The transportation business has a wide range of options to choose from. From shipping services, limo rental, to taxi services, you will have a lot of ideas to explore. However, you need to think of any possibilities before starting a business in the transportation field. It takes a lot of planning and requires strategic steps. The following guide will show you everything you need to know to start a transportation business.
#1. Select a Type of Transportation Business to Start
It has been mentioned above that many types of transportation businesses you can opt for. In selecting the rightest transportation business type for your needs, just look at vehicles you have already possessed. As an alternative, you can consider the market you plan to operate for your business. Some popular types of transportation business are taxi companies, limousine rentals, senior transportations, trucking, bike rentals, moving vans, medical transportation, car rentals, and more.
#2. Pick Up a Name and Entity for Your Business
Once you have found the most suitable transportation business for your needs, this is time to choose a name for it as well as the entity. A business entity is important since it will help you structure your business. You might want to pick up the entity first before the name. This is because the entity that you selected will later influence the name of your business. Your options for transportation business entities are sole proprietorships, limited liability partnerships, and limited liability companies.
#3. Create a Business Plan
To get a clear vision of your transportation business, you need to do some research and heavy legwork. When creating a business plan in the transportation field, you need to include all of the basic aspects. These include an overview of the business, market analysis, pricing plan, marketing plan, financial plan, and projections. When doing the research, keep in mind that there is a demand for the business. If there is no demand, your business is unlikely to last long.
#4. Register Your Business and Get an EIN
The next step to start a transportation business is to register for it and get your EIN. To register your business, you need to visit the official website of the Secretary of State where you plan to run the business. Here, you will find all information and requirements needed for the registration. You might need to file certain documents, depending on the entity you choose for your business. Find out if you need to pay for the registration. Some states also require applicants to publish a notice in the local paper sometimes. Once you have successfully registered your business name, you need to apply for EIN (Employer Identification Number). Getting an EIN for your transportation business will make it easier for you to identify theft prevention, file taxes, and establish your business credit in the future.
#5. Get Permits and Licences Permits and licenses are highly needed in the transportation business, even more than other business types such as a coffee shop or boutique. This is because the transportation business needs you to respond to people’s lives or the properties you are transporting. Make sure that you check with your municipality and specific state to get the licenses and permits. According to the SBA, the requirements for the registration will rely on the state where you will operate the business. Consider consulting a lawyer as well or expertise in your business field about all the rules and regulations needed.
#6. Open a Business Checking Account
A business checking account is very much needed if you want to start a business in the transportation field. Also, manage to get a credit card for the business. These two things will make it easier for you to keep your business cash, credit, and personal finances completely separate. Not only that but you can also use a credit card to get instant funding when having difficulties getting a business loan to start the transportation business. However, you need to pay the credit card on time or earlier if possible to avoid serious financial issues in the future.
#7. Get the Funding Required Bear in mind that starting a business in the transportation field is quite expensive. Either you plan to buy or rent, it requires you to invest a lot of money in vehicles. That is why the next important step to start a transportation business is to get any funding you need. Fortunately, many financing options are available out there. However, you might find it a bit harder to get a loan if the business you are starting is categorized as new and small