Business Planning
Essentials Of A Transport Business Plan

Essentials Of A Transport Business Plan

Transportation is key for people and objects to move from one place to another and is an indispensable service for most businesses. Transportation links people to places. Transportation helps people to commute and travel with ease, whether it is from one city to another via road transport, within the country by rail transport, to other countries via air transport and even across the oceans via water transportation services. People and places have come closer to each other owing to efficient transportation services which are continuing to improve. Every business needs transport to deliver finished goods and products. A manufacturing business relies on transportation to obtain raw materials and to send finished products to retail markets anywhere in the country or even the world. In fact, even service-related businesses have to consider the transportation of their employees and for their basic essential supplies. It won’t be wrong to say that there is hardly any business that does not require transportation services. Thus, if you are wondering about how to start a transportation business, you are in the right place.

Why Is Transportation Vital?

Transportation has helped and brought about a change in everyone’s life as well as every business by impacting trade, travel and exchange. Transportation is thus a very vital component which is needed for every business. Transportation has contributed significantly to the development of social, political and cultural fields and also has impacted the economy of the country as well. 

Some of the factors where transportation has contributed and which leads to its significance include-

Economic Development

Transportation has led to the economic development of the country. An efficient transportation system helps to supply products and goods to every corner of the country and increases the connectivity. In the absence of development of transportation, it would not be possible for products and therefore businesses to reach nooks and crannies of the country. In the absence of transportation, the market would be limited in local areas and production would be limited to meet local needs only. As a result, the economy of the country would remain in an undeveloped condition.

Industrial Development

Speedy industrialization has been possible owing to the development of transportation. Without the development of transportation, neither mass production nor distribution is possible. Transportation thus helps industries set up faster and also helps them procure materials as well as deliver finished goods quickly and to distant locations too.

Agricultural Development

Transportation plays a key role in agriculture. Agriculture is one of the chief occupations of the country which is indispensable. It is , therefore, necessary to promote the transport system for the proper development of the agricultural sector and rural areas as well. 

Stabilisation Of Prices

Transportation helps stabilize the prices of goods as it brings about a coordination between the demand and supply of different products. In the absence of proper transportation, producers can monopolize the items that are scarce but are in demand and lead to overpricing. Transportation leads to stabilising of the prices and encourages healthy competition among the various producers and prevents them exploiting the customers.

Mobility of Labour

Transportation is not just about moving goods from one place to another but it also helps in the mobility and movement of labour from the place of surplus to the place where labour is scarce and is needed. In this manner, transportation helps provide a means of employment to the labour and also speeds up the industrial development.

A business in transportation is therefore not just a profitable venture, but a way of contributing towards the development of industries and the nation in general. 

transport business plan

Transport Business Plan

Since transportation is so vital, a business in transportation and logistics is equally vital and thus requires thorough planning. Logistics refers to the detailed process of organization and implementation of a complex operation, whereby the flow of objects (goods) from the point of origin to the point of consumption is managed such that the acquiring, storage and transportation of goods to the final destination is part of the duty of the transportation business itself.

The initial step while starting the business is to plan the business using the business plan tools. A transport business plan includes deciding what products or services the business owner would like to offer, the place where he would like to start the business, analysing the competition, estimating demand and creating the financial model.


transport business plan


Business Plan Essentials

 A transport business plan is the first step towards a successful enterprise and consists of certain essentials such as-

  • Business Identification

This includes including information in the plan regarding the actual business activity, for instance whether the business will operate solely at a manufacturing location for delivery of finished goods or will supply raw materials to production site or will ferry employees to and fro from their workplaces or will make door to door deliveries (such as those provided for e-commerce websites) or will deliver to the market place or will operate across State borders or within the city or State. All these details regarding the actual business plan and activity need to be included along with details regarding the vision and mission statement of the business, the place of business (proposed or actual), funds required for the business, the type of business entity, supporting members of the business, etc.

  • Study Of The Competition

The competition must be identified while chalking the transport business plan and details regarding their marketing and trend analysis, marketing strategies, services being offered, pricing of the services, etc. must be included in the plan. The strengths and weaknesses of the competitors and their business strategies must be analysed and compared with that of the businesses own.

  • Estimate Of The Capital Expenditure

The funds and expenditure needed to start and set up the business is termed as the capital expenditure. Thetransport business plan must include details of the capital expenditure including estimates for the capital needed to start the business, to make space deposits and for the purchase of equipment, machines, furniture, etc.

  • Procuring Of Funds

A business needs funds and financing at every step of the way. Funds are needed while starting the business (to make payments for the new premises, to purchase equipment and for advertising), while running the business (for day to day expenses, to maintain inventory and supplies and miscellaneous costs), and while growing the business (to expand the business, for bigger premises, additional equipment, setting up the business or a branch of it in a location).

All these expenses and the funds required can be sourced from-

  • Banks in the form of loans
  • Non banking or independent financial companies or institutions in the form of loans
  • Loans and borrowings from family and friends
  • Investment from own savings

Along with these essential details a detailed cash flow statement must be included to understand the needs of the business presently and in the future. Also, future revenue projections and a summary to conclude the entire transport business plan are musts that need to be included in the business plan.

Additionally, apart from these basic essentials that every business plan must include, the business owners must consider the mandatory registrations and licences that the business will require (such as business entity registration, GST registration, permits for the vehicles etc.). Insurance is equally important for a business and must be considered while planning and starting a business, in the case of the transportation business, it will be insurance of the vehicles and maybe of the goods to be ferried. 

Documents Required With A Transport Business Plan

A business plan for transportation company requires essential documents to be submitted along with it. These documents include-

  • KYC documents – PAN card, Adhar Card
  • Address Proof- in case of own property- Index-II and in case of rental property- light bill & rent agreement
  • Quotation of machinery, equipment, furniture & other assets to be purchased
  • Passport size photographs of the applicant
  •  ITR/ form 16A- mandatory for existing business
  • 6 months bank statement
  • ShopAct/ gram panchayat NOC
  • Business-specific license
  • Work orders

A transport business plan is important as it-

  • Helps to structure and streamline the business
  • Validates the assumption regarding the business
  • Helps determine if there is a need for the business
  • Helps correct any loop holes in the business plan
  • Helps save time when actually setting up the business
  • Acts as a thorough document that can be used to secure funding 
  • Helps to address issues of the funding institutions while applying for loans
  • Provides an understanding of how the business will be in the future
  • Acts as a benchmark to judge if the business is reaching its projected goals

A business plan is the first vital step while setting up and starting a business and deserves dedicated time to create it and any barriers faced while creating it can be solved by the team at deAsra. After all, a business plan  is the framework for the enterprise! 

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