Although there is the possibility, albeit a very small one, of buying a franchise from a successful shipping company or even partnering with a large and successful shipping company if you are considering investing in the shipping industry.
The most important thing to note in this regard is the fact that people are motivated to start a business based on various factors and incentives. If you are looking to build a business that you intend to control, a trademark that you hope will someday transfer ownership to your kids and maybe sell franchises in the future too, then starting from scratch should be the best option.
But if your interest lies in making money and multiplying your wealth, then you can also buy the franchise from a successful shipping company that is willing to sell your franchise.
Possible Threats and Challenges You Will Face When Starting a Shipping Company
Generally in the shipping industry, both established and new companies, most companies are generally subject to political government threats and challenges, global economic recession that generally affects spending, and unforeseen natural disasters (disasters that can cause a reverse).
Another threat that you will likely face when starting your own shipping company is excesses and maximum control that well established companies in the industry have over others, and the inability to get good contracts on time.
Starting a trucking company from home Legal matters
- The best legal entity to use for a trucking company
Without a doubt, starting a shipping company is serious business, largely due to the technicalities involved; Also, which legal entity is chosen will go a long way in determining how large the business can expand. Choosing a legal entity for a business, such as a shipping company, is a bit easy, especially if you decide to grow the business on a large scale.
With regard to choosing a legal entity for your shipping company, you have the option of choosing between a general partnership, a limited partnership, an LLC, a “C” corporation, or an “S” corporation. It is important to clearly establish that these different forms of legal structure for business have their own advantages and disadvantages; that must be properly weighed against someone’s expectations before a final choice.
In fact, some of the factors to consider before choosing a legal entity for your shipping company include, but are not limited to, the following;
- Limitation of personal liability
- Ease of transferability
- Admission of new owners
- Investor expectations and tax issues.
On a closer look at the aforementioned legal entities, it will be noted and agreed that the limited liability company; An LLC is the most suitable, so you can start your shipping company as a limited liability company (LLC) and in the future turn it into a ‘C’ corporation or even an ‘S’ corporation, especially when you have plans to go public.
The essence of upgrading to a ‘C’ or ‘S’ corporation cannot be overstated as it will not only provide you with the opportunity to grow your shipping company to compete with the major players in the industry; You will be able to generate capital from venture capital firms, stock exchanges, you will enjoy a separate tax structure and you will be able to easily transfer ownership of the company.
Convenient Business Name Ideas Suitable for a Shipping Company
The shipping business industry is not an industry with a penchant for names. In fact, the names may not have a meaningful essence to win a business contract. However, there is no particular structure or pattern that must be met in choosing a name for your shipping company.
However, here are some catchy business name ideas that you can choose from for your shipping company;
- Stevenson Shipping Company
- Williams Merchant Marine
- Oceania Transport line
- Western steam lines
- Cosmopolitan Steamship Company
- EP Inc.
- Parallel shipping company
The best insurance needed for a shipping company
In the United States and, of course, most countries in the world, you cannot operate a business without having some of the basic insurance policies required by the industry from which you wish to operate. Also, the nature of the shipping industry requires you to have adequate insurance coverage or else you will be forced to go out of business if something goes wrong with the products you handle.
Therefore, it is not only necessary but also important to create an insurance budget and perhaps consult an insurance broker for guidance in choosing the best insurance policies for your shipping company; They will guide you correctly and take advantage of the risks involved in the business you plan to venture into.
These are some of the basic insurance coverages you should consider purchasing if you want to start your own shipping company in the United States of America;
- General insurance
- Health insurance
- Risk insurance
- Payment protection insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner policy group insurance
Protection of intellectual property and trademark
In this industry, there is no intellectual property that is protected, but you must ensure that you have all the necessary licenses to ensure optimal performance without harassment.
Is professional certification required to start a trucking company?
The shipping industry is highly regulated around the world, largely due to many factors that come into play. Therefore, if you are interested in venturing into the shipping industry, you must obtain the necessary and required certifications; It will give you an edge over your competitors.
The fact is, the more relevant the shipping certifications you and your team have, the more professional you become and the easier it will be to convince people to sponsor your services.Here are some professional certifications that you or your key staff should need. seek to acquire;
- Certified International Trade Professional (CITP)
- Professional Certificate in International Trade, Shipping Logistics (CITLP)
- Certificate in maritime transport
- Certification of logistics professionals
- Certificate in shipping companies
List of legal documents You need to manage a shipping company
In the United States of America and of course around the world, the shipping industry is among industries that are not only regulated but highly regulated as well, largely due to the sheer capacity of the industry. Therefore, to avoid serious infractions including safety, health, etc. in the country. Therefore, if you are considering starting a shipping company, you are expected to meet the legal document requirements stipulated in your country’s constitution.
