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How Do I Start A Transport Or Logistics Business?

An all in one guide to starting a transport and logistics business.

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Thinking about starting a transport business?

Forecasts indicate that the demand for freight transport will grow in South Africa by between 200% and 250% over the 15 to 20 years.

Your Free Cheat Sheet: Transport and Logistics Business Cheat Sheet

Some corridors, (high volume transport routes that connect major centres), such as the corridors between Gauteng and Cape Town (which amount to 50% of all corridor transport) will increase even faster.

The scope in the transport and logistics industry is varied – from a one-man show using a small truck to transport goods and offer services, to a fleet of transport vehicles which travel the length and breadth of South Africa’s roads.

Road transportation includes commuter transport from taxis to bus transportation.

It can be a tough industry and there are many threats facing transport businesses but if you get it right, you can build a successful business.

What is covered in this guide:

  1. How to start your transport and logistics business
  2. How to get funding for your transport business
  3. What are the costs involved
  4. Finding customers and getting transport contracts
  5. Getting onto suppliers lists
  6. Buying trucks and employing drivers
  7. What are the regulations and risks
  8. Where to find guidance to start your business.

Ready to get going? Click the arrow button to learn how to start your own transport business.

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Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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30 Comments

30 Comments

  1. naughtyjockey

    Sep 2, 2013 at 16:02

    Nice Stuff 🙂

  2. Mabhiza Mshengu

    Jan 28, 2014 at 11:33

    That’s sounds cool but what if you owe perhaps R380 000 and you want consolidate that debts is it possible for you people to help?

  3. Nathi Jali

    Feb 7, 2014 at 14:01

    Thank you

  4. refiloe

    Jun 21, 2014 at 05:02

    I am woman and very interested in transport businesses. I do not qualify for any loans in any bank.can the bank consider my proposal when I have contract?

    • Drewzie

      Aug 9, 2016 at 10:50

      yes, a bank will fund your business a long as you have a contract
      and it proves that you afford paying bank the loan monthly.I work for the bank and i am also interested in starting my own thing.Please contact me on gmail: getandrews@gmail.com

  5. Corne

    Aug 17, 2014 at 23:43

    Hi
    Me and my partner want to start a transport company, the question is what type of vehchile wil suite the goods? We transport mostly dry fruit and mechanical items? Sould we go for tonnage or cm3?And what system for invoicing is good to start with?

  6. Kanelo Temeki

    Aug 25, 2014 at 11:20

    Good Day,
    I have a 22 seater bus which I can contract to any company either to transport their staff to and from work, but I am struggling to get contracts, can anyone help if you do have information or know of any clients that might be interested in such services

    • Hlelo

      Aug 2, 2016 at 17:50

      Hi Kanelo. M also starting a transport business. Can u please contact me on 078 700 5417. M in Dbn.

  7. NEO

    Aug 26, 2014 at 08:39

    my wife and i want to start a transport business, and looking to get an Anvanza>>>which companies can we target to render our services, we live in the vaal ( Vereeniging,Vanderbjilpark) any ideas??

  8. NEO

    Aug 26, 2014 at 08:39

    my wife and i want to start a transport business, and looking to get an Anvanza>>>which companies can we target to render our services, we live in the vaal ( Vereeniging,Vanderbjilpark) any ideas??

  9. vincent

    Mar 5, 2015 at 11:56

    hi I’m 30 years I’ve started a logistic company last year 2014 I’m willing to get a contract from any division just to assist in transport goods problem I don’t have a truck and the bank want a contract for them to finance 1 or two trucks for me so please help me with your opinion where to start?

