Transportation Service: Step-By-Step Startup Guide

By The Staff of Entrepreneur Media

Transportation Service shows readers how to create a revenue stream by thinking outside the traditional transportation box. Features information on how to start businesses in the areas of ride sharing, executive car service, special events, medical transport, and pedicab/party services. The personal transportation business is the hottest trend in the service industry, offering riders an alternative to traditional taxi, bus, and shuttle services. The perfect business for the entrepreneur, a transportation service allows business owners to go as big or as small as their market allows, from a single-car ride share service to a full-fleet operation with multiple drivers. Featuring Entrepreneur's trusted branding and strategies, this title gives readers the keys to success.

• Language: English
• Publisher: Entrepreneur Press
• Release date: Apr 18, 2016
• ISBN: 9781613083383

The Staff of Entrepreneur Media

For more than four decades, Entrepreneur Media has been setting the course for small business success. From startup to retirement, millions of entrepreneurs and small business owners trust the Entrepreneur Media family; Entrepreneur magazine, Entrepreneur.com, Entrepreneur Press, and our industry partners to point them in the right direction. The Entrepreneur Media family is regarded as a beacon within the small to midsized business community, providing outstanding content, fresh opportunities, and innovative ways to push publishing, small business, and entrepreneurship forward. Entrepreneur Media, Inc. is based in Irvine, CA and New York City.

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Entrepreneur Press, Publisher

Cover Design: The Staff of Entrepreneur Media, Inc.

Production and Composition: Eliot House Productions

© 2016 by Entrepreneur Media, Inc.

All rights reserved.

Reproduction or translation of any part of this work beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to the Business Products Division, Entrepreneur Media Inc.

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

Transportation Service: Entrepreneur’s Step-by-Step Startup Guide,

ISBN: 978-1-61308-338-3

Previously published as

Start Your Own Transportation Service, ISBN: 978-1-59918-585-9,

© 2016 by Entrepreneur Media, Inc., All rights reserved.

Start Your Own Business, 6th Edition,, ISBN: 978-1-59918-556-9,

© 2015 Entrepreneur Media, Inc., All rights reserved.

Contents

Start Your Own Transportation Service

Preface

Chapter 1

An Overview of the Transportation Industry

The Current State of Small Business in America

The Small Business Administration (SBA)

Service Corps of Retired Executives (SCORE)

The Transportation Industry as a Whole

Homebased

The Storefront

Transportation Business Options

Taxi Service

Bicycle Rental

Limousine

Owner/Operator Trucking

Moving Van Business

Specialty Transport

Air Transport

Marine Shipping

Medical Transport

Senior Services

Chapter 2

Is Transportation the Right Business for You?

Test Yourself

Small-Business Personality Traits

Other Things to Consider

The Pressure of Schedules

On the Road Again

All Business Is Local

Your Final Answer

Chapter 3

Meet Your Mentors

East Coast Equine Transport (www.equine-transport.net)

Seacoast Helicopters (seacoasthelos.com)

Orcas Island Taxi (orcasislantaxi.com)

Chapter 4

Transportation Business Basics

Naming Your Baby

On a Mission

Choosing a Business Location

Business Types

Sole Proprietor

General Partnership

Limited Liability Company

Corporations

Licenses and Permits

Choosing Insurance

Forms

Proposals

Agreements

Invoices

Receipts

Chapter 5

Market Research for the Transportation Industry

The Basics of Market Research

Types of Market Research

Where to Begin

Trade Associations

State of the Industry

The Details

Local Market Research

The Research

Focus Groups

What Makes You Stand Out?

Chapter 6

Financing and How to Get It

First Things First

Don’t Forget Life

Finding Financing

Get Your Credit in Shape

Networking

Your Business Plan

The Components of a Successful Business Plan

Buying Office Equipment and Inventory

Essential Equipment

Inventory

Chapter 7

Licensing, Regulations, and Maintenance

Zoning

Garaging Your Fleet

Licensing

Commercial Driver’s License

Federal Licensing and Regulations

State Licensing and Regulations

City Ordinances

Environmental Laws

Safety

Vehicle Maintenance

Maintenance Supplies

Chapter 8

All Things Digital

Mobile Websites

Setting Up a Website

Design

Website Must-Haves

The Homepage

Drilling Down

The Rest of the Site

Contacting You from a Website

Updating

Marketing Your Website

Your Website URL

Keep ’Em Interested

Choosing a Web Host

Chapter 9

Employee Considerations

Whom to Hire

Reaching Out to Candidates

Advertising

Interviewing

Interviewing Strategies

Pay

Training

Letting Employees Go

Seasonal Workers

Layoffs

Termination for Reason

Vendors

Professional Services

Chapter 10

Day-to-Day Finances

Financial Statements

Organizing Cash Flow

Pricing Your Services

Maintaining Cash Flow

Break-Even Point

Taxes

Deducting Expenses

Chapter 11

Making Sure the World Knows You Exist

The Difference Between Sales and Marketing

Why Marketing?

Networking to Business Success

The Ins and Outs of Advertising

The Small but Mighty Business Card

Information Brochures

Direct Mail

Newsletters

Press Releases

Make It Newsworthy

The Power of Customer Service

Retaining Customers Through Topnotch Customer Service

Giving Back to Your Community

Building Your Image

Traditional Media with a Digital Twist

eNewsletters

Chapter 12

Social Media

Blogs

Facebook

LinkedIn

Twitter

Photo-Sharing Platforms

Pinterest

Instagram

Snapchat

Appendix

Transportation Resources

Books

Blogs

Conferences

Magazines

Organizations

Glossary

Index

Start Your Own Business

ON YOUR MARK . . .

PART 1

THINK

CHAPTER 1

Introduction

CHAPTER 2

Taking the Plunge: Get Ready to Be an Entrepreneur

CHAPTER 3

Good Idea!: How to Get an Idea for Your Business

CHAPTER 4

Good Timing: Should You Launch Your Business Part or Full Time?