These are some of the basic legal documents that you are expected to have in place if you want to start a shipping company in the United States of America;
- Certificate of incorporation
- Shipping authorization certificate
- Commercial license
- Commercial plan
- Nondisclosure agreement
- Employment Agreement (Offer Letters)
- Operating agreement
- Company statutes
- Operating Agreement for LLCs
- Insurance policy
Write a business plan for your shipping company
As a person who wants to start a shipping company, therefore, one of the first steps that is expected to be is to consult experts to help you write a good and workable business plan.
A business plan, which is the blueprint that is needed to successfully run a business, the importance of having a good business plan in place to start your jump-start venture cannot be overstated. Thus, with a viable business plan, you can manage your business with a purpose and perhaps with precision; you’ll know what to do at a time and how to handle challenges, growth, and expansion.
So if you want to start your own shipping company, you need to write a detailed business plan that can pass the reality test when you undergo it; you must work with the facts, figures and other indices in the shipping industry, as it applies to the country in which you intend to start business.
Writing a comprehensive business plan is one of the most important steps in starting a successful shipping business. Your business plan will include all the necessary factors such as your business overview, your competitors, your skills and pricing, your target market, your unique selling proposition and core competencies, your pricing, your financial plans, your marketing plans. , your funding sources, threats and opportunities in your country’s shipping industry, and your exit strategy.
A business plan does more than guide you through the processes of successfully launching and operating your business; Present your business idea to third party funders, such as investors and banks.
A detailed cost analysis to start a shipping business
There are several expenses that you will need to incur before successfully launching your own shipping company, it is important to state that the location you choose to start your business will definitely have an impact on the overall cost of starting the business, this is the main reason why It is very important to have completed and analyzed your feasibility studies and market survey before developing a budget and source of funding for your business.
These are some of the basic costs that you should look for to meet when starting a shipping company in the United States of America;
- The Total Fee for incorporating the business in the United States of America $ 750.
- The budget for insurance, permits and licenses $ 5,000
- The amount necessary to rent a suitable office with sufficient space in the United States of America (Rebuilding of the facility included) $ 50,000.
- The cost of office equipment (computers, printers, fax machines, furniture, telephones, filing cabinets, electronic and security devices, etc.) $ 15,000
- The cost of acquiring extraction equipment sh $ 50,000
- The cost of launching an official website $ 700
- Additional expenses (business cards, signage, advertisements and promotions and others) $ 2,500
- Other miscellaneous $ 1,000
Following the report of our research and feasibility studies, we will need around $ 130,000 to set up a small-scale shipping company in the United States of America.On average, you would need more than 220,000 US dollars to start a medium-scale shipping company in the United States of America.
If you choose to start a large-scale shipping company, then you should consider budgeting around US $ 2 million and up. This money includes paying experts in the shipping field to help run the business effectively.
- Financing your shipping company
If you choose to start your shipping company on a small scale, it may not really be necessary to have a lot of resources to start the business, but if you decide to start on a large scale, it is convenient that you need to increase the initial capital required to start the business.
If you are starting your shipping company on a large scale, you will need a decent office facility, office equipment and furniture, and money budgeted for paying salaries and utility bills for at least a 3-month period and you will also need money for buy shipping equipment that will help your business.
When it comes to financing a business, one of the first factors and perhaps the main factors that you should consider is writing a good business plan. If you have a good, workable business plan, you may not have to fight long before convincing your bank, investors, and friends to invest in your business.
Here are some of the options you can explore when looking for startup capital for your shipping company;
- Raising money from personal savings and the sale of stocks and personal property
- Raising money from investors and business partners
- Loan application from your bank / banks
- Presenting your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source of soft loans from your family members and friends.
Choosing a suitable location for your shipping company
Choosing a location for your business is not what you should do without proper consultation. The truth is that if you make a mistake with the location in which you decided to set up your business store, it is more likely that you will have a difficult time moving forward in the business. Choosing the wrong location for the business will definitely negatively affect the business.
Some of the factors to consider before choosing a location for your shipping company include;
- The demographics of the location
- Location accessibility
- The number of shipping companies at the location
- Local laws and regulations in the community / state
- Traffic, parking, etc.
Starting a Shipping Company Personnel Technical Details
If you are about to start a shipping business then you must be ready to buy effective shipping equipment and other state-of-the-art devices, these are some of the basic technical areas that you are expected to spend some of your startup capital on.
When it comes to choosing between renting or leasing an office space, the size of the shipping company you want to build will play a critical role in this, likewise your entire budget for the business should influence your choice. If you have enough capital, your best bet is to rent an office facility.
Financial capacity should be taken into account before choosing the number of employees to be employed in your company. However, there may not be much of a need to employ many people in the company. But, on average, you would need an Executive Director or President (you can fill this position), an Administrator and Human Resources Manager, Security Consultants and Associates (different areas of specializations as applicable to your business), Business Development Executive / Marketing Executive, Customer Service Officer or Front Desk Officer, and Accountant.
For the most part, you will need a minimum of 10 key employees to effectively run a mid-scale shipping company. Keep in mind that there will be times when you are expected to go out of your way to hire experts to help you handle some high-profile shipping contracts, although you may not be able to get started with the necessary experts as a new company.
