How to Start a Transportation Service
The transport sector is one of the most diverse, and there are many options when it comes to starting a transport business. Humans, animals, and goods are always moving from one place to another which is why transportation services will always be in business. You too can start a transportation service with some detailed steps you will discover in this post along with vital information about the industry.
What transportation service is expected to provide
Transportation services have a responsibility toward their customers to ensure that they get value for their money. A transport company will be held accountable for the following:
Affordable travel fares
Transportation services do a lot to keep their customers satisfied and these services cost money, but it’s no excuse to charge exorbitant fares. As much as every passenger wants a comfortable and safe trip for them and their belongings, they also want the trip to be affordable. It is your duty as the transportation service to make sure that your customers get a quality travel experience without burning a hole in their pockets.
Some factors determine how much a travel company charges its customers; the quality of the vehicles, the quality of additional services, the cost of running the business, tax, and other dues to the government or transport unions. Nonetheless, the amount they charge is still what they can control, as there is no general rule that states that all transport companies must charge the same amount. Since you make the price list, you must do all you can to make sure your rates are competitive.
A comfortable and safe travel experience
Another vital aspect of your duty to your customers is assuring them that your transportation service will take them safely to their destination. Your passengers deserve to enjoy the trip and be comfortable throughout the journey. The cushion should be comfortable and the bus should be spacious. Some of the responsibilities a transport company has towards their customer are things they can control, while others are not totally under their control. Even though no one can completely guarantee a safe trip, they can put measures in place to ensure that the chances of reaching their destination are very high.
The safety of a trip depends on the condition of the means of transport, the route, and the driver/pilot. To mitigate the likelihood of not getting to ones’ destination, the vehicle must be in perfect working condition. Each vehicle under the transportation service must be serviced before and after a trip to ensure that it is in good shape. If something goes wrong during the course of the trip, and it’s due to a faulty vehicle, your company will face huge legal action.
The route to your destination will also determine how safe the trip will be. However, the condition of the route is out of your jurisdiction. You still have a role to play by ensuring that you get information concerning the condition of the route before and during the trip so that you can take alternative routes if something goes wrong.
Even though it’s not your duty to see to the safety of public routes, if due to negligence you didn’t pay attention to the information going on, and you suffer an accident, a robbery, or plane hijack, your company will be held accountable.
Your staff, especially the driver or pilot, must be checked before and after every trip to make sure they are in a healthy condition. Some have bad habits, like driving under the influence, which is no condition to move passengers or goods. Other people have health conditions like poor eyesight, or some might get sick just before a trip; it is your duty to make sure they don’t work. The consequences of negligence in this area can be catastrophic for your company.
The Security of passengers and goods
A transportation service that cannot guarantee the safety of its clients is going to crumble. This is the most important responsibility a transport company has towards its customers in that they have the power to make it happen. The moment a passenger walks into the premises of your transport company, they become your responsibility. There must be proper security protocols in place so that they don’t get robbed within the premises, or have their valuables stolen. If passengers feel unsafe in your place of business, it would hurt your company’s reputation.
Their belongings are supposed to be kept safely so that they arrive with their owners to their preferred destination. The belongings must be labeled, if necessary, and kept safely if they won’t be in the same vehicle with the passenger. And if there will be a compartment for storing luggage or any other belongings, they should be durable.
It’s similar to transporting goods through cargo ships or planes; some goods are fragile, while others are not. Before you transport goods, be sure of its content. Some goods are dangerous to carry about, some might be expired and could become highly inflammable, and some are banned substances. Be sure of the goods so that you can handle them properly and save your company from getting into trouble with law enforcement agencies.
How to start a transportation service
Starting a transportation service has many benefits but there are crucial steps to take before making the big move to open your company.
Choose your preferred transportation service
There are a plethora of sectors in the transportation service which anyone can venture in depending on their preferences and how well they understand that sector. Some of them include:
- Commercial airline transport service: it’s a very expensive transport business to start. The licensing, staffing, and purchase of equipment will cost a fortune. It is also one of the most lucrative transport businesses. It is widely considered the fastest and safest means of transportation.
- Boat rentals: Luxury boats are expensive; owners of ferries and luxury boats or yachts rent out their property to those who can afford it. It is safe and generates a good income for the owner.
