Do you want to know how to start a transportation business with one van? It is possible! As a beginner, you just need one van to launch a business. No need to be concerned about limited investment or no experience, and here’s how.
With this detailed guide, you will learn to set up a profitable transportation business with only one van to get your start-up off the ground.
Since starting a new business involves a detailed process, we will walk you through the essential steps you need to follow to make money. First, let’s address some basic points to clarify this venture you will be getting into and what it requires.
What Is A Transportation Business?
The term transportation business is a broad term used to address various categories. Nowadays, modern transportation businesses range from personal dispatch services to storage or carrier services to large-scale carriage operations.
If you’re interested in starting a transportation business, you have plenty of options. Usually, small-scale transportation operations involve the delivery of goods, freight, or people from one place to another and charge a specific fee for it. So, even if you have funds just enough to cover the cost of one van, it is possible to have a transportation business of your own up and running in no time.
Most large-scale transportation companies started as small set-ups and eventually grew over time to become massive businesses today.
There are two ways to start a transportation business: you could transport people or deliver goods.
In the following sections, we will be discussing what factors you need to consider for the business and what steps you need to take to get started in the right direction.
How Much Does It Cost To Start A Transportation Business With One Van?
Many people fail to set up a successful business venture because they start without knowing what the process entails. As a consequence, they are unable to conduct a feasibility analysis.
Like any other business, if you want to succeed, the first thing you need to do is to plan and prepare appropriately to identify and overcome any possible obstacle.
Financial planning is the most vital aspect of starting a business venture. In this case, your most significant expense will be the van required for the transportation business.
As suggested earlier, you can build a business transporting people or moving goods. If you want to provide transport service to people, you will require a passenger van. However, if you will be delivering goods, you need a cargo van.
If you already have a van, you may not need plenty of funds for the business. Otherwise, you will need to lease or buy a van, for which you will need finance. However, if you do not want to take financial aid or apply for a loan, you can consider renting a van or buying a used one since it will cost much less than a new one.
While a new cargo van costs around $25K-$30K, you can buy a secondhand at as low as $2.5K-$3K. Similarly, a new van for passenger transport may easily cost $28K-$40K, while a used van may cost $2K-$3K.
It is important not to take on too much cost burden at the start of the business, and there are a few ways you can minimize your costs. For instance, since your major expense is acquiring a van, you can consider leasing one, and it will significantly reduce your initial expenses.
Other business aspects that make up your start-up costs include:
- Fuel expense
- Marketing for the business
- Necessary equipment according to the type of service you want to provide
- Acquiring a license for the business
- Getting the vehicle insured
Is A Transportation Business Profitable?
While some transportation business sectors may have slowed down over the last years, many parts also picked up the pace. As businesses and consumers alike related more on deliveries for access to products, the transportation business has increased more than 70% during this time.
All in all, even a small-scale transportation business can be successful. In the United States, van owner-operators earn around $47 per hour, amounting to around $99K annually. That is significantly higher than the median income and enables you to have a comfortable lifestyle.
While these figures are intended to give you an idea, your actual income would depend on the nature of your transportation business, the amount of work you do, and how you market your business to expand it further.
If you’re working on this only as a side hustleit makes sense that you would spend less time on it compared to when you’re working 8 hours a day.
8 Steps To Start A Transportation Business With One Van
Now that we have the preliminary sorted out, let’s look at the key steps you need to follow when starting a business in the transportation industry with a single van.
1. Do Your Research
Before proceeding with your entrepreneurial venture, you first need to conduct market research and gain valuable insights into your target market. Consider the ongoing trends to assess the nature and volume of local demand.
Researching the local competition in your area as well as the current market rates will also give you a better idea about competitive advantage and pricing.
The initial research will help you determine the line of work you would focus on and the nature of competition you will face when you enter that market. This information is the seed for your feasibility study and business plan.
Your market research will also determine whether you’re going to earn $60,000 a year or you’re going to make closer to that 6 figure income you’ve been working on.
2. Select A Niche
Since there are multiple specializations you can do in transportation, you need to select your niche or your area of focus. This choice will depend not only on your market insights but also on your preferences, goals, and interests as an entrepreneur. Ask yourself: who are my potential customers?
Here are a few transportation business ideas.
