Todays market is so well grown for all kind of economically beneficial business. Logistic business is one of them, especially in india there os a huge market for the logistic business due to growth of the economy. The data shows that around 5 crore people in india are been employed with the help of the logistic business. If you have a good logistic network then obviously you will able to operate yout business and can earn potential benefit. This all will be the result of reduced in cost and delivery time and thus this will increase the market share fir the business.
There are several types of logistics business that you can start such as: Air Cargo Services, Warehousing Services and Third party logistics. Although there are hundreds of benefits of logistics business and to avail all those benefits you need to consider some of the major steps in order to run the business successfully.
How to Register for Logistics Business?
No matter which business you are intending to set up, it has to be legal and properly registered. So, you must consider the proper registration and compliance certifications. You need to get government compliance with legal registration in order to run your logistics business.
Every countries have there own mandatory registration but in the case of India, if you are a freight forwarder then you must get registered with International Air Transport Association and the Air Cargo Agent Association of India. In India, Institute of Logistics solves and raises all the major concern related to the logistics industry so you must also get registered and become part of this forum.
Apart from these, other important registrations required are Registrar of Companies, Income Tax department registration, and other departments as well. Some of the registration that might proved to be the best can be trade mark registration, VAT registration, Import and export registration, PF registration and Private limited company registration.
You must have heard, no investment no business. This is actually the fact, to establish any kinds of business you need to invest in it, but the investment can be directly yours or gained through some investors or share holders. Logistics Business needs investment in the very first step of starting it. The amount that you need to invest will depend on the service that you are going to offer. Here we can give you a small example of what amount you would be requiring. In the case og freight forwarding, you might require 12 crore of investment. A third party service company will require investment of around 100 crores. And similar other higher services will require more investments. So, before investing you must plan and target the most essential services.
Hence it is essential to identify the services that one needs to target and prepare an investment plan based on the same. Due to liberal FDI norms, it is relatively simpler to find investment in logistics in India. Interest in the sector shown by large private equity players would also help get funding.
If you are planning to do a business, you must be ready to cope up with all the possible risks because there is no business without risk. Starting a logistics business needs good risk management skills since that will play the most important role to survive the market ups and downs. You must always be ready with a backup plan to prevent you from any bankruptcy. Especially in this business, you would be connected to a big network that will include many partners and vendors which will make it more riskier. Anytime the things can start going opposite to what you had planned, and in business it's not the time to panic but to show your real risk management skills. Make sure to take the adequate amount of insurance that will work as good liability in the case of any loss.
Apart from business related risks, there can be more damages which are totally unpredictable such as theft, environmental calamities, injury, cargo damages, etc this is why you can buy any insurance plans suitable to you from any insurance companies in India. These insurance will somewhat help you to recover the losses as the source of liability but things won't work all the time so the most effective solution will be analysing the risk prior to causing any damages. So make sure you are timely getting all the things checked.
How to get the Clients?
For any business, the most important key is the clients. You need good number of clients to get orders and eventually earn profit. If you succeed in engaging the clients, you will probably earn a huge profit in your business. To attract the clients you need to think as a client, you have to understand the needs of the clients in the logistics industry. This would be beneficial of you are investing in third party logistics business. To understand the need, you need to know about all the sectors that are booming and are demanding high goods. Currently there are several sectors which are progressing rapidly such as auto, services and manufactures and all of these sectors needs a thing in common which is logistics services. Now you know about the sectors where you can gain the new clients now thoroughly study the weak areas to gain more new clients and earn profit. In this way you can develop a good network in a particular industry or service sector which will further help you to join more new clients.
Identifying the Competition
There is high level competition in the logistics business and the major reason behind this high competition is the allowance of FDI to all the multinationals to enter the logistics sector of India. Since these big multinational companies can invest a heavy amount in the industry, it becomes the major competition. If you want to stand in the industry then make sure that you have done the complete research on the competition and their market positions.
Henec, these were some of the very crucial things that you must consider while starting your own logistics business. Although the industry is full of benefits, you must be aware about the upcoming risks and ways to cope with them. These major steps will highly beneficial for you to provide a perfect guidance on how to start logistics business.