Sole Trader Haulage Companies – 4 Phases of Your Start-Up

Transport sole-traders with as little as a single vehicle and a hatful of ambition can be as important a start-up as the bold ventures of I.T. entrepreneurs.

However, motivation and enthusiasm need to be metered by caution in the face of risk. There are many ways to start a delivery or transport business, and, no matter how small-scale your operations, there are also myriad ways to succeed or fail. Yet, across the board, there are some clear commonalities to the phases such businesses go through in this start-up stage.

The Planning Phase

This may be short and fast or long and onerous. The shape of strategy-making need not be set a strict way to work, but fledgling haulage companies need to invest a little bit more time into planning. The key feature for most transportation businesses at this phase is the visualisation of a client base. Many sole-traders start out because they see an opportunity worth seizing; they come across a route that is untended or a market that is untapped. Yet seizing this opportunity only makes sense if you have the resources to make the revenue last. Planning therefore construes evaluating both financial and market opportunities in order to make sure risks and possible scenarios are not enough to make long-term operations unprofitable.

The Investment Phase

Getting into your vehicle and delivering your first load is a culmination of your planning. This phase involves the day-to-day practicalities of route management, client relations, and back-end logistics and can be both exhilarating and exhausting. For new haulage companies it is best to see this as an investment phase. This means the value of your operations and their sustainability is best measured in terms of your resources and how you can invest them. Knowing where to expend effort, time, and money in this phase is crucial to determining the shape of your future dividends.

The Returns Phase

When the money starts coming in it feels like growth is happening. The widening margin between expenses and revenue, no matter how slowly this widening may occur, is indicative of increasing success and a presence in the market. Even for haulage companies operating with one van and the same daily route, the balancing of the books and resultant profit makes this phase incredibly rewarding - it is a hallmark of success in the prior two phases. Yet it is important not to forgo the risk management, evaluation, and reinvestment that can occur in leaner times, because even at the early stages the long-term is the measure of the value of this phase.

The Consolidation Phase

Ideally, a long-term continuation of growth would be the goal of small haulage companies - yet the reality of a sole-trader is unpredictability. Such operators do not have the protection against market changes that larger groups do. As such, there is usually a consolidation phase - forced or decided, sooner or later. This can feel like a reduction in financial reward, but actually is a reality for which opportunities are present if they are planned for in advance. The choices of good debt, outsourcing, partnership, separation of personal and business assets, upskilling and vehicle maintenance are all crucial in this stage.

After these phases, from here on in, the market and long-term shape for a business becomes evident.

Norman Dulwich is a Correspondent for Haulage Exchange, the leading online trade network for the road transport industry in the UK and Europe. It provides services for matching haulage companies with jobs in road transport and haulage work in the domestic and international markets. Over 4,000 transport exchange businesses are networked together through their website, trading jobs and capacity in a safe 'wholesale' environment.