First in simplest words – You should know your customers, your market, your area geographically and most important your budget…
Let us start by evaluating the basic things one by one.
Actionable Tips to Start a Small Warehouse Logistics Business
#Know your customers:
Always first ask why? to each of your ideas… Why you want to start Warehouse Logistic Business? Why people will come to you when there are already established operators… Why people will choose / select you leaving away the established ones…
Answering your each Why’s thoroughly will make you a better warehouse service provider.
Survey / study your market first. See who all are established players in your region? What services they provide? What type of customers and commodity they handle? What is their investment in business? Consider the warehouse rent / salary and other operational costs carefully.
Check in your local area of operations what is the existing rent of a small warehouse? This is usually quoted on per sq. ft. basis, check the monthly maintenance and property tax amount and who will pay this amount?
KYC is the key to success. Know your customer is the most important aspect of starting small warehouse logistic business.
- You should know the material you have to handle, the packaging size, type of package, storage type (whether it has to be stacked on racks / pallets / on the floor / height of stack etc.)
- Monthly movement of stock from client premises to warehouse to distribution channel / client. Maintaining the inward and outward record is most important in this business. Proper labeling / marking / tagging of each batch of goods, handling the loading and unloading of goods, transporting the same to various places without damaging the goods. On time delivery of goods as per requirement.
- If you are handling multiple clients and products together you have to be very sure that material doesn’t gets mixed up while stacking and delivering the goods. Keep separate marking of space for better handling.
Once you are ready with the client product knowledge, next important thing is terms of contract.
#Terms of Contract:
You should keep in mind the following things when taking up the contract.
- Frequency of material handling and movement.
This will help you in establishing the transportation cost and manpower cost for loading and unloading of goods.
- Pickup and Delivery Destination
This will help you understand the cost of logistic involved. If the material is to be picked up from and delivered to one location or multiple locations. This will also help you in taking the cost of transportation in consideration.
Submitting the material movement reports on daily / fortnightly / monthly basis. Keeping the relevant documents ready to be submitted with the report.
When the payment will be released from the company? On daily / fortnightly / monthly basis. If the company is paying you on monthly basis then you should have sufficient money backup to run your day to day show. As you will need to make some payments on daily basis, and so sufficient money backup will help you to run the show.
Once you are ready with mutually agreed terms of contract then comes up is size and location of your warehouse.
Knowing the monthly quantity of goods you have to handle, you can decide on the size of warehouse you will require to store the goods. While deciding on the warehouse, you should keep these important points in mind before finalizing the space.
- Location of warehouse.
- Accessibility from the main road / highway.
- Approach road to warehouse.
- Delivery vehicle movement.
#Type of warehouse:
There are different types of warehouse. Some have RCC roof and are fully constructed with civil work. Some are combination of RCC / Civil work and PEB (Pre Engineered Buildings) and some are complete PEB Structures.
- Consider the type of construction of warehouse
- Civil + RCC
- Civil + PEB
- PEB + RCC
- Height of warehouse from center and side.
- Width of shutter and number of shutters
- Floor loading capacity per sq. meter. (Specially need to consider if the material is heavy)
- Security of warehouse (Manned OR CCTV Surveillance)
- Water and Power availability
- Distance from key establishments like hospital / police station / bus stop / nearby village etc.
- Transportation and Logistic service providers.
Once all the above points are taken into consideration you are almost set to start your business. You have to be mentally prepared to face the unforeseen circumstances which come with every business. But, if the basic principles of business are followed the chances of failure are very less.
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