Quick Steps to Start a Profitable Logistics Company

Share to help others

Logistics business is probably one of the most lucrative businesses you can start in your country as corporations are in need of conveying goods, information and other materials from one point to another. Therefore, if you are considering starting a logistics business, it’s undoubtedly going to bring profits to you.

Logistics is simply the conveying of goods, services and even information from one point to another. In a general business sense, logistics ensures the proper management or control of the flow of these goods and services between the place of origin to the place where it meets the requirements and satisfaction of the consumers or organizations in need of the goods and services. The resources managed in logistics may include tangible goods such as materials, equipment, and supplies, as well as food and other consumable goods. This conveyance is done with vehicles, cargo, trucks, airplane, motorbikes etc.

There are several logistics companies in Nigeria that carry out various deliveries from one destination to another; we have DHL, GIG logistics, ocean logistics, courier plus services limited and so on. The logistics industry is a highly competitive market, and great opportunities abound in the industry.

Why You Should Start a Logistics Company

If you’re considering investing in logistics, then now could be a good time. There have been various changes in the past few years, with new companies cropping up and existing ones growing. Still, if you’re on the fence, consider these few reasons to invest in logistics:

1. Consistent Market

Despite the ever-growing ecommerce market and changing consumer landscape many expert investors are predicting logistics companies will be around for a long time yet. Even though technology has taken over a lot of sectors, leading to some industries to struggle, the logistics industry has remained relatively consistent. It looks like it should be fairly stable in the future as well, with consumers continuing to order online and rely on courier and delivery companies. Plus, with a more connected world, a lot of businesses are relying on logistics companies to help get their products out further afield and import from abroad.

2. Innovative Opportunities

Given that the logistics industry already possesses a lot of well-established and high quality companies, new firms will have to innovate to be successful. There are plenty of opportunities to do this and specialize within the sector, especially due to the continuing rise and impact of technology. This provides great investment opportunities, with traders able to back new and exciting young logistics companies and make a financial gain. While established logistics firms such as TNT have to come up with fresh ideas or simply ensure a top service is delivered, as with their specialized document courier service.

3. Increasing Demand

The increasing distribution demand, mainly due to ecommerce companies, is leading to a boom in logistics investment. Retailers have been struggling to keep pace with consumers more specific needs, whether it is for even quicker deliveries or a more flexible approach, such as being able to pick orders up from locations other than their home. Evolving supply chains have proven incredibly helpful for logistics companies, with distribution centers expanding their options. There is a higher demand on both the consumer and business’ end that, unless the internet boom unexpectedly disappears, looks set to continue and keep up the logistics industry’s high value, providing great investment opportunities.

Read Also:  Easy Guide For Producing Liquid Soaps For Sale - Business Idea

Follow These Steps to Start a Logistics Company

At this point let’s outline some important steps which you need to take to start a logistics company.

1. Get adequate knowledge of the business

Getting an in depth knowledge of this business will give you some edge in the business. Before you start up your own logistics company, it is important that you acquire maximum knowledge in the sector.  You can gain useful knowledge in the business through books and online research. Carry out a feasibility study about it. You can get attached to a logistics company, so you can gain rich experience and understand the rudiments of the business. Also, working in the field of logistics will help you to establish useful relationship with some companies that may represent future clients and you could possibly be mentored by experts in the company.

2. Acquire sufficient capital

Just like every other business, logistics business is a venture that requires sizable startup capital. Funding logistics business will also depend so much on the services that you wish to start with. It is important in logistic business to identify the services niche that you wish to target and prepare a business plan based on it. You can obtain loans from commercial banks or get a partner or an investor to put up the business. In order to do so, you will need to draw up a perfectly written business plan which must be able to convince potential investors that the business can be very profitable and successful.

3. Develop a business plan

It is necessary to put down a business plan before fully launching into the business. A business plan will help you have a strategic financial budget. So put up a budget for your intended business by drawing out a business plan, sort out costs for; acquiring equipment, power supply, marketing, rent, cost of registering the business, cost of salaries for about one year and so on. Make sure that all these costs are able to cover the period it will take for the business to break even.