The service process involved in the shipping industry
The service process involved in the shipping industry depends on the shipping service niches a business is in. On average, the process begins with bidding or submitting a proposal for shipping contracts, once a contract is won, the entire contract document is expected to be signed and advance payment made as required.
Once the resolved payment has been made, then the shipping company will be able to ship the goods and products to their destinations.
Starting a Home Transportation Business The Marketing Plan
- Marketing ideas and strategies for a shipping company
In this business, you don’t necessarily sell products, so you must make extensive use of opportunities as you roll out.
So, when you are drafting your marketing ideas and strategies for your shipping company, be sure to create a compelling personal and company profile that should include the profile of your board of directors and management team. The truth is, if you have highly qualified, trusted, and successful shipping professionals on your board of directors and central management team, it will definitely give you an edge over others on the market.
These are some of the platforms that you can use to market your shipping company;
- Advertise your business in relevant business magazines, TV and radio stations and also be available for talk shows and interactive sessions on TV and radio) related to shipping
- List your business in local directories / yellow pages (both online and offline)
- Take advantage of the Internet to promote your business
- Join the local chambers of commerce around you with the primary goal of networking and marketing your shipping company.
- Present your business by sending cover letters along with your brochure to all corporate organizations, community leaders, schools, hospitals, hotels and government offices in your target area.
- Speed in bidding for contracts
- Create different packages for different categories of clients to work with their budgets.
- Participate in direct marketing, referral marketing and others or email marketing.
Possible Competitive Strategies to Beat Your Competitors in the Shipping Industry
It can be challenging to compete as a newbie in the shipping industry especially in a highly organized market like the United States of America, so you must be deliberate in choosing your board of directors and central management team.
As a shipping company, if you can deliver the goods on time, and properly, then it won’t be difficult for you to become known in the industry. You must ensure that creativity, excellence and attention to detail in regulating painstaking shipments is your watchword.
Lastly, make sure your organization is well positioned and, if possible, form a strategic partnership with other key stakeholders in the shipping industry; It will surely give you a competitive advantage over your competitions.
Possible Ways to Increase Customer Retention for Your Shipping Company
One of the best and the easiest way to increase customer retention and perhaps attract new customers is to always satisfy your customers. If your customers are satisfied with the provision of your services, they can hardly find alternative service providers or products.
Statistically, it has been reported that one of the main reasons the customer source for an alternative service provider or product is when there is a drop in quality. Another reason is poor customer service. If you can continue to improve the quality of your services and the delivery of your customer service, you will have no trouble keeping your customers loyal.
Strategies to increase your brand awareness and create a corporate identity for your shipping company
When it comes to creating brand identity for a shipping business, the caliber of the clients you’ve worked for and the nature of the shipping contracts you’ve handled is always a major brand driver.
In fact, you need to make sure that your brand is visible and well communicated. That is why you must make provisions to work with different classes of people in society. All of your advertising materials and jingles must be made by some of the best hands in the industry.
Below are the platforms you should take advantage of to increase your brand awareness and create a corporate identity for your shipping company;
- Present your business by sending cover letters along with your brochure to all corporate organizations, community leaders, schools, hospitals, hotels, and government offices in your target area.
- Advertise your business in relevant magazines and websites
- List your business in local directories / yellow pages (both online and offline)
- Promote your business on satellite television stations and radio stations.
- Get involved in direct email marketing
- Take advantage of the internet (social media platforms and your official websites) to promote your business
- Make sure your workers wear your brand t-shirts at all times during work hours and also make sure to mark all official company vans, trucks and cars, etc.
Creating a supplier / distribution network for your shipping company
The nature of the shipping industry makes it easy for shipping companies to engage with each other and also engage with the government’s own shipping agencies. This is because the shipping problem cannot be handled in isolation. This is even more, because it is always necessary to get updates of the customized services from the governments of various countries to ensure that everything runs smoothly.
Since there will always be a strategic alliance between shipping companies, it is therefore desirable that they connect with each other.
Tips for Successfully Running a Shipping Company
Regardless of the type of business you run, your ability to bring all of your team members together on the same page at all times is one of the keys you need to successfully run the organization in the first place.
As the CEO or head of a shipping company, it is your job to ensure that you direct the business. Therefore, you must ensure that you create time for office meetings; These meetings should be an avenue for challenges, comments, projections, and relevant issues to be discussed. These meetings can be daily, once a week, twice a week, or once a month. In fact, there must be consistent meetings in your organization.
Training your employees and conducting evaluations on a regular basis will help you manage your organization effectively. You should also encourage your employees to seek certifications in their various areas of expertise; it will help your organization’s profile and of course it will help people. You can choose to sponsor some of the certifications in whole or in part.
Lastly, you should keep your doors open to suggestions from your team members and your customers. It is very important to reward excellent performance in your organization; You will go a long way toward fostering healthy competition in your organization.