CHAPTER 5

Build It or Buy It?: Starting a Business vs. Buying One

PART 2

PLAN

CHAPTER 6

Choose Your Target: Defining Your Market

CHAPTER 7

If You Build It, Will They Come?: Conducting Market Research

CHAPTER 8

The Name Game: Naming Your Business

CHAPTER 9

Make It Legal: Choosing a Business Structure

CHAPTER 10

Plan of Attack: Creating a Winning Business Plan

CHAPTER 11

Call in the Pros: Hiring a Lawyer and an Accountant

PART 3

FUND

CHAPTER 12

All in the Family: Financing Starts with Yourself and Friends and Relatives

CHAPTER 13

Nothing Ventured, Nothing Gained: How to Find and Attract Investors

CHAPTER 14

Looking for Loans: The Ins and Outs of Debt Financing

CHAPTER 15

Fed Funds: How to Get Government Loans

GET SET

PART 4

PREPARE

CHAPTER 16

What’s Your Deal?: Negotiating Successfully by Cliff Ennico

CHAPTER 17

Site Seeking: Choosing a Location for Your Business

CHAPTER 18

Looking Good: Creating a Professional Image

CHAPTER 19

Stock Answers: The Lowdown on Inventory

CHAPTER 20

It’s in the Mail: Setting Up Mailing Systems

CHAPTER 21

Charging Ahead: Offering Your Customers Credit

CHAPTER 22

Cover Your Assets: Getting Business Insurance

CHAPTER 23

Staff Smarts: Hiring Employees

CHAPTER 24

Perk Up: Setting Employee Policies and Benefits

PART 5

BUY

CHAPTER 25

Buyer’s Guide: Business Equipment Basics

CHAPTER 26

Business 24/7: Using Technology to Boost Your Productivity

CHAPTER 27

Net Works: Building Your Company Website

CHAPTER 28

Keep in Touch: Using Technology to Stay Connected

GO

PART 6

MARKET

CHAPTER 29

Brand Aid: Building a Brand

CHAPTER 30

Marketing Genius: Advertising and Marketing Your Business

CHAPTER 31

Talking Points: How to Promote Your Business

CHAPTER 32

Sell It!: Effective Selling Techniques

CHAPTER 33

Now Serving: Offering Superior Customer Service

PART 7

ENGAGE

CHAPTER 34

Net Sales: Online Advertising and Marketing

CHAPTER 35

Social Studies: Social Media Marketing

CHAPTER 36

Can You Relate?: Social Media Networking

PART 8

PROFIT

CHAPTER 37

Keeping Score: The Basics of Bookkeeping by J. Tol Broome Jr.

CHAPTER 38

Making a Statement: How to Create Financial Statements by J. Tol Broome Jr.

CHAPTER 39

On the Money: Effectively Managing Your Finances by J. Tol Broome Jr.

CHAPTER 40

Pay Day: How to Pay Yourself

CHAPTER 41

Tax Talk: What You Need to Know About Your Taxes by Joan Szabo

APPENDIX

Business and Government Resources

Glossary

Index

Additional titles in Entrepreneur’s Startup Series

Bar and Club

Blogging Business

Child Care

Cleaning Service

Clothing Store and More

Coaching Business

Coin Operated Laundry

Consulting Business

Construction and Contracting Business

Couponing Business

eBusiness

Event Planning Business

Fashion Accessories Business

Food Truck Business

Freight Brokerage Business

Freelance Writing Business and More

Grant-Writing Business

Graphic Design Business

Green Business

Hair Salon and Day Spa

Import Export Business

Information Marketing Business

Lawn Care or Landscaping Business

Medical Claims Billing Service

Online Education Business

Personal Concierge Senrice

Pet Business and More

Photography Business

Personal Training Business

Public Relations Business

Restaurant and More

Retail Business and More

Self Publishing Business

Senior Services Business

Day Spa and Mare

Travel Business and More

Tutoring and Test Prep Business

Vending Business

Wedding Consultant Business

Wholesale Distribution Business

Preface

The transportation industry in America is alive and well. And there are so many entrance points that anyone interested in starting a small business could find something in the transportation industry that would interest them and utilize their strengths and skills.

One consistent piece of advice we received from all transportation business owners—advice that is common with all small-business startups—is that you cannot do enough planning before you start your business. And one important part of planning is to talk with others in the field you intend to enter. Transportation covers a wide range of services—we interviewed a taxi cab service, a horse transport business, and a helicopter business, showing with just those three businesses how diverse this field is! And each one of them has its own set of complex regulations. Hauling livestock requires knowledge on interstate agricultural regulations, helicopter service is subject to a huge array of federal aviation regulations, and any service carrying human passengers is highly regulated—something that the popularity of the five-year-old ride service Uber has challenged as antiquated. But despite regulations, the transportation field offers some lucrative and creative business possibilities.

Planning is important and made easier with the amount of information available on the internet. Government regulations might be hard to slog through, but you can do it in the comfort of your own home without having to print out hundreds of pages.

Don’t forget to look up from the computer and talk to people who have been in your shoes and gone on to run successful transportation businesses. Utilize the SCORE program of retired executive advisors. While these entrepreneurs may not have kept up on the most recent changes in regulations, they have great advice and experience to draw on.

So sit back, relax, and read about what you need to do to get off on the right foot in this intriguing industry known as transportation. This is admittedly just the tip of the iceberg of the research you will need to do and the planning you will need to put to paper, but you have to start somewhere. This book will launch you on one of the more interesting journeys of your career.

CHAPTER 1

An Overview of the Transportation Industry

From taxis to limousines to bicycle rentals, moving vans, and long-haul transport of refrigerated goods, the transportation industry has a wide range of entry points. Whatever your particular interest is, there is likely a transportation business that can fulfill it.

But first, let’s look at small business as a whole.

The Current State of Small Business in America

According to the U.S. Census Bureau, small businesses (defined as those with 250 or fewer employees) employ 56.1 million of the nation’s private workforce. Firms with fewer than 100 employees make up the largest part of small-business employment.

stat fact

According to the U.S. Department of Transportation’s Bureau of Transportation Statistics, the value of freight carried by all modes of freight transportation (air, ship, pipeline, rail, and truck) was lower in 2015 than 2014.