  10. Tshephiso Gafane

    Jul 25, 2015 at 18:47

    Hi, I have a kia k2700 bakkie looking to start transport company, I am struggling to get contracts and small services refuse removals, furniture and office movers. I want to grow the business any tips guidelines will be very much apprecited

  11. Rudie

    Sep 4, 2015 at 09:26

    I’m thinking of exploring the transport business and have some questions, how to kick it off, which market is the best and would it be financially feasible, how to get a contract, what is the running cost, etc. Any information / assistance would be greatly appreciated. Please email me to rudie.oosthuizen@outlook.com

  12. Yvonne Madilola

    Dec 8, 2015 at 21:10

    Hi. My partner and I have just purchased a super link side tipper. It is packed outside my house for a month now. I want to get it started working ASAP. I’m in northwest Klerksdorp. I have a registered company. Please advice where to look for contracts. I’m good with starting with a 3 month contract.

    • Damien

      Jan 5, 2016 at 13:51

      Hi Yvonne, Email me geshann@hotmail.com we can talk. thanks

    • Natalie Van Wyk

      Apr 25, 2016 at 12:02

      Hi Yvonne, can you please let me know if you had any successes, I am interested?

    • Natalie Van Wyk

      Apr 25, 2016 at 12:02

      Hi Yvonne, can you please let me know if you had any successes, I am interested?

    • July Mathibela

      Jul 26, 2016 at 17:11

      Hi Yvonne be aware there are lot of scams in this business so be in the look out dont trust people if they say they can assist you do your homework find out about that person first and check all the references and you must see where he operates and the trucks if he is transportation coal go and see where is operating. I lost R460K last year transporting coal from Mtubatuba to Richardsbay I worked for mahala till today.

    • Hlelo

      Aug 2, 2016 at 17:56

      Hi Yvonne. M interested in that kind of business. Please email me at bc.simakade@gmail.com

    • jonas moabelo

      Aug 13, 2016 at 15:34

      Hi Yvonne,may i kindly have your numbers,mine is 0836992213

  13. michael braai wood

    Jan 13, 2016 at 15:10

    Hi I am Michael. I have two NP300 diesel bakkies and two trailers plus a 2 ton truck in Phalaborwa and also operate in Polokwane(LIMPOPO), I sell (dry hard) braai wood( ROOISBOS, HARDEKOOL, KNOPDORING, SEKELBOS, MOPANI ETC) Anyone who want to be a distributor( business opportunity) is welcome to contact me on pilusa1983@gmail.com and 0734068875. We can deliver to your warehouse at a cost around the country.

  14. Tebogom

    Apr 12, 2016 at 19:27

    I have 2 Mercedes Benz crew buses 7 and a 6 seater, am looking for companies that I can render a service for. Contact tebogo@martebshuttle.co.za

  15. Katlego Rakgatjane

    Apr 26, 2016 at 15:58

    Hi. I have just purchased a VW Caddy panel van. It is packed for a months now. I want to get it started working ASAP. I’m in Gauteng Mamelodi. I have a registered company. Please advice where to look for contracts. I’m good with starting with a 3 month contract.Contact admin@skepeholdings.co.za

  16. Mbulelo Madlala

    May 15, 2016 at 23:46

    i am a male ,i own a vw T5 ,10 seater and i would to start transport business ,which companies should i consider

    • Hlelo

      Aug 2, 2016 at 17:53

      hi Mbulelo. M interested to negotiate with u. Kindly contact me at 078 700 5417

  17. Takalani

    Jul 14, 2016 at 14:00

    Hi
    we are in logistics and transportation company for almost 10 years but its difficult to have the new clients or customer since then we are serving the same peopls, we having flet deck, box trailer, tri axle and we do all the tone, may you please assist where can we go about to get the new client…

  18. princess

    Aug 19, 2016 at 15:03

    hi im looking to start a transport business but I need advice on the steps to take in order to be able to be get clients and the risk involved in this kind of business. thanks

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Start-up Industry Specific

Want To Start A Property Business That Buys Property And Rents It Out?

Information on starting a property renting business.

Shawn Theunissen

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Start your property rental business using this guide

I would like to start a property business where I purchase the properties and I rent it out, I already have a paid up property that I am renting out but my taxes are too high on the rental income so I am considering starting up a business. Could you advise me on where I can get more information on the requirements to start this and provide some guidance on whether it would be wise to pursue this business?

