If you are like most kids you either ran or dreamed about running a lemonade stand. This is a small business. While kids often have ambitious dreams and ideas about entrepreneurship, they tend to abandon them as adults. But this does not have to be the case since it’s not that hard to found a small company. This is especially true if it’s a startup in the logistics industry. This article will teach you how to start a logistic company
What to do to start a logistics company
If you have ever wanted to know what is a logistics company ? How to start a logistics company follow these steps:
- Make sure you have enough capital to start the venture
- Apply for and make sure you are approved for certain licenses
- Hire a CPA and be sure to obtain a tax identification number (TIN)
- Know who your competitors are (even the minor ones) and thoroughly familiarize yourself with their exact operations.
- Hire a business plan professional
- Pick a strategic physical location
- Make sure you have enough insurance
- Hire the right people
Make sure you have enough capital to start the venture
There is an old and unspoken adage that entrepreneurs are all too familiar with, “You have to spend money if you want to make it!” This is very true for logistics startups. Of course, you can always approach a bank for a small business loan. However, most entrepreneurs choose to knock on the doors of venture capitalist investors. These professionals look for companies that are well organized. They also require business owners to prove that their businesses will be profitable within a reasonable time period. You’ll need to draft a solid business plan and already have sales and a growing customer base if you want to obtain VC funding.
Apply for and make sure you are approved for certain licenses
If you want to start logistics company, you will need to be licensed. Logistics is a very complex field and an official license acts as a seal of approval that your business is legitimate and competent in the eyes of customers. Since no state has the same laws, it follows that licensing requirements will differ by state. For example, some states only require you to have a business license. Others require that along with many other licenses. To be on the safe side, consult with a lawyer to help you navigate the sometimes cumbersome licensing process.
HIre a CPA and be sure you obtain a Tax Identification Number (TIN)
You’ll be filing a corporate tax return and paying corporate income taxes if you have a logistics business. Since you’ll be on the official tax register of the state in which you are operating, you’ll need to have a Tax Identification Number (TIN). Your logistics company will be recognized as an official corporate entity only if you have this number. Also, remember that because you are selling products, you’ll have to pay sales tax.
It’s a good idea to hire a Certified Public Accountant (CPA) because corporate income taxes tend to be complex and involved/detailed. Since you can get audited (if you are lucky) if you don’t file your corporate income taxes, having a CPA review your books will benefit you because you’ll have a trained expert reviewing your tax records and books. This professional will also identify any discrepancies or errors, inform you of them, and correct them immediately. Remember that failure to file your income taxes correctly can also have you jailed and/or your logistics operation shut down.
Know who your competitors are (even the minor ones) and familiarize yourself with their exact products
You’ll be to accurately anticipate and predict what your competitors will do next in terms of product development, introduction, selling, and promotion. This will be advantageous for you in terms of staying ‘one step ahead’ of those who want to copy cat your products and ideas, you can create unique products that would be difficult to copy. In this sense, you would be improving your chances of staying in business longer by creating a sustainable competitive advantage.
Hire a business plan professional
You’ll need to spend money when starting up your logistics company if you want to make it. If you want to approach venture capitalists, they will require a coherent business plan that is well thought out and will accurately predict your future success. You’ll need a business plan even if you want to take out a small business loan from your local bank. Since these individuals and institutions tend to be very picky and reject business plans that are not professional, well-thought-out, or an accurate predictor of the future, you need to hire a professional who is an expert at drafting quality business plans.
Pick a strategic physical location
“Location is everything in business.’ Because people will do business with you only if they know that your company exists, you want to choose a strategic geographic location for your business that will make it well known and visible to those in your target markets.
Make sure you have enough insurance
While it may seem strange and completely irrelevant to carry commercial insurance, liability insurance, bond insurance, and workers compensation insurance (among other policies) it is really not. Bond insurance will protect you against customer malpractice and product defect lawsuits. You’ll need workers’ compensation insurance if any of your employees sustain serious injuries while working. When it comes to business insurance for logistics companies, ‘more is better!’
Hire the right people
A business is only as strong as its weakest link. In this instance, the weakest link refers to your employees. The employees will run the daily operations of your logistics company. Hence, it’s largely their actions and decisions that will determine the destiny and future success/failure of your company. Hiring talented, hard-working, educated, and experienced people will virtually guarantee that your logistics company will eventually become a successful industry leader!