That said, small business is far from immune to the ups and downs of business cycles. It has taken a while for the small-business sector to recover from the recession in the late 2000s. Just in 2015 did birthing of companies exceed the exit rate, a trend not seen since 2007 according to Business.com. Small businesses are the forefront of our economy. . . . Every minute, a new business in the U.S. is started and according to some people, more than 50% of all workers will be self-employed by 2020. (The State of Small Business in 2015, May 5, 2015, by Betsy Scuteri, www.business.com.)

State of Small Business

Wasp Barcode’s State of Small Business Report (www.waspbarcode.com) found the following statistics:

47 percent of small businesses were more confident in the economy in 2015 than a year before.

Product companies were anticipating higher revenue growth than non-product companies.

57 percent expected revenue growth in 2015.

56 percent expected to invest less than 3 percent in marketing.

38 percent were expecting to hire employees in 2015.

38 percent planned to spend money on IT in 2015.

35 percent view their company website as very or even extremely important.

54 percent spent over $5,000 in on IT-related equipment and software in 2014.

The Small Business Administration (SBA)

With statistics like the ones from the U.S. Census Bureau showing that small businesses, homebased or not are responsible for the employment of 56.1 million people, it’s no wonder the U.S. government has an administration devoted to small businesses. Anyone thinking about starting a business should have the SBA (www.sba.gov) bookmarked for quick access. There is a wealth of information on this site; you couldn’t do much better than to start your small business research here.

fun fact

Trucks carried 59.1 percent of the $48.3 billion of freight to and from Canada in September 2015, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics.

The Small Business Administration started in 1953. It is an independent agency of the federal government helping Americans start and grow small businesses through field offices throughout the U.S. and its territories. The SBA was designed by Congress to also ensure that small businesses get a fair proportion of government contracts and sales of surplus property. You can quickly see that using the SBA to its fullest is only to any small business’s advantage.

Through the years, the SBA has met current challenges in the small-business arena such as focusing on minority- and women-owned businesses with special programs and education to help these businesses thrive. They publish a Small Business Resource magazine and annual national resource guides. These resources contain educational information on things like how to apply for a government contract and keep you up to date on current legislation and advocacy on behalf of small businesses, as well as some small-business basics like advice on creating a business plan and how to obtain financing.

The SBA was created for you. You will do yourself a favor by referring to their site and contacting them whenever something comes up in the startup phase or as you establish your transportation business.

stat fact

According to the SBA, each state has a portal dedicated to commercial transportation, to help you understand the regulations your state requires and the assistance your state provides.

Service Corps of Retired Executives (SCORE)

Imagine 13,000 volunteer mentors at the service of the small-business world. That’s what the nonprofit organization SCORE (www.score.org), formed in 1964, is all about. There are almost 400 SCORE chapters throughout the U.S. in urban, suburban, and rural communities. Over ten million Americans have used SCORE’s mentoring services. These mentors can help you at any stage of your business, from planning, to startup, to growth.

warning

Many small-business leaders point to health care costs along with EPA regulations and increased stringency in OSHA compliance as making it harder and harder to do business today. You shouldn’t let this deter you from starting your business, but you should be very aware of these costs as you get started.

Go to the score website at www.score.org and click on the link SCORE Locations to find a chapter near you. A check of the zip code 03801 (Portsmouth, New Hampshire) produced one chapter right in Portsmouth and five other chapters within a 50-mile range of Portsmouth.

After locating a chapter near you, you submit a request for a mentor, get together with your mentor to get help on specific goals (or help creating specific goals!), and follow up with your mentor throughout the life of your business. SCORE offers online resources that you can sign up for to have emailed to you, and they offer local and online workshops and webinars for further education as well as community events such as roundtable discussions and seminars. The website has everything you need to locate all of these services.

The Transportation Industry as a Whole

The transportation industry has so many niches that you will want to spend time figuring out what niche is the right one for you. You likely already have an idea of the type of transportation service that you are interested in, whether it’s owning a fleet of 18-wheelers that move manufactured goods or one Ford F-350 dually with a gooseneck stock trailer that you use to move people’s personal horses around, or a business where you sit in an office and manage a stable of drivers who provide medical transport for senior citizens. It’s all transportation.

warning

The transportation industry is heavily regulated in every state. Do not ignore these laws, which cover things like driver’s license requirements, rules, manuals, safety information, licenses and permits, taxes, and all other related issues.

Homebased

The SBA offers the following five steps to help you decide if a homebased business is right for you:

1.Ensure that you and your home are properly equipped for the type of transportation business you intend to start. Do you have the parking space needed? Does your business fall within the limits of local zoning laws?

2.Finance your homebased business. The SBA does not give out loans, but they do have a guaranty program with banks and lenders that you should check out. Their microloan program guarantees loans averaging $13,000 with the high side at $35,000. Underfinancing small businesses is one of the key portals to failure.

3.Take the appropriate steps to license and register your homebased business. It is not worth it to try to skirt around the regulations. You do not want to risk your business.

4.Understand the regulations that govern your specific transportation niche. Again, you need to know what you are required to do, and you need to do it. It is not worth risking all your hard work trying to skirt around regulations that just seem too difficult. Find out all you need to know.

5.Thoroughly understand the insurance requirements of your niche of the transportation business. The SBA says if you own and oversee the operation of commercial vehicles, your insurance requirements will cost more than many other businesses. Discuss your specific needs with a local insurance specialist.

aha!

Who says your transportation business has to be shipping a container full of hundreds of objects? You could really specialize and provide transportation services for massive parts for the airline industry. This would require special vehicles and special knowledge—it may mean fewer shipping jobs, but each one will be much more lucrative than individual, smaller shipping jobs.