Before starting any business, it’s important that you’re absolutely clear about why you’re doing it – and that it’s going to be something that excites you, drives you and challenges you in the long-term.

If you’re only considering starting a property investment and management company to try and reduce your taxable income, then I don’t believe this is an appropriate – or a sustainable – solution.

Related: How The Property Brothers Built Up A Real-Estate And Entertainment Empire One Brick At A Time

You should rather consult a reputable financial adviser about other investment options that would better suit your personal needs.

If owning and managing properties is, however, an opportunity you would like to pursue, I would then recommend that you start off by equipping yourself with a proper understanding of what it actually means to be a landlord.

This will help you to make an informed decision about whether or not you want to start this (ad)venture as an entrepreneur. At a very basic level, here are some of the things you might want to consider to determine if this is the right business for you:

Initial cost

initial-cost-and-property

This is what you need to consider, cost wise, when you start up your business

You need to consider the initial cost that you will be incurring when setting up the business, especially since you have a property in your personal capacity.

You will need to transfer the property from your personal capacity into your business and pay transfer fees and transfer costs.

These costs will be calculated based on the current value of the property.

The work and planning

No matter whether you’re a residential or commercial landlord, property management requires a great deal of work and planning. Remember you will be responsible for all aspects of the property: From purchasing it to maintaining it on a day-to-day basis.

Related: Real Estate Business Plan Sample

This involves everything from transfer to managing the monthly utility bills, all the way through to replacing the geyser when it bursts and ensuring your tenants behave appropriately in the building. You would also need to source your tenants and ensure that they pay you on time.

All by yourself

business-owner-development

Starting your business alone? You need to know this

From a start-up perspective, you would probably need to do all of this yourself in the beginning. As such, you would need to work to build up your own database of reputable suppliers: Plumbers, electricians and handymen.

It’s important that you find experienced, qualified suppliers that you can trust, and who will be able to deliver on time and cost-effectively.

Related: Handyman Joshua Cox Of Trade-Mark On Thinking Like A Tech Start-Up

This can be a very time consuming process. Also consider that you would need to be on hand to facilitate all of this work: Arranging the call-out with the supplier and the tenant; overseeing the work delivered; paying the supplier etc.

Business owner development

Above and beyond that, you’re then going to need to develop yourself as a business owner. You will need to equip yourself with the skills and knowledge required to lead and manage this business in order to make it both sustainable and profitable.

This will require a significant investment from you: Time, effort and money. The more you commit to this journey of personal and professional development, the better your chances of success.

If you can picture yourself doing – and enjoying – all of the above, it’s then equally important to consider if this is a viable opportunity.

The greatest barrier to entry in this sector for you as an entrepreneur is probably going to be finance.

You need to be conscious of this from the outset.

  • Do you already have access to the funds you need to purchase the properties you are going to rent out?
  • If not, what are your plans to secure this funding? And what are the returns you are expecting?
  • Also consider the funding of the business itself. How will you finance this, especially during the first year?

My recommendation here is to take the time to do your homework – and the maths. While this could be a business opportunity, it might not be something that will be possible for you to do on your own.

Related: What You Need To Know To Become the Next Property Entrepreneur

If you have a feasible plan regarding the above, you then need to start working on developing a model for this business – as well as a strategy and plan. All of these will require research on your behalf: From reading Entrepreneur to accessing websites, possibly visiting walk-in centres etc.

This will include unpacking the actual opportunity itself – and determining if there really is a demand for your service offering.

Please note that the above are thinking or “trigger-points” – listed simply to give you an idea of some of the things you need to consider, as well as the mindset you will potentially need to adopt as an entrepreneur. Your response to them should give you a good sense of if this is the path you wish to walk.

