Logistics Consultant Business Plan, Marketing Plan, How To Guide, and Funding Directory
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With more and more people ordering products online and international trade expanding rapidly, the demand for logistics consulting has increased considerably over the past 10 years. In fact, this is one of the fastest growing industries within the overall transportation market given that more and more companies are integrating technology into their operations. As such, the demand for competent advice as it relates to the development of transportation infrastructures is significant.
One of the nice things about owning and operating a logistics consulting firm is that they can operate in a number of different capacities from arranging for shipments all the way to customs brokering and international freight transportation. There are numerous revenue streams that these companies can produce including consulting income as well as earning a percentage of revenues each time a freight shipment is properly managed from its port to its destination. The startup costs associated with the new logistics consulting firm are relatively low and usually range anywhere from $100,000 to $300,000 depending on the type of services that are going to be offered.
Most importantly, these businesses have high barriers to entry given that the individual that is starting this company typically has extensive experience in the field of freight transportation and logistics before they start their own firm. There are also a number of licenses that are necessary in order to conduct these types of operations.
A logistics consulting firm SWOT analysis is typically produced as well in order to showcase the strengths, weaknesses, and threat these businesses. As it relates to strengths, logistics consulting is in demand at all times including during economic recessions. As these businesses operate on an international level, there are always going to be companies that need assistance with managing their ongoing shipments and freight transportation. The gross margin services from services is extremely high and ranges anywhere from 70% to 95% depending on what is considered part of the cost of goods sold.
For weaknesses, these businesses do have very high operating expenses and there’s a substantial amount of competition within this market. The cost relating to managing an underlying freight transportation shipment are very high. However, computerized technology has substantially reduce these costs over the past 10 years.
For opportunities, one of the ways that many logistics consulting firms will frequently expand their operations is by operating in a freight brokerage capacity. In these instances, logistics consultants can receive a substantial percentage of any freight shipment that is managed by them. Usually, these fees are about 15% of the total freight shipment although the industry standard is typically around 10%. It should be noted that these businesses can also produce income from hiring additional logistics consultants that can render a greater degree of services to the general public.
For threats these businesses do face some external environmental risks especially when oil prices spike or there is a major economic recession. As such, there is going to continue to be the necessary monitoring of these issues in order to ensure that the business can remain profitable at all times.
Most financial institutions are receptive to providing a working capital line of credit to a new logistics consulting firm given the high margin and high predictable streams of revenue produced. Of course, a logistics consulting firm business plan is going to be required. This business plan should feature a three year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. As it relates to the logistics industry revenues, this industry produces about $4 billion a year of income. There are proximally 7,000 companies in operation and the industry employs 35,000 people. As it relates to the demographics that are going to be targeted by the business, an analysis of the types of trucking companies, freight companies, shipping companies, and air freight companies should be included within the analysis. This includes taking a look at annual revenues, annual expenses, amount of money spent on logistics consulting each year, and any other relevant statistics that outlines the potential customers of the business. A competitive analysis should be developed as well although this can be done somewhat on a light basis given the fact that there are several thousand logistics consultants in the market. As such, this section the business plan can be focused more on how the business will provide outstanding services, development of appropriate logistic infrastructures, and other differentiating factors.
A logistics consulting firm marketing plan also needs to be developed. This marketing plan can be somewhat small in nature given that these businesses are going to have direct communication with their customers at all times. Most importantly though a full-scale website should be developed that showcases what services are offered by the company, hours of operation, types of shipments managed, types of logistical infrastructures developed, and relevant staff biographies. This website should generally be listed among all major search engines including Google, Bing, and Yahoo. A presence on social media is not necessary for most logistics consulting firms given that this is very much a business to business enterprise and does not need to market itself heavily to the general public.
Logistics consulting will remain one of the most exciting and fast-growing aspects of the overall transportation industry as more and more companies seek to integrate technology into their operations. The demand for higher returns on investment coupled with the demand for integrating real-time tracking for all shipments has created a very strong demand among the logistics consultants that can provide the service. For an entrepreneur that has extensive experience in the transportation logistics industry, this can be a very lucrative business opportunity even if the individual is just going operate as a solo practitioner consultant. The anticipated growth of this industry is expected to remain around 5% per year moving forward which is significantly higher than the anticipated growth rate of the economy as a whole.