Shipping business is one of the fastest growing businesses of today’s time because it helps generate good revenue and with so many businesses importing and exporting, the need for shipping corporations is on a constant rise as well.
There are many shipping companies in the US that have been making billions. Some of the most popular names include Fbabee and CH Robinson. The latter made 13.1 billion sales last year and its revenue is expected to grow even more this year.
However, a shipping business is much more than just buying a ship and delivering cargo on the sea. There are complex factors involved that must be taken care of to make the business thrive.
If you want to open a shipping business then here’s what you need to do:
1. Write A Strong Business Plan
You can’t start this business out of the blue, you’ll need funding sources or partners if budget is an issue. This requires you to have a business plan. This business plan should talk about facts, figures, and strategies that you’ll be depending on. Your investor would like to know how you intend to run the business and make it profitable. This is obviously easier said than done.
In this business plan, mention your selling proposition, target market, skills, price, cost, financial plans, core competencies, etc.
It will help you convince potent investors or help get a loan from a bank.
2. Start-Up Cost
More than 50% of the businesses in the US fail because of money problems. Therefore, it is essential to consider the start-up cost first.
- $10 million to buy a cargo ship
- $750 is the fee for incorporating a business in the US.
- $5000 or more will cost to buy insurance, permits and license.
- $50,000 for renting out an office or warehouse in the US.
- $15,000 for office equipment.
- $15,000 shipping equipment.
Looking at the numbers, you must have figured out that running a shipping business is not cheap and requires a ridiculous amount of money. So, if you do not have this much amount of money then it is better to consider some other business. It is a lot to have on hand, but you may be able to get a portion of it through venture capital, business loans, equity loans, and other various avenues.
3. Selecting An Office Location
When you are new into the market, not a lot of people will be willing to trust you with their goods, especially when there are popular shipping companies in the neighborhood.
Therefore, the first rule of getting an office is to choose a location where competition is not very stiff. A good option is to target a market where there is demand but a lack of shipping companies.
Next, look into the local laws of the state and see that you are not violating any.
Accessibility of the location plays a vital role as well. If people will find it difficult to reach you then it can lead to major problems for you.
4. Staff
This is a technical business which is why you need to hire technical people. An experienced captain to sail the ship, several technicians for maintenance and lots of staff to handle customers, orders, maintain inventory, accounts, etc.
Finding the right people can be very difficult. You may even need the help of professionals in order to hire your team.
5. Marketing
It doesn’t matter how good your business is, if you do not market it properly then your business will fail.
The interesting bit is that you do not promote a marketing company like you promote any other business so be aware of the tips and tricks involved in marketing such a business.
The Conclusion
It is important to consider these things first before starting a shipping business if you want to make it successful.