Related: 9 Quotes Every Entrepreneur Should Live By

Remember that entrepreneurship is a journey – and every day on this road is a learning opportunity. If it is for you, embrace it whole-heartedly, don’t be afraid of failure and be sure to seek out the assistance available to you.

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Start-up Industry Specific

How To Start A Clothing Business

The South African clothing industry is a talented one.

Entrepreneur

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Content in this guide

  1. Create a blueprint for your business
  2. Name your clothing line and company
  3. Register the business
  4. Basic design skills
  5. Production Plan
  6. Manufacturing
  7. Get the pricing right
  8. How to find a clothing manufacturer
  9. Networking is a valuable tool
  10. Market your line
  11. Online marketing
  12. Workshops and training

The South African fashion industry has the talent to develop original products with inspirational style and creative detail to compete very well with popular international brands. However, designers too often fail to deliver through lack of basic planning and business acumen,” says Amanda du Plessis.

Du Plessis launched the retail consultancy Evolution 4 years ago to help top South African brands to realise their potential. A doyenne in the industry, she started her career as a buyer at Truworths, developing in-house ladies wear and accessories ranges.

She joined Stuttafords as a brand manager where she developed three private label ranges – Define, Excursion and Oaktree – and managed six local and international brands. She left Stuttafords to head up retail development at Polo before starting her own consultancy.

Create a blueprint for your business

blueprint

Blueprint advice

There are a number of business matters that must be in place before you can start a clothing line.

  • No matter what kind of business you start, you must have a business plan.
  • In the plan, you must consider all the costs and include your goals. Once you have done this, everything else will fall into place.
  • Start small. Many business ventures begin small; then grow with time, lots of hard work and patience.

Name your clothing line and company

zara-business-name

Naming your business for success

Think of a creative and catchy name that represents you and the product. Once you have worked out a name, you must protect your label by registering the name.

Related: The Do’s And Don’ts Of Naming Your Business (Infographic)

Companies and Intellectual Property Commission (CIPC) in Pretoria is responsible for the registration of companies, trademarks and patents. Contact them to register your brand name and logo. Protect the brand name under trademark law as well, but don’t forget to do a trademark search before you register it.

Register the business

business-registration

Have you registered your business yet?

Set up a business entity by registering the business as a Close Corporation or a Private Company and get all of the necessary licenses and tax registrations that are required by the South African Revenue Services (SARS).

Related: Steps for Registering Your Clothing Business

Basic design skills

clothing-design

If you want to start a clothing line, you should have some design skills such as sketching, sewing, pattern making and textile knowledge.

The Design Process

Before you start a clothing line, you need to understand the design process as a whole. Research current trends to predict what styles, colours, and fabrics will be popular

  • Conceptualise an idea
  • Sketch preliminary designs
  • Select fabrics

“To have a successful business, you need to have items that are more accessible to a greater audience both price and style-wise. This does not mean that you need to create pieces for the mass market. Instead you need to consider a range of pieces and prices within your collections,” explains du Plessis.

Production Plan

Formulate your production plan — that’s going to do what, how much it is going to cost, what needs to be produced. You’ll need to create a sample, or have a sample created for you.

Related: Free Operational Plan Template

You can then use this sample to get orders. Take the sample to fashion shows, trade shows, retailers, craft shows, etc.

Manufacturing

hanging-suits

Clothes manufacturing and production in South Africa

Providing that you have your designs and range set out on paper, that patterns have been cut and fabrics sourced, the next step is to manufacture a range of professional samples.

“In South Africa it is difficult to find a reliable CTM (Clothing and Textile Manufacturer) willing to make a small range. You could employ seamstresses to make the clothing on your premises until you can no longer cope with demand, or better still create a group of seamstresses that work for a few designers and pay them for finished product instead of paying a daily rate.”