The Storefront

Some transportation-related businesses may require a retail-like storefront—bicycle or car rentals, for instance. Starting and running a retail store of any kind is an animal all its own and one that, according to the Small Business Administration, more than a quarter-million people in the U.S. earn a living doing. The SBA offers the following tips to get you off on the right foot:

Find the right location. Your location needs to be where your target market goes. The SBA recommends making sure to combine visibility, accessibility, affordability, and commercial lease terms that you can live with. In the case of car rentals, that might mean being near an airport and offering a pickup and drop-off service. For bicycle rentals, you need to be located near parking for vehicles and in an area where bicycling is safe, fun, or convenient.

Finance your retail venture. In other words, make sure you have the proper financial backing to fund your startup until the business starts to earn income. This is key for any small startup of any kind and one of the main reasons that small business startups do not make it. Chapter 6 walks you through financing. A retail storefront requires you to consider financing for a lease, purchase, improvements, specialized display furnishings, some sort of transaction equipment such as a cash register or point-of-purchase tablet with software, phones, electricity, heat or air conditioning—the whole gamut that any retail business needs to pay for.

stat fact

Small businesses created 108,000 jobs in March of 2015.

—ADP Payroll Services

Business Secrets You Should Know

Here are a few things, according to the Retail Doctor’s Blog (41 Things No One Told You About Starting a Retail Business at www.Retaildoc.com) that might surprise you. They were written specifically for retailing, but the following applies to any small business:

As soon as you figure out what your customers want, they will want something totally different.

People in your town will assume you are rich because you have your own business.

Sometimes a Tuesday might be your best day; other times it will be a Friday. In business, there is often no consistency.

The customer is always right.

You will rarely have a for-sure day off again.

Just because someone asks for a discount doesn’t mean they won’t do business with you if you don’t give them one.

Running a business is harder than you think it’ll be, but you won’t really have time to notice.

Determine your business structure. Do you want to head out alone or do you think a partnership of some kind might make it more likely for your business to succeed? If you decide on a partner, choose one who complements your own skill set. Partnerships can sour very easily, but if you do your upfront due diligence, it might end up being the best decision you make for the success of your business. Maybe you are the one doing the behind-the-scenes marketing and bookkeeping for your bicycle rental business while your partner interacts with customers and keeps the bicycles in good repair.

Take care of the regulatory requirements involved in starting and operating a business. The transportation business has some unique and strict regulations that you will want to be sure to know and adhere to.

save

Processing payment even if you don’t have a storefront anchored by a cash register is easier than ever before with the advent of devices like the Square swipe and chip readers. They attach to your phone or tablet, are secure, and offer competitive per transaction rates. They can even be used if you are in an area with no signal; swipe anyway, and they process when you are in range.

Transportation Business Options

The following represent many of the possible types of transportation businesses you could decide to start. It all depends on what your personal interest is and what skills you want to employ in your business.

Taxi Service

Despite its initial controversy and claims of unfair competition and lack of licensing requirements from the established medallion-holding taxi companies, San Francisco-based Uber has staked its claim across the world—in fact, in 400 cities and 65 countries (The Inside Story of Uber’s Radical Rebranding, Jessi Hempel, www.wired.com, 2/2/16). Uber’s attraction as a small-business opportunity is that you are an independent contractor and on your own schedule. To sign up as a driver, start by going to their website at www.uber.com, and click on the Become a Driver button. A short questionnaire initiates the process.

There is no hailing of an Uber cab; Uber’s service is based on the Uber app. When someone needs a ride, they submit a trip request through the app. Uber drivers in the area get the request and must respond quickly to get the fare. The person requesting the ride can track the Uber driver on the app as it makes its way to pick them up.

As a driver you use your own vehicle, so startup costs are relatively low. Uber handles all the financial aspects of the ride. And not only can riders rate drivers using the app, but drivers can also rate users!

Payment to the driver is on a weekly basis. As independent contractors, drivers take on overhead costs (gas, maintenance, insurance, etc.) themselves. SherpaShare (www.sherpashare.com), a financial analytics site, says Uber drivers everywhere (except New York City where rates are highest), make in the range of $8.80 to $11 per hour gross before Uber’s percentage is taken.

Of course anything that is as successful as Uber immediately generates competitors. Lyft, which operates similarly to Uber, is one. Sidecar is another, but the Los Angeles Times reported that Sidecar did not make the cut and ceased rideshare operations at the end of 2015.

Bicycle Rental

Renting bicycles is a thriving business in certain areas. The two key environments where renting bikes is a natural are in recreational tourism areas and cities.

In tourism areas, you might look to set up near a large hotel or resort where extended vacations stays create ready customers. In this type of business, you are going to need a storefront. Depending on your location you will need an open space where you can store all your rental bikes, or, if outdoor space allows, you can construct a simple canopy-style covering to keep your bikes under cover.

You will want to distinguish yourself as renting to the more serious cyclist with high-quality bicycles or leisurely riders with simple bicycles.

Another possibility for bicycle rentals is the bicycle-sharing approach like Hubway in Boston. Bicycle stands around the city allow riders to rent a bicycle in one place, ride to their location, and drop the bicycle at a stand near their destination. Hubway offers annual or monthly membership or daily passes. Perhaps your town is ready for a mini version of this business.

Limousine

You could provide limo service to celebrities or to regular people and make them feel like celebrities; the choice is wide open. While these two services are very different in many ways, there are some fundamental similarities. We’ll focus here on the regular people limo service.

First, you need to have a sparkling reputation. Whenever anyone is entrusting you to drive them, a clean reputation is important. But in the case of the personal limo service, typically you will be driving a group of people who are not paying attention to where you are going or how you are driving but are enjoying the ride, which is what a limo is all about—luxury accommodations with perhaps a bar, a television, wifi, and music. The limo offers the opportunity to have a little party en route, party at the destination, and a safe ride home, especially if the customers have consumed alcohol. The driver needs to be supremely trustworthy, and the vehicle needs to be safe and well maintained.

You can operate the limo yourself with a modest limo service. That sounds like a lot of fun, and it may be exactly the way to start out. Your fleet of one limousine will be relatively easy to maintain. And you can provide all the service yourself, from scheduling to driving. If you want to expand, you’ll have to pony up the cash to do so. Just add vehicles and drivers, and keep expanding your marketing to keep business flowing.

