want to start a shipping business? If yes, here is a complete guide on how to get started with a little money and an inexperienced shipping company.
With the growing demand for shipping services that offer competitive prices and promise convenience, speed, and reliability, there is no better time to enter the shipping business.
The industry is growing and changing rapidly, primarily due to increased demand and reliance on online shopping.
Steps On How To Starting a Shipping Business/Company
Understand the Industry
The shipping industry is an integral part of the world economy, and it will do a great disservice to discuss this important industry, without enumerating the facts, figures, and statistics that make the industry tick.
It is a general fact which is accepted by all, that more than 90 percent of global trade is carried by sea.
The major factor that encourages people to venture into this industry is its viability as a profitable venture.
The lucrative nature of the industry is unparalleled and it’s indeed one of the few industries in the world which has the highest turnover in terms of profit and otherwise.
Conduct Market Research and Feasibility Studies
The demographic and psychological composition of people in need of shipping company services is useful in the public sector, private sector, households, communities, people of various classes, and people of all disciplines.
Below is a list of people and organizations that need the services of a shipping company.
- Public sector
- Organized private sector (corporate organisation)
- Small and medium-sized enterprises
- Businessmen and businesswomen
- University campuses and schools
- Sports groups, etc.
Determine the niche you want to focus on
As in any industry, transportation has many niches. When it comes to starting the shipping industry, the niche of choice may not really be necessary, but there are some niche ideas within the industry for entrepreneurs to choose from.
Outside of the existing niche of the shipping industry, creative entrepreneurs can create a niche for themselves.
Here are some niches/areas that a shipping company can be specialized in;
Home-delivery shipping etc.
Decide Whether to Buy a Franchise or Start from Scratch
If you’re buying a franchise from a successful shipping company or considering investing in the shipping industry, you might even partner with a large and successful shipping company.
The most important thing to consider when doing this is the fact that people are motivated to start a business based on a variety of factors and incentives.
If you want to build the business, you want to control the corporate brand and want to someday transfer ownership, and perhaps even sell the franchise in the future, then starting from scratch is the best option.
But if your interest is to make money and increase your fortune, you can also buy a successful shipping company franchise that is willing to sell their franchise.
Know the Possible Threats and Challenges You Will Face
In general, in the shipping industry, both already established and start-ups shipping companies have the potential to face challenges from government policies, a global recession that usually affects spending, and unexpected natural disasters (frustrations). Threats and challenges from (a disaster).
Another threat you may face when launching your own shipping company is the excess and maximum control that existing companies in the industry have over other companies and the timely and good contracts.
Choose the Most Suitable Legal Entity
Undoubtedly, starting a shipping company is certainly a serious business, mainly for the procedures involved.
Similarly, the legal entity selected will have a significant impact on the scale at which the business can grow.
Choosing a business legal entity like a shipping company is a bit easier, especially if you decide to grow your business significantly.
When selecting a legal entity for a shipping company, you can select either a partnership, a limited liability company, an LLC, a “C” legal entity, or an “S” legal entity.
It is important to clarify that these various legal forms of a company have their own strengths and weaknesses.
Before making a final decision based on one’s expectations, we need to weigh properly.
Factors to consider before choosing a legal entity for a shipping company include, but are not limited to:
- Limitation of personal liability
- Easy portability
- Admission for new owners
- Investor expectations and tax issues.
Choose a memorable company name
The shipping industry is not a name-loving industry. In fact, the name may not have a significant meaning in winning a business contract.
However, when looking to start a shipping business/company, you should bear in mind that there are no specific structures or patterns that you must follow when choosing a shipping company name.
Talk to an agent to find out which insurance policy is right for you
In most countries around the world, you can’t run a business without some of the basic insurance policies that the industry you want to work in needs.
In addition, due to the nature of the shipping industry, you must have sufficient insurance.
Otherwise, you will be out of business if there is a problem with the product you are dealing with.
Therefore, it is important as well as the need to budget for insurance. Perhaps consult an insurance broker who can provide advice on choosing the best insurance policy for your carrier.
They guide you properly and take advantage of the risks associated with the business you are about to enter.
Here are some of the basic insurance you need to buy if you want to start your shipping business/company in Nigeria.
- Completed NIMASA Form 1
- Current tax clearance certificate
- Certified true copy of Form CAC 7 (Particulars of Directors)
- Certified true copy of Certificate of Incorporation
- Certified true copy of Memorandum and Article of Association of which the share capital must not be less than N25 Million, and the object of the company must be shipping.
- Latest Audited Report
- CAC Form 2.1 ( Return of Allotment) where applicable
- Evidence that the company has filed its annual returns
- Evidence of registration as a Licensed customs agent
- Joint venture Agreement where applicable
- Charter party agreement where applicable
- A reference from the bank
Protect your Intellectual Property With Trademark, Copyrights, Patents
There is no such thing as proprietary intellectual property in this industry, but you need to make sure you have all the licenses you need to ensure that you are doing your best without harassment.