“This way you will know your actual cost and your labour component will be more productive. Once your units gets closer to 100/200 units you could approach a CTM to manufacture the line,” advises du Plessis. When dealing with a clothing manufacturer, prepare a list to find one that is the right fit. Find out the following:

  • How much will it cost to get what I need?
  • What are the turnaround times?
  • Do you provide samples before finalising production?
  • How soon will I receive the sample?

The textiles, clothing and footwear industry in South Africa is well established, but has been under siege for some years due to the negative impact of cheap imports. The effect of cheap exports is exacerbated by the reduction of import protection; this stems the flow of illegal imports and the effect of the discontinuation of export incentives.

Related: The Benefits Of Manufacturing Locally

“There are very few mills left in South Africa that produce apparel fabrics, and most of the fabrics are imported thru wholesalers therefore designers will not always have  exclusivity on designs, this however creates an opportunity for designers to create their own look by adding value to basic cloths by printing, embroidery or draping” says du Plessis.

Get the pricing right

Consider everything that goes into making your clothes when deciding on pricing.

  • Fashion material costs (material, cotton, buttons, zips, etc).
  • Salaries for you and any employees.
  • Advertising and marketing costs.
  • Manufacturing costs.
  • Other expenses, like utilities, supplies and equipment.

Related: Smart Marketing Ideas for Your New Business

Make sure that your target market can afford your clothing range.

How to find a clothing manufacturer

Sewing-machine

How to find a clothing manufacturer

This requires lots of legwork. Start by browsing through the internet. There is a global clothing manufacturer register on clothingregister.com that lists manufactures in South African and around the world.

“Word of mouth is a good way to find a good small manufacturer,” recommends du Plessis. Talk to other designers at fashion shows and industry events and find out who they recommend. It is a good idea when your units become bigger to include a “penalty clause” so that you are protected in the event of a late delivery by the manufacturer. , says du Plessis.

Now you are ready to launch the range

Once the samples are made, you need to contact buyers at stores where you believe your target market would shop. Not only do you show them samples, but you should also show them the different styles, colours and fabric swatches. If they decide to buy, request a written order including the delivery date and payment terms.

Networking is a valuable tool

Never hesitate to network. You never know who you could be discussing your business venture with. It could be a prospective client or even a possible partner.

Market your line

clothing-store-layout

Marketing techniques in South Africa

Spread the word by wearing your own designs and telling anyone who asks you that you made it.

  • Make use of free social networks such as YouTube, MySpace, Facebook and Twitter to raise your clothing line’s visibility.
  • Write press releases and distribute them to newspapers and fashion magazines.
  • You could open your own boutique, but you would have to prove through your business plan that the shop will be profitable. It’s a risky route
  • Sell your line to a retailer; try to set up a plan whereby you sell your clothes through other clothing retailers.
  • You can also take your samples to craft fairs, flea markets, fashion shows and trade shows.

Online marketing

Online sales can be a great addition to your sales plan. Either you can use your own professional website, or you can use online marketplaces such as FashionCircus.net, or LA Showroom on http://www.lashowroom.com/ and for news, events and forums dealing with the South African fashion industry go to ifashion.

Workshops and training

“One of the opportunities for the South African design schools is to address the business side of design and to equip the designers with the correct tools.” says du Plessis.

Many academic intuitions offer Fashion Design courses including Lisof (London International School of Fashion), The University of Pretoria and the Design School of South Africa. Evolution runs regular workshops to help and guide the industry in South Africa. Watch evolution projects for workshop announcements.

Related: Business Plan Format Guide

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Start-up Industry Specific

How Do I Start A Wholesale Fruit & Veg Business?

As a greengrocer or seller of whole foods, fruit and vegetables, you have a lot of scope when it comes to products.

Entrepreneur

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Get some direction with this Whole food Sea Market sample business plan

Besides selling fruit and vegetables, you would be able to sell other types of produce as well, such as flowers, herbs, eggs, milk, butter, cheese, and specialist foods such as olive oil, nuts and seeds, and organic produce.