You can work as a food delivery service for restaurants, or for food or catering companies. You can also collaborate with online food delivery portals like Uber Eats, DoorDashgold postmates. You may read our full DoorDash review and Postmates vs. DoorDash to know more about the platforms.
Services for Schools, Colleges, Or Offices
If you’re interested in providing transportation services to people, you can offer your services to schools, colleges, and even offices.
You will have to come up with an attractive offer with reasonable pricing that will appeal to the institution’s administrative bodies. The key would be to develop a pricing model that will appeal to potential clients.
Relocation services are pretty profitable. Your potential clients will be individuals who relocate for personal or professional reasons. You can offer your services as movers and packers. However, remember that you will need to hire employees who will assist in packing and moving.
How about starting an independent cab service? Alternatively, you can work with a cab service like Uber.
Services for E-commerce Companies
E-Commerce companies are flourishing in current times, and they need transportation services as a crucial part of their business model. As a business, this situation is an excellent opportunity for you to provide delivery services to these companies, moving their goods from the origin to the designated destination.
Medical Transportation Services
Your van can either be put to work as an ambulance service to transport patients to and from hospitals or to transport medical equipment and supplies.
3. Choose The Right Vehicle
Once you have determined which niche you want to work in, the next step is to choose the kind of vehicle you will need for the job.
If you choose to work for a moving company, you will require a heavy-duty vehicle. However, if you want to provide transportation services to an educational institute or an office, you will need a bus or a passenger van.
4. Arrange Your Finances
The next critical step is to arrange the requisite funds for your chosen line of business. You will be saved from incurring the most significant expenditure if you already own a vehicle. If needed, you might have to pay for minor repairs or conversions to make your current vehicle more suitable for your niche.
But if you do not have your own vehicle yet, you can just lease a single van.
If you prefer owning a van, you can request a business loan from a financial institution to finance the purchase or pay for conversion costs (if any). You will need to assess your circumstances and weigh the relevant factors to determine what suits you.
5. Get The Correct Licenses and Permits
The next step is registering your business and doing the paperwork. Get the right permits and business licensing according to the nature of the transportation service you choose to provide.
First, you need to acquire a business license and certificate of incorporation before you begin operations. Then, you will need a commercial driver’s license, and if you are considering hiring a driver for the purpose, you will need to ensure that they have a valid driver’s license.
Additionally, you will need to get a carriage permit whether you want to provide passenger or goods transportation services. The requisite licenses are subject to renewal every few years, and you will have to stay at the top of things.
6. Get an Insurance
Another important consideration is insurance coverage for the vehicle. If you want to work in a goods transportation business, you will need insurance cover for the goods you will transport while conducting business.
7. Promote Your Business
If your potential clients are not aware of your business, they will not engage with you. You need to consider the marketing tools to promote your business and build your reputation as a transportation provider.
Online marketing is effective and economical, and it will help you have a wider outreach. You can also consider getting business cards or vinyl stickers printed with essential details for people to reach out to you.
8. Get Started
You have your van, and you have gotten your business registered and processed all the legal documentation. You are also marketing your business which will help you acquire customers. If you choose to provide goods transportation services, you can reach out to local businesses, including wholesalers or retailers.
Similarly, if you want to offer passenger transport service, you can pitch your service proposal to the relevant institution to get started. Remember to leave your contact details where you can be reached easily and make follow-up calls after initial contact.
If you manage your business well, offer efficient services, consider and incorporate customer feedback, and keep your clients happy, you have all you need to have a flourishing business.
Conclusion – How to Start a Transportation Business With One Van
There is no 100% guarantee for success when you start a business. Most large-scale businesses started small and grew over time, which is also true for the transport business. With more experience and capital influx, they were able to expand and become successful.
It took an idea, a drive to do something and take a risk.
Take a look at the current transportation industry: someone must have taken the risk to buy or lease that first truck, bus, or boat to start moving goods or people. No matter how humble their beginnings were, they have become successful today and have grown in size manifold.
That someone could be you, too! Maybe you just needed this article to give you a push into learning how to start a transportation business with one van. So, rev up your engine, take the wheel, and drive while keeping your eye on the road to your success!
Marjolein is a financial consultant who has built over €4,000 monthly passive income and saves over 70% of her income. Read Radicals’ inspiring story, from stuck in the 9-to-5 to loving life. Feel free to send Radical a message at the bottom of this page