Starting a drayage company is an exciting and profitable challenge. There are multiple factors to consider when launching this business and we recognize the detailed attention that must go into the startup. As such, we’ve included in this article 6 steps to indicate how to start a drayage company and the business plan that accompanies it. Let’s get started!
Table of Contents
Step 1: Analyze the Customers.
If you are planning to build a successful company, you’ll want to first consider knowing, in general, who your customers might be. Are they manufacturers, freight forwarders, distribution center personnel or train schedulers involved in the ship-to-shore or shore-to-ship process? A drayage company is a specialty service designed to carry goods short distances within a certain timeframe while carrying out specific instructions for placement of goods.
If possible, outline your potential customers and their preferences for services. Will you have enough customers to create a profitable company? These questions are always germane to your startup considerations.
Step 2: Research the Competitors.
Within the drayage business, there are multiple services available and, in your geographical region you may have several competitors. It is crucial to research your competitors to determine the pricing they offer, any added value services they provide, unique factors about their business, any customer reviews or complaints noted publicly, and how many estimated customers they have. This information can be used by your company to overcome any offers of other drayage services to win new clients.
Step 3: Create a Mission Statement and Objectives.
Although this may not sound as if it is important, the truth is that you’ll refer to your business plan often in the coming years and these initial statements will define the growth of your company. Write out the “why” behind starting this company. Are you hoping to grow personal wealth? Will you use the profits to fund additional drayage service locations in a chain along the coastline?
In addition to your mission statement, write out your objectives for your company. What do you want to accomplish in one year? How much revenue will you want to see in year 5? How many customers will you have in 6 months? Again, asking yourself such questions provides a baseline for your goals and acts as a benchmark for future years.
Step 4: Build a Business Plan
Your business plan is an overview of your complete company, detailed within one document. Inside the plan, sections will include your analysis of customers and competitors, your mission statement and objectives, an operational plan, administrative functions, financial forecasts and effective marketing strategies. Each of these sections will together form the basis for your business. The completed business plan can be used as a presentation to lenders or investors, financial institutions or other entities for funding purposes.
Step 5: Design a Strategic Financial Model
Because you’ve outlined the structure for your business plan, you will want to form a financial model, as well. A financial model assists in the development of your concepts and ideas during formation, identifies certain risks, and outlines whether you are in the right place to expand your business. Create a budget for anticipated expenses, choose pricing models for the services your company provides and estimate the startup capital your company may need.
Step 6: Develop a Solid Marketing Strategy
In the drayage business, developing effective marketing strategies is essential for the growth of your company and long-term success. Differentiation from your competitors will be a key in the drayage company; the service is popular and the practice is well-known. How can you differentiate in this environment? First, you will want to develop a significant website with a developer and designer. Include important links that your clients can find, such as “Order Services” and “Call for Service”. These links need to be seamlessly linked to the pages needed so clients can book services or contact your company immediately for expedited service.
Use your website as an advertisement billboard, containing everything customers will want to know about your services and quality of care for the freight handled. Add pages that answer the most common questions and add a list of “value added” choices if customers would like to select packages or bundled services. This is the best way to add differentiation to your customers and it is far more effective than lowering prices to beat the “other guy.”
In all of these areas, your company can shine. By placing your mission statement and objectives in the business plan, along with the additional sections of marketing, financial forecasting, analysis of customers and competition, you have positioned your drayage company to thrive and succeed for years to come.