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How to start a logistics business in India: A step-by-step guide

  • Highlights

  • Choose between 3PL, 2PL or simple transport services

  • Create a practical logistics business plan

  • Build your fleet and buy software & machinery

  • Avail a Bajaj Finserv Business Loan to start a logistics business

The 3PL industry in India is all set to touch Rs.58,000 crore in 2019-20, at a CAGR of 19-20%, as per Mahindra Logistics in an Economic Times report. An inherent reason for growth in this sector is that it is the foundation of umpteen businesses in the country, most importantly, e-commerce stores. However, while the market looks attractive, setting up a logistics business in India is no easy task. Even though logistics companies form a vital link between sellers and consumers, efficiency is of the essence. Therefore, as a businessperson seeking to setup a firm, what’s important is that you first step back and chalk out a logistics business plan that will work.

What’s great is that once you draw out a workable logistics business plan, you can optimise it for efficiency in storing, tracking and delivery by availing capital via the Bajaj Finserv Business Loan for Service Enterprises. This loan gives you financing of up to Rs.30 lakh without collateral and thus makes for a stress-free funding solution. With financing at your fingertips, all you need to do is have a clear vision for your venture. As you begin, prime yourself with this 5-step guide on how to start a logistics business in India with ideas on new business opportunities that you can use to your benefit.

Define the logistics business model you’d like to go with

One thing you’ll need to decide is whether your business will be a new venture or something that works off an existing company. More specifically, determine whether you’re better off setting up your own firm or working out a franchise agreement with a well-established, reputed firm. Both have advantages, and whilst the former allows room for innovation the latter may have lower financial demands.

Next, zero in on your specific role in the delivery chain. For instance, you could have a transport and logistics business that simply picks up stationery from a manufacturer and delivers it to a seller or have a business that offers packaging and barcode printing services as well. Similarly, decide whether you have the bandwidth to handle warehousing in addition to packaging or if it's better that you offer small-scale services with end-to-end efficiency.

Draw up a daycare business plan

As a preliminary measure, analyse the market to know what it takes to start a venture from scratch. The findings from this exercise will provide you a foundation for creating a sound business plan, which is the next step. As part of your research, make a list of the legal and financial requirements involved in opening a daycare centre. Then, study your competitors to learn what they offer and don’t, based on which you can include unique services to set you apart.

Look for logistic business opportunities in the current market

Once you define your business model and what the scope of operations are, get together your team and brainstorm to come up with unique logistics business ideas that will tip the scales in your favour. Beating competition is of utmost importance, and that’s why every logistics business plan in India ought to have some USP that can draw clients away from existing big-name players.

So, if you realise that a common problem in your area is that delivered goods are frequently reported to have defects, consider setting up a warehousing unit that specialises transporting goods via high-grade pallets. Similarly, if physically managing a fleet of trucks isn’t your forte, consider a logistics business that deals with only software-related aspects and provide services like vehicle tracking, offline maps, SMS alerts, route re-configuration and inventory management.

Likewise, if your local demographic reveals a large portion of elderly persons, consider mobilising local stores, so that senior citizens can get medicines and groceries delivered to them in time via a call or an app.

Look into the legal matters

Obtaining a firm legal footing is important for any business, especially so for a logistics business that deals with inter-state services. To start off, depending on the business model you go with, your venture will be classified by terms like LLP, partnership, solo firm or a company. While setting up your venture, you may need to register with the Air Cargo Association of India and the International Air Transport Association. Registering yourself with government departments and with the IT department are important first steps. Likewise, safeguarding your legal name via a trademark and drawing our detailed terms and services is incredibly important to offering professional services.

Identify assets and software that you need to purchase

Depending on the logistics business model you deem viable, your plan will require a commensurate amount of initial investment. For instance, if you settle on a 2PL model, purchasing or taking on rent several tempos, trucks and vans may suffice. However, if you are stepping into the 3PL league, your venture would require units to handle packaging and warehousing as well. This means hiring out premises and investing in equipment.

However, whether you plan to offer freight and cargo services or cold chain or ambulance services, equipping your firm with the right software is paramount to flourishing in today’s day and age. The logistics sector thrives on the ecommerce industry and having real-time updates on goods and services via tracking and inventory management systems is essential to maintaining order and timeliness. 

Avail funding for your logistics business

Now that you have a comprehensive logistics business plan in place, all that remains to make it bear fruit is to obtain sufficient funding. One way by which you can avail financing of up to Rs.30 lakh sans collateral is by opting for Bajaj Finserv’s Business Loan for Service Enterprises. Not only does it not require you to pledge security, but it also offers you a speedy 48-hour loan disbursal upon approval. You can repay over a flexible 12- to 48-month tenor and choose the Flexi Loan facility for smart management of your funds. This feature allows you to lower your EMIs by up to 45% by paying interest-only instalments through the tenor, and the principal at the end.

To get started, check your pre-approved business loan offer from Bajaj Finserv. Doing so gives you instant approval via a customised deal and will help you get your logistics business on the road in no time at all!

Additional Read: Reasons Why Business Loans are Financially Beneficial

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