That all makes it sound easy, and of course it isn’t exactly quite that simple. But having started slowly with one vehicle and yourself as driver, you get to understand your business and soup to nuts: vehicle care, licenses required, what customers expect—you’ll have personally experienced it all.

A business owner who has done all aspects of his or her business can really provide great insight and management leadership to employees. When an employee has an issue or complaint, you know what they are talking about. And, if you really are a good manager, you can use your hands-on experience to prevent employee complaints before they happen.

Your business plan should reflect how you plan to start your business and how you would expand when you are ready. When you create a pro forma budget, have it reflect the costs of expansion and how you might finance that, especially if you plan to expand by saving as you go along. Use the Startup Expenses Worksheet in Chapter 6 on page 69 to create a budget.

Owner/Operator Trucking

Although international trucking, including Canada and Mexico, is an enormous sector of the trucking industry, we will focus here on trucking within the United States. Adding those international markets can be a growth factor for your national business; if you think that is the direction you will want to head and expand into, start doing research now in order to be ready to dive in when the time seems right.

The basic format of the trucking business is to bid on and fulfill contracts. According to the SBA, there are two basic forms of operating, with the key difference being how you get drivers to fulfill those contracts (or accounts if you contract to do all of the trucking for a business). The two forms are:

1.Subcontract drivers. The drivers, in this case, are not employed by your company. They are independent contractors who likely own their own equipment. In this scenario, you are spending your time on two key coordination pieces—getting the contracts and accounts with the manufacturers who need goods transported and then finding drivers who can fulfill those contracts on schedule. The advantage is, of course, lower costs—independent contractors not only usually have their own vehicles that they maintain themselves but they insure them and themselves as well. Insurance is a huge cost factor in the transportation business, so clearly this is a savings. However, you will also be paying them a higher fee than if you were paying your own drivers, which cuts into profits. The real trade here might be in fewer headaches—as long as you feel confident of the drivers you hire.

2.Privately owned drivers. In this scenario, you own the trucks and the drivers work for you. You have total control and retain all profit—and you pay all of the expenses of employees and equipment, which means higher startup as well as higher operating costs. While your drivers will be at your service for the accounts and contracts you retain, the pressure is on to have no down time because you are paying for those drivers and those vehicles whether you are using them or not. If coordinating and scheduling is more of your strong suit, you may find that setting up your business using contracted drivers is the best way to go. Or maybe a combination of both—a manageable number of drivers and size of your owned fleet with a stable of contract drivers to call on when you get more contracts than you can handle.

Moving Van Business

Starting a small moving business is relatively easy—which also means you need to keep in mind that you will likely be competing with a couple of strong college students with a rented box truck. Your ace card will be that you will set up and conduct your business professionally, perhaps offering add-on services such as space for temporary, in-between-moves storage. That kind of added service can give your business more of an impression of stability, especially compared to the local college student setup.

Be sure to promote your integrity and status with emblems of professional associations to which you belong. Try to get your business in the news (in a good way) by volunteering in the community, sponsoring a charitable event or a kids’ sports team with your name on their uniforms. And be sure to have satisfied customers give testimonials that you splash on your website, tweet, or post on your Facebook page.

Startup costs include purchasing one or more trucks in a range of sizes that will accommodate the type of moving you plan to do. And, of course, you will need a place to park them.

You will need at least one employee—you can’t lift that sofa alone! And you will need to train that employee for packing, moving procedures, customer interactions, how to behave appropriately in a client’s home, etc., so that your professional reputation isn’t damaged.

Specialty Transport

Specializing in a specific kind of unusual transportation—extremely large items such as airplane parts, or modular houses, or refrigerated perishables, blood, or human organs for transplant—can provide a healthy income. You will likely have fewer clients but can charge higher fees for the expertise you have or gain from specializing. Depending on where you are located (for example, a medical transport business in downtown Boston where there are numerous large medical facilities opposed to a small town in southern Indiana) will dictate whether you can do this business yourself or you need employees.

stat fact

If you are starting a trucking business, be sure to understand IRS Form 2290, Heavy Highway Vehicle Use, which covers the tax regulations related to heavy use of U.S. roads.

Livestock Transportation

The horse industry is alive and well across the United States, and livestock hauling of cattle is a viable transport service in the Midwest and western parts of the country. Although you don’t need any specific licenses for transporting personal horses for customers unless you get into commercial-size vehicles that hold many animals, you will definitely need equine or bovine experience for potential clients to trust your ability to transport their animals, and you need to familiarize yourself with the livestock transport regulations for crossing state lines.

Although the livestock owner, not you, will be responsible for having their animal ready for transport to its final destination, you will want to know the livestock regulations of any state you will be entering. Most states have at least minimum requirements of certain infectious tests (including a health exam) and/or vaccinations for entering their state. Do not leave it up to horse or cattle owners to know these regulations; while they may be the one lining up and paying the veterinarian who will do these tests, you will want to be knowledgeable to advise them. It is to your benefit to make sure they have the proper paperwork for you to carry on the transport and show at the final destination or anywhere along the way that is necessary. All of this will help make your trip with their animal go smoothly.

To make sure the trip goes smoothly for the animal, you need to be knowledgeable about livestock. Or you need to hire someone to do the actual transport who is knowledgeable. It requires patience and knowledge if a horse or cow refuses to get in a trailer. Keep in mind that if you are transporting any distance and need to overnight, you will need to get the animal on and off the trailer several times. And not only do you need to know how to deal with things on the road—tricks to get the horse to drink while traveling and help avoid colic, how to treat or bandage a wound if necessary—you also need to know the basics behind driving carefully while towing a live animal. Getting a veterinary technician license or bringing a certified vet tech with you might be useful and give you an edge for getting customers and word-of-mouth praise.

Boats

Transporting boats is another specialty business that can be lucrative and interesting if you are in a maritime area. Keep in mind that this will be a seasonal business—and extremely busy during the pre- and post-boating season since everyone will want their boat in the water or taken out of the water in the same general timeframe.