Get the required professional qualifications
The shipping industry is tightly regulated around the world, primarily due to a number of factors involved.
Therefore, if you are interested in entering the marine industry, you need to obtain the necessary and necessary certifications.
It gives you an edge over your competitors.
In fact, the more relevant shipping certifications you and your team have, the more professional you are and the easier it is to convince people to patronize your service.
Here are some of the professional qualifications you or your key employees need to acquire.
- Certified International Trade Expert (CITP)
- Certified International Trade, Shipping and Logistics Expert (CITLP)
- Certificate of sea shipping
- Logistics expert certification
- Forwarding business certificate
Get the legal documents needed for the operation
Around the world, the shipping industry is one of the most regulated as well as tightly regulated industries, primarily due to the large capacity of the industry.
Therefore, to avoid serious violations including domestic safety and health. Therefore, if you are considering establishing a shipping company, you are expected to meet the requirements of the legal documents set out in your country’s constitution.
These are some of the basic legal documents required when incorporating a shipping company into the United States.
- Incorporation certificate
- Shipping release certificate
- Business license
- Business plan
- Non-disclosure agreement
- Employment contract (offer letter)
- Company agreement
- Company legislation
- LLC operating contract
- Insurance Policy
Write a Business Plan
Business planning is the blueprint required to operate the company successfully.
So you can manage your business in a work plan with a functional plan with purpose and maybe it is probably accurate.
You know what you want to do and how to handle what to do, and how to handle and expand.
So if you want to start your own delivery company, you need to write a detailed business plan that you can run a real test if it is exposed to it.
You should handle the facts of the shipping industry, numbers, and other indicators, as you apply to the country where you will start your business.
A comprehensive business plan writes one of the most important steps to the beginning of a successful shipping company.
The business plan is a business overview, competitor, the skills, and price, the target market, the own sales offer, and core competence, their price, their financial plan, their funding source Their funding sources, their funding sources, their funding sources, their funding sources, their funding sources, the opportunity, and opportunity to the factor of the threat land shipping industry and its exit strategy.
The business plan leads more through the successful start and operation process of your company.
Present your business ideas to third parties from third parties such as investors and banks.
Raise the Needed Startup Capital
If you choose to start your shipping business/company on a small scale, it may not be necessary to have multiple resources to start a business, but if you decide to start on a large scale, it must increase Capital began to start the company.
If you start a large-scale navigation company, you will need to install desktops, office equipment, and office furniture and money provided to pay wages and utility invoices.
In at least a 3-month period and you will also need money to buy shipping documents that will facilitate your business.
Related to the finance of a company, one of the first and perhaps the main factors that you should consider is to write a good business plan.
If you have a good business plan and a good business plan, you may not have to have many struggles before convincing banks, investors, and your friends to invest in your business.
Here are some options you can explore when providing start-up capital for your navigation company;
- Increase money from personal savings and sell personal share and property
- Increase money from investors and business partners
- Request your bank/bank loan
- Plan your business idea and apply for business funding and seed sponsorship of sponsors and angel investors
- Source for soft loans from your family and friends
Choose a Suitable Location for your Business
if you want to start a shipping business, choosing a location for your business is not something you should do without consulting.
The truth is that if you choose the wrong location where you have decided to pitch your business tent, you are more likely to have trouble growing the business forward.
Choosing the wrong business location will definitely have a negative impact on the business.
Some of the factors you need to consider before choosing a location for your shipping company include;
- Demographics of the location
- Accessibility of the place
- Number of local shipping companies
- Local laws and regulations in the community/state
- Traffic, parking, etc.
Hire Employees for your Technical and Manpower Needs
If you are going to start a shipping business/company, you should be prepared to purchase efficient transportation equipment and other modern conveniences.
These are some of the basic technical areas where you are expected to spend some of your startup capital.
When it comes to choosing between renting and leasing office space, the size of the moving company you want to build will play a huge role in this, as will your overall budget for the company’s office space will affect your choice.
If you have enough capital, renting an office will be better.
Financial capacity must be considered before choosing the number of employees to work in your business.
However, it may not be necessary to employ many people within the business. But on average, you’ll need a general manager or president (you can fill this role), an administrative and human resources manager, security consultants, and associates (specialized areas).
Different subjects depending on your business), a business development manager/marketing manager, customer service agent or front desk agent and accountant.
Typically, you will need a minimum of 10 key employees to effectively run a midsize shipping company.
Please note that there will be times when it will take the trouble of hiring professionals to help you manage certain high-level transportation contracts.
Although you may not be able to start with the necessary expertise when starting a business.
Create a Suppliers/Distribution Network
The nature of the shipping industry makes it easy for shipping companies to connect with each other and also with government shipping agencies.
This is so because the issue of ocean freight cannot be handled in isolation. This is all the more true as custom service updates from different countries’ governments are always needed to make sure everything works smoothly.
Since there will always be a strategic alliance between shipping companies, it is appropriate to connect their networks.
To learn more about shipping registration and partnership contact us