How to Start a Profitable Fleet Management Business?
Updated on Mar 11th, 2023
Are you someone who is planning to start a new business? Or are you already engaged in the telematics industry but wanted to upscale your fleet management business? Whatever the case may be, investing in fleet management is the best choice one can make in these hard pandemic times. Why? We will give you reasons for this!
- The fleet management market was at 13.78 billion US dollars in 2017. This figure is expected to rise to almost $28.66 billion by the year 2022!
- The dedicated fleet management systems will generate a market of approx $30 billion in the global market by the end of 2022!
- The global vehicle telematics market was already around 64 billion US dollars in 2019. This number is expected to reach $103 billion by 2022!
As evident, fleet management or telematics business has become a future-proof idea that ensures better ROI and guaranteed success. Even if you have no experience in the transportation industry, then also you can ensure a successful and profitable fleet business in less time as compared to the other businesses of the global market. How? With the right set of workers and with a right technology partner!
However, there are many people who still require some kind of expert guidance and technology help to start a successful fleet management business. That’s we, today we have brought you the most seamlessly; strategy on how to start a fleet management business in 2020. So, without wasting any further time, let’s start over!
1. Understand your Business Goals
To start with, you firstly need to understand the main reason for investing in a fleet management business. For that, you will be needing a comprehensive business plan. A detailed business plan will have all the outlines of the work that you will be doing in the next 2-4 years. Even your financial partners will not approve anything before they see your final business plan!
So, for a clear understanding of your business goal, and to frame a proper business plan, you need to ask some questions from yourself. For instance:
- What exactly are you planning to do and how will you do it?
- What will be your target audience and how will your services benefit them?
- How will you manage the expenses of your fleet management company and whether you will purchase or lease the trucks.
- What will your marketing plan look like? Are you planning to involve any digital marketing strategy as it is much needed in today’s digital world!
- Lastly, from where will you hire your workforce? Will you directly hire them or will you contact an organization that provides drivers and managers on a contract basis?
Once you answer all these questions, you will have a perfect business plan ready at your end. Then afterwards, you could seamlessly connect with your finance partners to talk about their investments.
2. Fulfill all the Regulatory Compliances
Almost all the business needs to follow a certain set of rules to smoothly operate in the global market. Sometimes these compliances are from the state government, or sometimes from a global organization that manages all the organizations of your niche. You need to take care of all the regulations that are supposed to be in the fleet management sector.
The rules generally include getting your USDOT number from the US state government to operate your fleets across various geographical locations. Moreover, you will also be needing International Fuel Tax Agreement and BOC-3 filing to register your company’s agent in case of any legal proceedings.
Additionally, in these hard times, you will also be needing a complete healthcare insurance and medical certificates of your truck drivers to ensure proper protection from any cautious disease.
Read More: Top 12 things to Consider When Investing in a Fleet Management Software
3. Choose the Right Fleet Management Software
Now here comes the most crucial aspect of your fleet management business. Gone are those days when fleets and transportation businesses used to handle their operations manually. Today is a digital era, and everything is becoming fast and mobile. So, to match this fast-paced world, you will also need to have proper strategy and automated tools in your hand. A dedicated fleet management software is what you will be needing!
With a proper fleet management system, you will have no worries of what your drivers are doing, or what routes they are taking, or even how often your fleets require the maintenance. Everything from start to end could be handled by a scalable white label fleet management software.
Driver behaviour, mobile access, fuel monitoring, maintenance, electronic inspections, and even panic alerts, a white label fleet management software has got all these functionalities that makes your fleet management a seamless task! Apart from that, you will also save a lot of cost and time by automating all the crucial tasks of your fleet managers. Route optimization will not only help you save the time of your drivers, but will even ensure less fuel usage.
Similarly, preventive maintenance features will help you get the true value of your vehicle in no time. That will eventually help you to decide whether to repair the vehicle, exchange it, or sell it at best possible time!
Need more information over white label fleet tracking software? Have a look at our fleet management software development services today!
Additional Resource: Top 10 features the best Fleet Management App should have
4. Hire Dedicated Employees
Once you have decided how things will work and what all things will be automated, it is now time to hire dedicated fleet managers drivers for your fleet management company. Now, here you have two major options – either you directly employ the drivers and fleet managers all by yourself, or you contact any hiring firm that provides you the employees for your fleet management business on a contract basis.