You will need to decide what kind of boats you want to transport. A speedboat for the lake has a very different trailer requirement than a large sailboat with a mast and a keel. Most marinas have their own boat-moving operation to get boats off the moorings and slips owned by the marina and into their boatyard. But if the boat is going to be moved to someone’s backyard for the off season or otherwise being moved somewhere that sailing it there is not possible to do, it will need over-the-ground transport by someone like you. You can equip your rig to unstep the mast before transport, or, if the boat is at a marina, the boat owner could have the marina remove the mast; one way or another this is a necessity since you will not be able to transport a sailboat with a stepped mast in almost any town in the country, given utility wires.

Although motorboat transport would likely be a higher-volume business, it is also something many boat owners can do themselves. But if you keep your prices reasonable and become known for taking extra good care of the boats you transport, you may find people hiring you to take care of this for them anyway. Motorboat owners are more likely to have room in their yard to store them than those with large sailboats, especially ones with keels. However, covered storage is appealing, so if you can provide this you can have an added-value component to your business. Boat storage garages can have multiple stories, but you need a specific piece of equipment to lift them up and move them into position on the upper layers. You can also add the service of shrink-wrapping the boat before storage.

The startup funding for boat transport is modest but perhaps surprisingly higher than you might think, especially given the cost of pickup trucks. You will need an appropriately sized truck and perhaps two or three different-sized trailers. Also important is liability insurance to cover the boats you transport and the possibilities of things that can happen when you haul things. That storage option is a good expansion aspect to the boat hauling business.

Air Transport

Transport by air, whether plane or helicopter, involves significant startup costs for equipment, licensing (for yourself and/or employees), and insurance. But if you really want to specialize, this is one way to do it. Small plane transport can be of goods or people like hunters or skiers headed to remote territory, delivering goods or mail to islands, or even transporting freight internationally. According to the World Bank website (www.worldbank.org), The demand for air freight is limited by cost, typically priced 4 to 5 times that of road transport and 12 to 16 times that of sea transport. . . . Commodities shipped by air thus have high values per unit or are very time-sensitive, such as documents, pharmaceuticals, fashion garments, production samples, electronic consumer goods, and perishable agricultural and seafood products.

You would need to get your ducks in a row using a facility that has excellent cargo handling and inspection equipment (especially for agricultural products and other items highly regulated when they move around the country) and customs if you plan to do any international shipping since moving products by air is all about speed. You don’t want to offer flight shipment only to lose time on the ground on either end.

fun fact

The taxi service has traditionally been very highly regulated with transferrable permits, called medallions, in large markets valued in the hundreds of thousands of dollars. The changing cab market, instigated by ride-hailing services like Uber and Lyft, have devalued those permits and are starting to change the way taxi regulation is handled.

Air transport is definitely a possible transportation business, but you will need to give yourself lots of lead time to do research and set up the links you need to offer a smooth service.

Marine Shipping

Transport by boat (the original source of the word shipping) is a huge business. This is also a huge business to start. Marine shipping is often by tankers stacked with containers that get lifted off the trailer of an 18-wheeler and stacked on the boat, typically entails international import/export business, and requires knowledge of customs regulations in general and for specific merchandise. If you are an expert scheduler and coordinator, perhaps this is the business for you. But, like air transport, be prepared for a lot of research, planning, and need for significant startup resources.

warning

According to the SBA (www.sba.gov), the nature of any transportation business means there will generally be a special requirement for a license or permit. Check with your state department of health and human services to see if there is a permit to become an approved provider of even the most basic medical transport services.

Medical Transport

Medical transport is an important business in the transportation arena. There are several ways to focus this business. Some require no more than a regular vehicle, driver’s license, and a solid driving record. You could focus on transporting seniors to medical appointments locally, or, if you live in an area that is a distance from a city, you could focus on driving people long distances to specialist appointments at world-class hospitals. If you have an EMT license, other medical credentials, or are willing to get them, you could start a business that contracts with hospitals to drive admitted patients to other medical facilities for specialized treatment; this would also require some specialty equipment like oxygen delivery and perhaps a vehicle that can transport a patient in a wheelchair.

Air transport is even a subset of medical transport. Even some of the smallest hospitals in more rural areas have a helipad for rapid transport of patients to larger facilities for specialized care.

Senior Services

America is aging at a fast pace. As older citizens relinquish their driver’s licenses, there is a business to be had for driving the senior set to places they can no longer take themselves. Focusing a transportation business on the senior set could keep you plenty busy. Beyond medical appointments, you could drive seniors to the grocery store or to outings at the mall. If you are in an area where seniors tend to be low-income (and all but the wealthiest seniors are likely on a fixed income of Social Security and whatever retirement income they managed to collect while working), you could even consider setting up as a nonprofit business and getting grant support to help seniors in your region be more mobile. Grant funders, corporate sponsors, and the federal government are often looking to utilize their funds for human service programs coming to the aid of the most vulnerable citizens.

CHAPTER 2

Is Transportation the Right Business for You?

It is likely that you drive a car. You probably have moved yourself or a friend using a large U-Haul truck or driven friends or elderly family members to doctor’s appointments. But does that translate into any of those things being the right way for you to make a living?

Deciding whether or not the transportation business is the right business for you is critical to your success once you do get into it. A lot of time and likely considerable expense goes into creating a thriving business of any magnitude. There may be a little bit of luck too, but if anyone tells you a lot of it is luck, don’t listen. A lot of the success in the transportation industry is from excellent, detailed planning and good old-fashioned hard work taking your plan from a concept on paper to a reality.

fun fact

Limousine drivers have great stories—and many of them can be found on the internet. Check out Lisa’s Limousine Stories (www.aclimos.ca). At www.thoughcatalog.com you can find 17 Limo Drivers Dish Out Their Best-Of, Craziest, Most Ridiculous Stories While on the Job. Thirteen more stories can be found at www.mandatory.com. Apparently if you start a limo business you will never lack stories to tell! But don’t forget to keep names to yourself . . . Want quick info on getting started? Check out www.entrepreneur.com/businessideas/limousine-service.