This business plan helps you to be detailed about the necessities required, it also uncover areas of the business you may have overlooked. It will also help you map out the details of how you would secure funding for your start up needs.

Read Also:  6 Quick Steps to Start a Haulage Business

4. Get required licenses and permits

As a business, you will need a variety of licenses and permits. The requirements for obtaining a license vary by state. However, there are some general rules that can help you determine the right license for your business. Some states do require a business permit or tax permit to enable any business entity operate legally. These permits are important both in the state and local government level depending on the terrain or location. And before these permits are issued you must have registered the business under corporate affairs commission. Depending on your state’s regulations, your business may need a federal tax identification number. It’s necessary to also employ the services of a legal firm throughout the process to ensure you are doing the right thing.

5. Purchase required equipment

Prior to acquiring equipment you need to identify the level at which you would be able to operate at the startup of the business, this is because in running a logistics business one could begin from any level depending on your business plan and finances. One could operate using vehicles or motorcycle, Intra or interstate transportation. You could also start as an agent, acting as a middleman between the transporter and the industry that needs the transport services. As an agent, you do not need to buy a vehicle for your operation; your commission would be gotten from an agreed percentage from the freight fee. Also starting as a contractor is another level.  Once you receive the contract you can contract a transporter.  Starting up as an agent, contractor and transporter is also possible depending on your capacity and fund available, the major thing you need at these levels is a vehicle and driver’s license.  If at the start of the business you can’t afford a new vehicle it is advisable to get a fairly used vehicle or rent one until your business begins to turn in profit.

6. You need an office

It is paramount to have an accessible office to gain the trust of potential clients. In getting a physical office for your company do not compromise on the image and reputation you intend to build for your business. In addition, the security of the area should be considered when securing an office space which could also serve as a warehouse for products before it gets to the owners.

7. Insure the company

Insurance enables mitigation of losses, and it plays a crucial role in the sustainable growth of the business. For instance, in cases of accidents where your company’s truck full of products gets involved in an accident that resulted to the loss of the products, your logistics company will be responsible for paying back the cash worth of the damaged products. One way to reduce the risks involved is by getting an insurance cover for your logistics company that will cover both foreseen and unforeseen damage and loss in the future. The insurance premium may be expensive but it will save you a lot of expenses and court matters in future. The insurance premium may be expensive but it will save you a lot of expenses and reduce uncertainties in the business.

Read Also:  How To Set Up A Profitable Dropshipping Business In Nigeria - Detailed Guide

8. Study the competition

Competition exists in every business, so it is essential for you to maintain your position in the market and stay ahead of your competitors. To beat your competition, one major thing that helps is improving on your customer services and by ensuring prompt delivery of products. Your services will automatically start to sell more the moment you fill the gap your competitors left void. Your personnel should be properly trained and transitioned into each position they work on so as to enable them work efficiently to beat your competitors.

9. Publicize your business

You need to let people know about your business through targeted and deliberate business promotion and marketing. There are various ways by which your organization can be advertised. You can create a website; the site should contain all the necessary information for prospective clients. Having business cards is another mode of advertising. Having your business card where ever you go is important for easy distribution to prospective clients that you meet.


Recent findings has predicted that the post COVID-19  global logistics market size is projected to grow from USD 2,734 billion in 2020 to USD 3,215 billion by 2021.    And the Government has envisioned it to be a sector that cannot be overlooked.  The world is changing rapidly, supply chain increasing day by day and young Entrepreneurs are putting up all strings to make full use of these opportunities. If you are still thinking about starting up a logistics business, waste no more time.

NB: Do well to join our Telegram group to relate with thousands of like-minded people about investment, business and money matters. Just click our Telegram group link after installing the telegram app on your mobile device. You can download the telegram app from Google Play store to your phone.

You can also follow us on Facebook,  Twitter or  Instagram for frequent updates with vital information on entrepreneurship, business, investing, inspiration and wealth creation from time to time.




Share to help others

Leave a Reply

Your email address will not be published. Required fields are marked *