The world is constantly changing. And with the ever-developing world comes in various new business ideas that are welcomed by the economies of the nation. Logistics plays a crucial role in the success of any new business plan because logistics plan, implement and control and storage and flow of goods and services to meet the growing needs of the customers.
The Indian logistics industry
The Indian economy has grown massively in the past few years. The success of any business can be directly related to its logistic management. Over 50 million people across India are employed under logistics. This has turned logistics itself into a lucrative business idea that many companies have been relying on these days. Making a successful entry into this business depends entirely upon the homework you do and how effectively you execute your plans from day one. Let us look at the different aspects (such as the e-way bill generate) and requirements you will need to enter the transport business.
- Define your business
To start off you need to decide on the type of service you will provide. Typically, the transport business can be classified into four categories: Courier and Freight Cargo, Air Cargo, Warehousing, and Third-Party Logistics. Each of these cases requires different starting capitals. Are you going for a new venture, or will you be working with an existing company? Decide on the market and approach you will take.
- Vehicle – New or Second hand
With a trade-off between servicing quality and pricing, making an informed choice will become the crux of success for your transport business. If you are low on capital, you can choose a second-hand vehicle. But then you will not get access to assured manufacturer’s service and full warranty on your vehicle. On the other hand, a new vehicle will require large amounts of capital.
- Initial Financing
You will need to establish the source of your capital. It can be through investors or loans, or other means. Do your homework and understand the options for paying up for the vehicles. For instance, Instalment sales require a deposit and lets you buy the vehicle in installments, while lease/rental agreements do not require upfront payment, but ownership remains with the lessee.
- Costing plan
Next comes costs associated with operating costs (tolls, license, e-way bills) and maintenance (fuel, maintenance, location, security features). Don’t forget to include the salaries you are going to be paying to your drivers. How are you going to cover these? Are you going to use your revenue, or allocate capital separately?
Before you jump the gun and get your wheels rolling, it is critical to understand what your customer wants and if the job is actually worth it. Even though the business is in getting around from one point to another and business is scarce in the initial days, if the journey does not pay up properly, it will be a cost that you will have to pay from your own pockets. Not every opportunity is a good opportunity.
This part is probably the most important for your transport business. Drivers are going to be the point of contact between you and your customers. A well-trained professional staff goes a long way to building a good brand image. They must have the required licenses and must be experienced with your type of vehicle, to avoid any problems in the future. A poorly staffed driver will set the bar low in terms of quality of deliverance. Increasing your reliability will ultimately get you more customers, more business, and have you added in the books of other logistic companies.
- Registrations and Compliance
In order to start any business, certain registrations and compliances from the government have to be met and completed. A business in logistics also requires certain compliances and registrations from the government of India.
For instance, getting registered with associations such as the Air Cargo Agent Association of India (ACAAI) and the International Air Transport Association (IATA) is essential and useful for using freights. Similarly, familiarising yourself with e-way bills, how are e-way bills generated, GST registrations, DGFT registration, Registrar of Companies, Income Tax Department, etc. is critical for your ability to operate a transport business.
Eway bill is an Electronic Way Bill required for the movement of goods. E-way bill’s generated when a GST registered entity wishes to transport goods in a vehicle whose value exceeds Rs. 50,000.
Being aware and informed is the most important factor while starting any kind of business. Now that you have a primer on logistics business, you can go ahead and start taking actual steps.
Finserv MARKETS can be of great help in this process not just with its business loans, but also with guidance on crucial elements such as the E-way bill. You can visit our website to find out everything about an E-way bill, right from registration to login process.
Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.