- Bike rentals: it is one of the least expensive transportation businesses to start. Maintenance costs little, and it is also a safe means of transport. Regions like China, Sweden, and The Netherlands are known for being bike-friendly.
- Car/bus/van rentals: luxury cars like limousines are used for special occasions and their owners rent them out for a good price. Also, people who go on road trips rent vans to suit their traveling needs.
- Private Airplane/Helicopter rentals: the cost of maintaining a private jet is the reason why even rich people prefer to rent jets and helicopters for their travels. It is a profitable transport business to start but it is also one of the expensive ones.
- Taxi service: taxis take care of those who move short distances within a location. It is one of the inexpensive businesses to start in the transport industry.
- Medical equipment transportation: more advanced ways of transporting medical aid from place to place has made this sector even more lucrative. It takes trained persons to transport medical equipment seeing they must be in certain conditions to be safe to use. These days, drones are the most effective means to transport medical equipment to remote areas.
- Cargo services: goods also need to be transported from one location to the next and people pay top dollar for this service.
Make a concrete transportation service plan
Every aspiring business owner must have a plan to back up the business idea. The transportation service sector has its benefits -including challenges that every stakeholder must scale through- but if not properly planned for can slip one by. Your business plan is a document that contains all the areas that concern your company; what it will need to stand, where will be perfect for it, who will be the target customer, and more.
No detail should be left out of the business plan, as that can come back to haunt you. This business plan will serve as a guide to run your successful transport company. A successful transport company will follow its business plan to the letter, and if there is a need to make adjustments, it must be thought through.
You must plan for specific details of the travel business, like the travel routes for instance. When you start your transport company, you will not immediately have all the necessary resources to travel every route, so you’ll have to choose specific routes. You and your team must plan the route you will take, and make sure you know all there is to about it. The routes you should pick are the ones you are familiar with so that you can easily find an alternative route in case of an emergency. There will be tariffs and other regulations pertaining to the region you operate in, so the earlier you familiarize yourself with a particular route, the better.
In addition, you will plan for the types of services you will offer your customers. A transportation service company can offer different kinds of services depending on how much resources they have. For some, they only care about carrying passengers en mas to a particular destination within a state, while some choose to travel interstate or internationally.
Plan your pricing along with other important aspects of your business. Although every transport company charges differently, you should first take a look at the pricing standard in the industry before coming to a conclusion. The reason is that you might either be undercharging or overcharging customers if you don’t know what others are charging. Use the industry standard as a guide and create your own price list to match the quality of your services.
Once you plan your business, have it registered. The registration process in some regions is not tedious and it costs little. All you need is to provide crucial details of your transportation service and meet the authorized personnel to register it. A transport company must go through different protocols to get a license to operate. The government agencies that issue permits to transport companies have their own requirements before they deem a transport company fit to be licensed.
These processes might take time and cost you money but the sooner you start them, the better. In some regions, the recognized association of transport operators will also need to grant a transport company a license to operate in the region- albeit with the state government’s backing.
After getting your permit, make sure to legally protect your transport company. Also, a lot could go wrong as you operate your business, and some of the problems might not be your fault. Luggage could get lost, or a customer could get details of their trip wrong and they could threaten to sue. With a good legal practitioner, you would be able to hold your own in such cases.
Get funding
The most lucrative transport services cost the most to start. You could decide to start your business based on how much you have in the kitty but it is advisable to stick to one’s initial plan. The moment you’re done with your feasibility studies and you find out that you cannot start the transport business with your budget, source funds elsewhere. You could choose to get a loan or meet venture capitalists who have a track record of investing in the transport business for funding.
With a well-prepared business plan and good presentation skills, you will be able to secure a loan from willing investors. There will be terms of the agreement that you must carefully think through before signing.
Join an association
Transport companies have associations that handle the affairs of the transport sector, and they take it seriously. In most cases, these transport associations have backing from the government. There are benefits to joining a transport operators’ association in the region you are operating, and there are consequences to not joining one as well.
Information dissemination is vital to the success of a transportation service company; many factors affect this industry. These associations are one of the first places you’ll get inside information on the latest development which could affect the industry. A sudden change in government policies, hike in gas prices, and other forms of insecurity in certain areas are among the information that will be disclosed in these associations’ meetings.
