Finding customers and signing your first contract
Where to find a contract or customers for my transport business?
There are almost 4 000 road freight businesses registered with the TETA; many of these are small businesses, and they will be your most direct competition. To determine your target market the first step is to do in-depth research that will help you define who your customers are.
This is known as market research and it is this collection and analysis of information about consumers and your competitors that we help you plan your marketing strategy.
Areas to look into are:
- Manufacturers: They need their raw materials delivered to their workshops or factories
- Agriculture: Farmers use road freight haulers to move their animal feed, chemicals such as fertiliser and pesticide, livestock and agricultural products are transported by road
- Wholesalers: They need to have their stock delivered to their warehouses or wholesale outlets.
- Smaller services: Refuse removal, garden clean-ups, furniture and office movers.
Advertising your services
- Get your name out there. Try advertising in the local newspaper, or listing in the classified section of community newspapers in your area. Another successful avenue is the buying an ad in the Yellow Pages.
- Apply your business name, logo and contact details on to vehicles, to raise awareness when vehicles are out on the road.
- Join associations such as the Road Freight Association or the local chambers of commerce so that you can network with companies operating in your area.
In order to be successful in obtaining business contracts you have to demonstrate that you have experience in the industry and that you can sell your business based on a high standard of business principals and ethics. Ensure that you can offer a better service that no one else can.
If you have a history in the industry, it makes it much easier to win contracts.
- Speak to owners of similar businesses and make yourself known. The best source of information you can find about an area of business, is other business owners. One way for smaller operators to secure contracts is through sub-contracting. Subcontracting occurs when a transporter contracts to a third party and not to the principal. The subcontractor subcontracts to an established transport company which has the contract with the principal but perhaps does not have the capacity to carry out the contract.
- Make contact with businesses such as manufacturers, wholesalers and retailers to see if you can tender for work to deliver their goods.
As a small transport business, you can approach transport brokers and secure contracts through them.
Before accepting a contract though a broker, discuss the terms of the contract with your mentor, so that you have the proper checks and balances in place.
As a small transport business you can approach transport brokers and secure contracts through them.
A broker can take up to 20% of the contract value. “Be wary of who you choose to work with in the brokering industry as it is not well regulated and its wise to ensure that they are reliable and upstanding brokers”, recommends Johnston.
How do you get onto a suppliers list?
There are almost 4 000-road freight businesses registered with Transport Education & Training Authority (TETA) of which many are small businesses, and they will be your most direct competition.
Winning contracts takes hard work and it takes of lot of networking to develop strong relationships in the industry that you are approaching. Trustworthiness is another very important aspect.