Each of the two approaches have their positive and negative aspects. For instance, if you hire the drivers, you will have to provide them the fleets to drive and will have to take care of all the trucks all by yourself. Moreover, if by any chance, the fleets get misplaced or stolen, then it will be on you to provide a new truck to your driver. In such a scenario, it is best advisable to hire subcontractors or independent drivers. Why?
That’s because they will have their vehicles and at the time of any mishappening, you will not be solely responsible. The only thing would be that you will have less control over them and you have to pay them a higher fee. However, to eliminate any mishappenings or to monitor the behaviour of your drivers, you could again use a fleet management software.
A scalable fleet management software will seamlessly integrate with the dash camera of your fleets and will provide you all the updates of your drivers like sudden brakes, high speed, frequent brakes, etc.
5. Optimize your Operational Costs
The next thing to consider while starting a fleet management business is to optimize your operational costs. Now, there are many instances where manual tasks consume more than the required resources and as a result your operational cost rises. So the best way to eliminate all such wastes could be to automate your fleet management operations. How? Again the answer is the same – with a dedicated fleet management software!
For instance, if you bid too high for delivering the parcels, then you may lose the chance of getting the right customers. On the other hand, if you charge too low, then it may question your credibility. So, anything you could do? Yes, leverage the perfect technology solution to get the right metrics to track.
Fuel costs, maintenance cost, insurance, salaries, and other office expenses are some of the major operational costs you need to consider while framing the best delivery charges. A fleet management software is the best solution to track all the above costs and get a perfect delivery charge. With a proper fleet management software you will not only have all the vital data in your hand, but you will also be able to optimize your business expenses quickly and efficiently.
6. Have Sufficient Financial Resources
Finance is the backbone of every business and fleet management industry is no exception. Before initiating any sort of work, you need to ensure that you never run out of money, at least during your initial months. You should have proper arrangements of the funds to smoothly operate your fleets and manage all your employees.
Remember that, during the initial few months, you may not get all the orders and payments quickly. Chances are that you may have to wait for like three months, or four months or even a year in the worst case scenario to get the payments from the vendor. In such a case, you cannot hold the fleet’s expenses or your fleet manager’s salaries. So, better ensure that either you take advance payments from your customers right from the beginning, or at least arrange some sort of economic resources to manage your fleet operations.
7. Automate Your Back-End Operations
After starting your fleet management business, you will slowly come to know about various back-end tasks that may not seem tedious at first, but will surely consume much of your time! Tasks like payroll, monitoring of vehicles, timely inspections and solving the various driver’s issues at the correct time are some of the back-end operations.
Additionally, regulatory compliance, dispatching, accounting, invoicing, maintenance scheduling, and other admin tasks are also back-end operations that consume a lot of time. Even a small error in any of these operations could result in delays, money wastage, and hindrance in employee’s effectiveness. So, to eliminate all such issues, you should timely nautomate all your back-end operations.
Also, if you have chosen the correct development partner, then they can even integrate all such modules in your fleet management software. An experienced software engineering firm has all the required resources and tools to make your business operations smooth and cost-effective.
Read More: COVID-19: Using Fleet Management Technology for Fleet Safety
8. Analyze your Business Outcomes
Last but not least, you should always analyze your business outcomes and profits on an annual basis. Conducting internal audits and external audits is always a great way to ensure that everything is going as per your business plan made during the initial days of your starting of business. Additionally, keep track of all the payments and orders received so far, and also manage all your employee’s day-to-day details.
Leaves, delays, or even any holidays should be considered during the salary disbursements. For that you can adopt a payroll software to manage each and every little detail of your employees. Furthermore, to track any payment from your vendors and customers, you can even use the same payroll management software within some additional accounting features. Consult an experienced software development firm to get more ideas on this!
Let’s Start your Fleet Management Business with Matellio!
So, those were some of the crucial points that will help you to start a successful fleet management business. To conclude, we can say that the pandemic time has impacted a lot of businesses, but the fleet sector did not have any effects on their operations. As certain, the fleet management business benefited a lot even after the complete lockdown, due to their vital tasks to deliver the essentials to the stores and hospitals.
That’s why, fleet management or telematics is the best sector in which you can invest to earn better profits and to future-proof your business. Need expert guidance or technology solutions for your fleet management business? Whether you are looking for more or wanted to ask certain questions. We are always available for you! We, at Matellio, have got fleet management experts that can solve all your queries and can guide you to better automation techniques in no time. So, what are you waiting for? Connect with our experts today. Plus get a free consultation on your first visit!
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