While it is not a crime to refuse to join an association, these associations can make life difficult for non-members who refuse to join. They could get them blacklisted and deny them any assistance in the industry, as well as encouraging member transport companies to do the same. There will be fees and contributions to make when you join an association, while there will also be fines for breaching association regulations. And even though joining an association might stiffen your vision for your transport service business, the benefits outweigh the demerits.
Experience is essential in the transportation service industry. From the driver to the mechanic, they all must have played a similar role elsewhere. Your new recruits must be tested to see the level of skill they possess. Drivers and pilots, for example, must have a valid license with no criminal record to work for you. Your crew members must be well-mannered since they will be with the passengers throughout the trip.
The people you hire represent your company, and even if the customers know that, they easily take out their frustrations on the company. Besides the experience your manpower must have to ensure they do their jobs expertly, you must train them on how to be good ambassadors of your company. Someone who’s having a bad day can take it out on a customer, and that could lead to you losing a valuable client.
Be present online
Almost everyone does their business online these days. The use of online platforms is essential to the success of any business. In the transport sector, there should be a way for customers to get vital information from transport companies, and transport companies also need to get feedback from their passengers.
You should not plan your transport service without creating an online platform. Start by opening a website; make your website an information center where your clients can go at any time to get information about your services.
On your website, put information like the transport vehicles available and their rates. The website should contain the routes your vehicles travel and what time they move. Also, let there be ways clients can pay online without having to show up in person. Include useful information and safety tips for your passengers and clients, especially if there’s a pandemic, and be sure that they are aware of safety protocols.
Just as you’ll be using your website to promote the transport company, you’ll also need to have social network accounts for the business. Social media is the fastest way to interact with customers and get feedback in real-time. The feedback you get from social media will help you improve the quality of your service.
Prioritize cordial customer relationship
The customer service unit is an essential part of your transportation service, as they are the ones to cater to the needs of your customers. They will make arrangements with the customers, attend to their needs, answer important questions, and assist them in many other ways. Sometimes, clients make mistakes and erroneously blame it on the customer care representative; that’s where well-trained personnel have to show their people skills. You must have a policy that ensures you prioritize helping your clients and handling misunderstandings well.
Keeping your customers happy is the secret to succeeding in the transport business. Your goal must be to convert one-time clients to regular customers, and regular customers to loyal clients. The impression a customer has on its service provider will rub off on others. The competition in the transport industry is the major reason why most businesses do all they can to hang on to their customers.
Give your customers a taste of what to expect even before they get on board. Have them sat in comfortable seats while they wait for their means of transport to be ready. Let there be friendly faces ready to help them with their luggage or at least kindly direct them to where they should go if they need something.
Factors that can affect a transport service
Transport companies have a lot to do to ensure the safe travel of their clients; however, there are external factors that can hinder their goodwill. When these concerns spring up, there’s usually little to nothing a transport company can do.
Hike in gas prices
Gas prices and their availability will always affect the outcome of the transport business. It would favor both the passengers and the transport companies if gas prices were affordable. Transport companies would have a higher chance of making a profit and they would have room to give discounts to their customers. If there’s a scarcity of gasoline (jet fuel, or its equivalent) or perhaps the price gets increased, it would affect the plans of transport companies and they might have to increase their travel fares.
How safe it is to travel
Insecurity will affect any business in its vicinity; when people don’t feel it is safe to leave their houses, they don’t travel. In times when people are unwilling to travel, transport companies won’t make sales. Sometimes, such cases of insecurity could be limited to a region, or a route (probably a highway robbery), without the intervention of law enforcement officers, a transport service may prefer to suspend business activities.
Air and water transport services have to be sure about the weather before deciding to fly. When the coast is not clear, they may have to suspend all traveling activities.
Government policies
Whenever the government makes a decree that could affect the transport sector, a transport service’s hands are tied. Most of the time, certain laws the government put in place are to benefit the people- transport companies included- but they could stall the business. For example, the construction of a highway could mean that your transport company would have to take other alternate routes which could be uncomfortable for everyone. Also, in cases of an insurgency or a pandemic, the government could ban flights from coming into the region.
In summary
There are so many types of transport service companies you can start. Be sure to pick one that you’re comfortable with and understand. Learn all you can and promote your business the most affordable and effective ways known to you.