Test Yourself

One of the best ways to find out if a business fits your personality and lifestyle is to work in it for a while before plunging in and setting up your own shop. That may be harder if you already have a full-time job, but there are possibilities for part-time work. It can be insightful just to take a part-time temporary position during a particularly busy season for the segment of the industry you are interested in—driving limousines during prom season, for example—or pull a few weekend shifts in the scheduling office. Or use your free time to take passengers to their destination with a rideshare service like Uber or Lyft, using your own car. Plus you can earn a little extra cash while you are at it to add to the business startup piggy bank!

When you work in a similar job, or as you get started in planning your business, think about the following:

Do the typical hours mesh with your preferred lifestyle? If you are interested in starting a limousine service, do you need to be up late at night when being a night owl isn’t your usual style? Even if you aren’t doing the driving, if you are the boss you will need to be accessible in the event of a late-night call from a driver you employ.

If you have always been accustomed to taking off on a trip whenever the spirit moves you, you need to think about a business that will allow you to build it but not run the day-to-day operations.

Someone with a gregarious personality might not want to open a one-person business where you are by yourself all the time. Someone who is not fond of spontaneous interactions with strangers probably is not a good candidate to drive a taxi.

This is not to suggest that every possible aspect of the transportation business can be self-selected around your personal idiosyncrasies. But don’t set yourself up to get into a business type that is just going to make you regret your decision, dread going to work, or not feel like putting a 110 percent effort into your new business. That is a recipe for failure before you even begin.

Of course, all of this is moot if you have a business that can afford to hire employees to do everything you don’t particularly enjoy doing. But that is atypical of a startup business of any kind, which is more typically all hands on deck—including the owner’s—for a certain period of time.

warning

Don’t get a job to test the waters within the same market you plan to set up in. You don’t want an inside job spying on your potential competitors. While you will want to glean information about your competitors in your market research, your intention here is to get the inside experience to evaluate your interest in that aspect of the industry.

Small-Business Personality Traits

There are six traits that are conducive to small-business success according to a study by the Guardian Life Small Business Research Institute. These six traits are:

1.Being collaborative. Knowing when and how to delegate and motivate others on staff.

2.Curiosity. Having an interest in scouring the world for ways to improve their business.

3.Focusing on the future. Business owners that planned cash flow and succession planning did better.

4.Self-fulfilled. Those who would rather be in control of their own destiny than feeling secure in a corporate environment.

5.Tech-savvy. It’s here, it’s the world, use it to your advantage and make your business more efficient.

6.Action-oriented. Adversity actually makes strong business leaders work harder and motivates them.

One group (RingCentral) reporting on this study in a blog post actually pulled desire to delegate from the being collaborative trait and thought it was important enough to be a trait of its own. It is unlikely that any one person is strong in all these traits. But think them through and think about your own approach to any one of them. Then figure out how you might strengthen the ones you are weaker in, even if the solution is something like delegating tech-savvy to someone else!

tip

If your small business will have employees, now’s the time to start learning about leadership. A good leader allows both employee responsibility and creativity to encourage growth and new ideas (5 Leadership Lessons from Successful Small-Business Owners by Royale Scuderi, Open Forum, www.americanexpress.com).

Other Things to Consider

Any business category is unique, and the transportation business is no exception. A lot will depend on the type of business you plan to start in this far-reaching category, but in general there is a lot to consider.

The Pressure of Schedules

Transportation of goods and transport services is fully entangled with scheduling. Clients will expect to have themselves or their goods get from one place to the other on time. If you are shipping that just-in-time inventory of Christmas lights from a manufacturer in Indiana to dollar stores across the upper Midwest, the manufacturer won’t hire you again if the shipment gets there December 26 (or even August 26, for that matter). The point is, you agree to a schedule with your customer and you stick to it.

If you aren’t good at the scheduling itself, let alone being on time, this kind of pressure is going to keep you up all night every night, and you may not want to start a trucking business (not to mention if you are not able to schedule, you will not have customers). Or you may want to delegate that part of the business to someone for whom juggling schedules is a dream job come true.

Whatever you do, you need to figure out if you can handle the pressure that comes with schedules that must be met and if you have the organizational and planning to skills to ensure you have satisfied customers.

stat fact

According to the Census Bureau, women own 36 percent of all U.S. businesses, and of those, 89 percent have no employees.

On the Road Again

You may plan to actually be a driver in your transport business. Again, depending on what kind of transport business you start, you may find yourself on the road a lot. Make sure that suits not only your but your family’s lifestyle. This is the kind of thing that shouldn’t have to take you by surprise after setting up shop—you should be able to glean these details from your early investigations before ever starting a business. And when you do, think through how they will impact your life.

Some basic trends mentioned in the article Finding the Right Small Business for You from www.Bizfilings.com that are worth keeping in mind as you make decisions about your business are:

1.Both husbands and wives are wage earners in today’s market. This means that tasks that were once commonly performed by a stay-at-home wife/mom (like caring for aging parents, getting them to medical appointments, etc.) are often now delegated. Is this a service you can provide?

2.Outsourcing is popular in today’s businesses. Employees have been laid off and outsourced replacements brought in. Is there something in this trend that you can capitalize on? Being creative is the name of the game.

3.Is there a technological approach to your business? As a new business with no jobs behind you to show for success, perhaps you could have a virtual replica of how you pack the contents of a house into a moving van. Even technology is creative!

fun fact

The five best states for women-owned businesses, according to Thumbtack, are:

1.New Hampshire

2.Texas

3.Kansas

4.Oklahoma

5.Colorado

Choose the Right Business for You

In the online article Finding the Right Small Business for You, Bizfilings’ Business Owner’s Toolkit (www.bizfilings.com) offers the following three common mistakes that people make in choosing a business (and reasons that often result in business failure):

1.Not doing the right amount of market research on demand for a product or service that is currently your hobby that you think would make a good business

2.Not planning enough

3.Not asking for help

Don’t succumb to these pitfalls. There is plenty of information out there on small-business startups in general, on specific types of businesses, and certainly on all aspects of the transportation industry. Read everything you can get your hands on, call people, and network—then actually contact the people that come as a result of your networking, and ask for help from those who have been there and from the professionals who are in the business of helping small businesses.

warning

Don’t plan to sit around waiting for the phone to ring. Business owners at all times should be making business happen. Take the results of your networking and pick up the phone. Offer to move someone for the cost of gas in order to get experience and perhaps a testimonial. Be a rainmaker and make your business a success.

