With nearly 36.5 kilometers of roads being constructed in India every day, there is an increasing demand for efficient road transport across the nation. Today, the rapidly expanding roadways network in India provides a great opportunity for new entrepreneurs to invest in transport businesses. Transport businesses majorly include running taxis, auto-rickshaws, on-demand cabs, and commercial vehicles for intra-city and inter-state goods transport. With the demand for transport services rising by 10% annually, the transport business market is ripe for new entrepreneurs.
Below, we will look at the basic steps towards creating a transport business plan and the various kinds of transport businesses that one can set up.
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Creating a Transport Business Plan in April 2023
- Choosing a Transport Business: Transport businesses can be broadly categorized into passenger transport and goods transport businesses. Passenger transport includes taxis and other commercial vehicles that are used to ply passengers and goods within villages, towns, and also between different cities and states. Freight or goods transport can also be within regional geographical locales or across cities and countries. Unlike passenger transport, goods or freight transport carries raw materials and ready-made goods for consumption, retail business or industries
- Getting to know the Business: Like any other business enterprise, one needs to conduct research to understand the feasibility and profitability of a business enterprise. Since this may vary regionally, one will need to understand the specification of the transport business market in the regions that one wants to operate in. This will include the fleet of vehicles that a business owner will have to invest in, the loan schemes available for setting up such a business, important and popular routes, and making business connections with already successful entrepreneurs in the transport business
- Registering the Transport Business: To set up any kind of transport business, one will require legitimate licenses for the transport personnel and vehicles that are registered for business purposes. Legitimate licenses are mandatory for the setting up and management of a transport business
- Investing in Transport Vehicles: While this may seem an obvious step, this needs meticulous research if the business has to succeed. While the first criteria of choice will be based on the nature of the business i.e. whether passenger or goods transport, one will further need to choose the appropriate kind of vehicles that will be practicable for the given context
- Insurance and Tracking Devices for Transport Vehicles: In the case of both vehicles for personal use or for business, vehicle insurance is mandatory. Today, however, there are also various tracking devices that can in fact prevent theft or help in the retrieval of stolen vehicles. Especially in the case of goods transport vehicles, one can also avail of extra insurance for goods that are being transported
Organizing the Business Team:
- Drivers: For passenger or freight transport businesses, the primary personnel is the drivers. All drivers need to be above 18 years with legitimate licenses and adequate driving experience supplemented by on-the-job training. In the case of freight transport, truck drivers should possess a commercial license for large vehicles
- Customer Care Executives and Accountants: Like any business, a professional customer care department is important for an efficient and smoothly operating transport business. The business will also need a good accounts team that can efficiently manage income and expenditure balances
- Advertising the Company: Over and above the necessary logistics and research in order to set up a transport business, one of the most important components of setting up a successful transport business is a strong advertising campaign to promote the business
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Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs – April 2023
|Axis Bank||14.95% - 19.20% p.a.||Apply Now|
|Bajaj Finserv||9.75% - 30% p.a.||Apply Now|
|Flexiloans||1% per month onwards||Apply Now|
|HDB Financial Services Ltd.||Up to 36% p.a.||Apply Now|
|HDFC Bank||10% - 22.50% p.a.||Apply Now|
|IDFC First Bank||10.50% p.a. onwards||Apply Now|
|Indifi||1.50% per month onwards||Apply Now|
|Kotak Mahindra Bank||16% - 26% p.a.||Apply Now|
|Lendingkart||12% - 27% p.a.||Apply Now|
|Mcapital||2% per month onwards||Apply Now|
|NeoGrowth Finance||19% - 24% p.a.||Apply Now|
|Tata Capital||12% p.a. onwards||Apply Now|
|UGRO Capital||14.90% p.a.||Apply Now|
Note: Business loan interest rates are updated as on April 2023.
Transport Business Options
In rural and urban India, there exists a complex system of public and private transport services constituted of a variety of motor vehicles such as auto-rickshaws, taxis, buses, and trucks catering to a wide demographic. These systems are distributed across a range of services such as public transport, on-demand conveyance, freight transport, and healthcare. Below are some of the transport services and transport business options that new entrepreneurs can invest in,
- Taxi Service: Taxi service is one of the most lucrative transport business options these days. While a large portion of this market has been captured by ride-hailing and ride-sharing businesses like Ola and Uber, a large population continues to use private taxi services for intra-city, inter-city, and inter-state travel. With fast-expanding digital networks creating large data networks between entrepreneurs and consumers, a taxi business can be a highly profitable enterprise.
- Bicycle Rental: While motor vehicles provide quickness, they are also environmentally unsustainable. With increasing awareness regarding ecological sustainability, many people today seek to use modes of transport that are less polluting and also offer the chance towards a healthier lifestyle. Owing to this, one can also consider bicycle rental services as a viable and profitable transport business alternative.
- Freight and Logistics Services: Freight transport is possibly one of the oldest transport services and has changed only in form, owing to better motor vehicle technology and larger digital networks. Since it was and continues to remain absolutely necessary for a variety of business enterprises, freight transport services are one of the most profit-making transport business options.
- Specialty Transportation: Specialty transportation can be considered as a subset of freight or goods transport where one can devise specialized transport services for specific industry needs such as the transport of huge industrial machines, large mechanical components such as airplane parts, windmills, etc. It also includes other specialized services such as modular houses, perishable frozen items, human organs, etc.
- Livestock Transportation: Livestock is a primary component of many manufacturing industries and forms an important part of the supply chain for these enterprises. Livestock is also more vulnerable than other kinds of goods and this demands specialized kinds of transport services that can be tapped into by new entrepreneurs in the transport business.
- Healthcare Transportation: Healthcare transportation can include ambulance services for medical emergencies and emergency services for road accidents etc.
Logistics and transport business requires a lot of investment and to carry out that investment business owners should be well aware of all the necessary information required to start a new business. Therefore, it is highly recommended to frame a detailed transport business plan to make a base for your business to further grow and flourish.
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