Greengrocers can also offer personalised service such as a delivery service, taking orders over the phone, by email or through websites or Sms’s. They can also supply local restaurants, guesthouses, and coffee shops in the area.

The first step to take when starting any business is to prepare a business plan. This will help you understand the business process. There are various points that you must think carefully about.

Can a small wholesaler compete?

small wholesaler

Does size really matter?

To be successful you need a strong interest and a good knowledge of fresh fruit and vegetables – so that you know what is in season, the shelf life of different produce, ripening times, how to identify freshness and quality.

Related: 10 Ways Competition Can Improve Your Business

There is no doubt that one can be successful in this industry, but you will be competing with other greengrocers in your area, so you need to get to know your direct competitors very well.

One useful key to a successful greengrocer business would be to identify potential gaps in the market. These competitors will be independent operators like yourself. However, don’t forget to research other competitors such as large outlets like Fruit and Veg City and the large supermarket groups.

Their buying power makes it possible for them to keep prices low. Greengrocers can over come this by offering better quality products, personalised service and by stocking a variety of speciality fruits and vegetables that a supermarket would not stock.

Location is important – most of your customers will be people living or working locally, so you need to choose a convenient a location with lots of foot traffic.

Where to get fresh produce

fresh produce

Fresh produce in South Africa can be hard to find – unless you look in the right place

Markets

If the business is located in the Johannesburg area, the Jo’burg Market serves thousands of farmers from across South Africa who sends their fresh produce to the Market to be traded every day. Currently, about 15 000 farmers make use of this distribution channel.

Related: The Best Ways to Do Market Research for Your Business Plan

The large buyer base – averaging about 9 000 at any given time comprises of retailers, wholesalers, exporters, processors, informal traders and those buying for households. All major centres and even small towns have local fresh produce markets or co-ops where greengrocers can stock their stores.

Distributors

There are a number of national distributors who offer a reliable national supply chain. Their focus is to service identified target markets in the catering, wholesale and food service industry, with quality and affordable products.

  • Dew Crisp Farms supply fresh vegetables and fruit and aim their products at the “convenience market” where all the products are washed and cleaned, packaged and then distributed to supermarkets and greengrocers.
  • Yukon is the largest local supplier and exporter of baby vegetables in South Africa and supplies some of the most discerning retailers in the world. They also distribute products locally.
  • For farms and produce suppliers in the Overberg are of the Cape.

Niche wholesale businesses

organic-fruit-cut-up

Niche wholesale business in South Africa

Related: 5 Steps You Can Use To Find Your Niche

Interest in organic food continues to grow in South Africa, as many people are worried about the effects of pesticides and fertilisers.

  • Go-Organic.co.za is South Africa’s premier organic website, directory, and marketing company. They trade locally and internationally in bulk organic products. Go-Organic.co.za is a private, commercial organisation committed to social and economic upliftment.
  • Urban Sprout is an organic-eco directory that focuses on organic and eco-friendly products from specialist tea to organic whole foods. To access the directory go to www.urbansprout.co.za.

Equipment Requirements

The outlay could be costly, as you want your shop to look attractive. It should have the following items installed in the shop.

  • Refrigerated display units.
  • A freezer if you plan to sell frozen produce.
  • Budget for shelving at various heights, to display produce.
  • Scales to weigh products.
  • An electronic till.
  • Credit card swipe machine facilities to accept card payments. You can buy or rent these from your bankers.

Ongoing Costs

Food Lovers Market in South Africa

Food Lovers Market in South Africa

The need for a good cash flow is important, as you will have a number of ongoing costs in this kind of business.

  • A constant supply of fruits and vegetables, packaging and promotional expenses should be included in your budget
  • As your business grows you may also need a van with cold storage facilities for deliveries
  • Don’t forget insurance costs such as fire, theft and damage, employers’ liability insurance for staff, as well as motor insurance for any delivery vehicles
  • Marketing
  • Staff costs
  • Book keeping service
  • Insurance.

Related: Start-Up Costs Worksheet

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