All Business Is Local

Don’t assume that just because your business does not rely on local customers you don’t need to interact with your local community. Any business will rely on local government and local politics when it comes to regulations, taxes, policies, and much more. For instance, if you are a long-haul trucking business you will likely need to take local roads to get to the highway. You will want to keep abreast of things like spring load posting limits (in northern climates when the soil is thawing, the heavy loads can damage the road surface) and if/when legislation arises to change those limits.

Attend chamber of commerce events and offer to host a business after hours if your office is large enough. Join the local Rotary Club and interact with business leaders who can bring business your way. If this kind of thing just doesn’t interest you, then you need to be sure to hire someone who can do this. Sponsor the local middle school Little League team, and show the community you care about the place in which you do business. And you want them to care about your business.

The Factory Model versus the Fruit Stand Model

George Horrigan, business planner and founder of Fountainhead Consulting Group, talks about the factory model versus the fruit stand model of growing a business. Almost all businesses start out in the fruit stand model where the owner is highly involved, opens the doors in the morning, and if the owner is not there the business does not make money. And some businesses are naturally in the fruit stand mode longer than others. But for those business owners with the goal of expanding or eventually having their business work for them, Horrigan encourages establishing your businesses with the intention of quickly moving to the factory model where the owner is dealing with the bigger-picture issues that lead to a thriving business and sets up processes where day-to-day business can be delegated to others. This is what Horrigan feels leads to a thriving business that is set up to grow from the beginning.

Your Final Answer

After thinking through all of these things about the business you are considering starting, do you still feel as good about the idea as before? Don’t ignore those nagging feelings—this is a huge life-changing step you are about to take! If something is bothering you about any aspect of what you thought you had decided for your niche in the transportation market, it doesn’t mean you have to think of something else—think through what it would take to address that particular thing. Enlist help if you need to, because there is always a workaround, even if you can’t come up with what it is yourself. Then you can begin to create your business knowing that you are headed in the right direction for you, your family, and your lifestyle.

stat fact

Each year, Thumbtack (an online service matchmaker) rates U.S. cities for their small-business friendliness. The five worst for 2015 were:

1.Hartford, CT

2.Albuquerque, NM

3.Buffalo, NY

4.New Haven, CT

5.Winston-Salem, NC

aha!

The most important question to answer when you are choosing a business model is How do I prefer to spend my day? Of course, everyone deals with things that they don’t particularly like to do, but your chosen business should, for the most part, let you spend your day the way you like best. Inside, outside, at a desk, on the road, on the phone creating business—whatever it is for you.

CHAPTER 3

Meet Your Mentors

There is no better way to learn the ins and outs of starting any small business than to talk with business owners who have done it—either successfully or not. In fact, sometimes those who have not been successful are the ones you can learn from the most!

The following transportation businesses are still in operation. You will see that their owners are passionate about what they do. They will occasionally be mentioned and quoted in other parts of this book. Therefore it seems appropriate that you meet them near the beginning of this book so when we encounter them later you’ll already be acquainted.

East Coast Equine Transport

(www.equine-transport.net)

Pat Thompson has had a horse or two in her backyard most of her life. When she built the house she still lives in, the barn was as important to her as the house. She boarded a few horses and got involved with showing. And she got to know a few people in the equine world.

In 1995, one of those people she met through the world of horse showing had a bad experience with an equine transporter. She asked Pat—who already had a good-sized horse trailer and truck because she herself was doing a lot of showing and had a reputation for topnotch care of her own and her boarders’ horses—if she would consider transporting her horse the next time she needed to get to a show grounds a distance away. And the rest, as they say, is history.

Pat started slowly. Her original trailer had living quarters, and she would do straight-through hauling. Now 20 years later she has abandoned that approach and does not allow her subcontractors to do it either. Because of the relationships she has built over the years drivers and horses can stay overnight at farms countrywide. She decided it was better for the horse and meant the drivers were fresher if they stopped for the night and stayed in stalls and hotels rather than on the rig. She picks places that show the quality of care that she believes in and has a nearby hotel and restaurants so they can be efficient in getting in in the evening and out the next morning.

East Coast has had subcontractors whose rigs hold more horses, but Pat has found that she can be competitive keeping her load to no more than four horses.

The more horses you need to fit in, the harder it is to build a load, she says, referring to the coordination that goes into getting one horse from New England to Texas, picking up a horse in Kentucky along the way that is headed to Florida, or whatever the configuration may be. Ever mindful of each horse’s well-being, Pat says that with a maximum of four horses there aren’t as many stops and side trips along the way, all four horses get to where they are going faster, and the horses aren’t being exposed to so many different horses from different parts of the country.

The big rigs, Pat says, hold up to 18 horses. That’s a lot of stops. In fact, one thing that keeps her rig on the road regularly is doing final legs of the trip for some of those big rigs that don’t want to come up into the Northeast. They might, for example, bring a horse from Colorado to Kentucky. East Coast meets the rig in Kentucky and brings the horse up to its final destination in New England.

East Coast will rent the whole trailer for a dedicated trip for just one horse. The way she sets up her pricing is that each of the four possible spaces in the trailer is rented at a fee. She can make a box stall out of two, and the horse owner can rent those two spaces. Therefore, there is no discount for more horses on the trailer. The horse owner pays for their slot (or two), and it’s up to Pat to build the rest of the load or determine it’s time to hit the road, depending on anyone’s timing for when the horse has to get where it’s going.

Pat has learned a lot along the way. I don’t worry about being competitive, she says. The work is out there. Maybe I am just not hungry enough anymore, but I set my rate and that’s what you pay. If it’s too high and you want to use someone else, that’s OK too.

Not only are many of