With advances in logistics startup technology making every step of the business process easier, it’s inevitable that these kinds of innovations would aid people in starting their own logistics companies. In fact, analysts predict that by 2021, the logistics industry will be worth over $215 billion, with a large portion of that coming from startups.
However, unlike other companies, starting a logistics startups can require heavy capital, strong expertise in all things logistics, not to mention the best business process and industrial technologies available. After all, you’ll be in charge of goods management, supply chain movement, among other things, of tons and tons of materials worth millions of dollars.
But it’s not impossible. In fact, with a little know-how and the right tech, even a modest capital can be enough to start a logistics empire. Here are some things to consider when creating your logistics startup.
Be an Expert and Only Work With Experts
One of the biggest mistakes an entrepreneur can make is thinking that logistics is just getting an object to point A to point B; Logistics is complicated, with a ton of moving parts, people, and materials. Before getting into this industry, make sure you have at least a few years of experience working in logistics and be an expert in at least a few steps of the business process.
This should be true for all your partners, as well. Remember that a business is just as strong as its weakest link, and by ensuring that all the people you work with are just as knowledgeable as you (if not more knowledgeable), your business can start and run smoothly with as minimal issues as possible.
Tech Disruption is Necessary
We’ve discussed before how some logistics startups are shaking up the industry with their innovative solutions to age-old problems. From acquiring and implementing the latest in logistics hardware, technology is the way to the future, and is the best way to ensure your success in an ever-increasingly competitive market.
But it’s not just the latest ships or cranes: digital technologies such as blockchain, cloud computing, Internet of Things, and robotic automation processes, to name a few, should be standard across all steps of the business cycle. These key pieces of technology ensure that everything runs like clockwork, leaving you to focus on growing your business or developing new and exciting ways to deliver products.
Preventing Maintenance Prevents Accidents
Obviously, having the right technology is important, but all that fancy equipment becomes useless if you don’t take care of them. But more than just undertaking repairs when it’s necessary, logistics startups should undergo regular preventive maintenance to reduce the risk of their equipment failing. Of course, when something does need to be fixed, you’ll need to have it done by experts no matter how small, whether it’s industrial gear repair or having the tires changed on a forklift.
In fact, when it comes to preventive maintenance, nothing is too small or inconsequential. Be as thorough and as regular as possible when it comes to checking on hardware, software, and even personnel: make sure your employees aren’t burning the midnight oil, especially when they’re handling heavy machinery.
Make Friends Wherever You Go
Specifically, constantly create and curate a network of professionals who can benefit your business apart from customers: manpower suppliers, local distributors, supply chain managers, emergency repair providers, etc.
It’s crucial, however, to have this network before you start your business. This minimizes any potential risks involved in not just the logistics industry, but in starting a business in general. Having a strong professional network ensures that, should any unforeseen events occur, you have people who can help you get back up on your feet.
Manage Your Finances Well
This should go without saying, but unfortunately, many startups, both in logistics and other industries get bogged down during the initial stages of the business with extravagant expenses, unregulated spending, and many other financial FUBARS all because they didn’t hire a financial manager with the good sense to control the cash flow.
This should be startup 101: any money you earn during the first few months/years of operation should be going into reinvesting in your company. Until you see a return of investment or ROI, try not to spend your profits.