Starting your own transportation business can be a lucrative option
Starting your own transportation business can be a lucrative option
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How to start a van transportation business

Sometimes the best ideas can be the simplest and most obvious. The transportation business is certainly not new, but it provides a service that’s always in demand. Your own van transportation business could be a good way to make extra money, or even become your main income stream.

The exact details of setting up your business will vary depending on what exactly you want to do. The regulations for transporting cargo are obviously rather different from those for transporting people. Whatever corner of the market you choose, some basic facts will apply. Here are a few tips on how to start your van transportation business.

Becoming a man with-a-van…transportation business

People will always need removals services or one-off deliveries. The e-commerce of eBay and other online markets, the need for qualified people to take care of transporting goods has only grown. Transportation is a straightforward business prospect and a comparatively simple sector to get started in, with relatively low barriers to entry and limited initial outlays. If you're proactive and plan carefully, a man-and-van business can be a very practical option.

As with any business venture, you will need to go over essential first steps, including writing a business plan, determining how to finance your business van and whether to register as self-employed or as a company.

Concretely, the first thing you’ll need is a valid driving licence; all full UK licences showing Category B cover cars and vans up to a maximum gross vehicle weight (GVW) of 3,500 kg, including up to 8 passengers.

The right vans for transporting people or goods

Next up, of course, is choosing the van that’s right for you. That will largely depend on whether you focus on transporting goods, or people.

Medium-sized to large panel vans like the Renault Trafic or Renault Master will be more than adequate for virtually all your straightforward haulage and/or removal needs. Both vehicles also come in Crew Van and Passenger Van variants, giving you plenty of options for transporting people and cargo alike. A car-derived van like the Renault Kangoo can be an ideal choice for courier-type businesses, especially for working in or around urban areas, as they offer plentiful storage space as well as manoeuvrability. If you are still working out which specific business you’d like to launch into and/or the best kind of van, check out our list of 10 ideas for transportation business you can start right now for inspiration!

Not exactly a business you can do on foot
Not exactly a business you can do on foot

Company status and finances

If you intend to run your small business largely by yourself, or don’t plan to hire any employees, you may not need to register as a company. You may simply need to register as self-employed in order to pay Income Tax, and you will only have to fill in a tax return once your untaxed income reaches £2,500.

While you may decide to register for VAT voluntarily, you probably won't be legally obliged to unless you reach the current VAT threshold (£85,000 as of 2017). Registering for VAT can be advantageous if you are trading with larger companies and other VAT-registered entities, such as healthcare centres, hotels or wholesalers.

Make sure you have the right insurance

By the nature of your van transportation business, you will require commercial van insurance to operate your vehicle. Make sure your coverage meets all legal requirements and can provide for all real-life eventualities.

In addition to insuring your transportation vehicle, you will need to insure what you are transporting. This is covered by Goods-in-Transit insurance, which is intended to cover any damages to or loss of the goods you transport, whether your van is broken into or they are damaged in transit. You should also look for an insurance product that includes Public Liability insurance; this will be slightly more expensive, but the relatively small extra cost will give both you and your potential customers peace of mind. Being able to advertise yourself as “fully insured” can garner you additional business. These covers are often included in various kinds of Hire and Reward products.

Special considerations regarding passenger transportation

You may need a special kind of licence depending on the number of passengers you carry and how they are charged. If you are driving a vehicle that is available for hire to carry up to 8 passengers, you will need to apply for a Private Hire Vehicle (PHV) licence for your vehicle. Specific criteria apply depending on where you plan to operate the vehicle in question, for instance concerning advertising your services.

A Public Service Vehicle (PSV) licence is required in two circumstances: to operate a vehicle carrying 9 or more passengers in exchange of payment, and to operate a vehicle carrying fewer passengers but charging them separate fees for the journey. There are different types of PSV licences, so make sure to obtain the one that is appropriate for your specific business.

You will also need additional insurance, as your coverage needs will be different. Besides the basic insurance required by law, you should invest in Hire and Reward coverage and Public Liability insurance. It is advised to choose a product that will cover your passengers’ personal property against damage, and which will cover you in the event that one or more of your passengers decides to seek compensation for an injury sustained while traveling on your vehicle.

Promoting your van transportation business

Once you're properly licensed and insured, you can start advertising your services. There are plenty of options online, from classified ads websites to e-commerce platforms, where users will often require delivery services. Don't neglect traditional media such as small ads and notice boards. Check with local newsagents, convenience stores, supermarkets, etc. Sometimes a block of flats or a small housing estate will have a community noticeboard that you can use (ask permission first).

In some areas, additional transport options can be a strong business opportunity
In some areas, additional transport options can be a strong business opportunity

For passenger transportation, focus your promotion in places where your target market is likely to see it. As well as advertising in shops, post offices and small ads, you could also consider promoting your transportation service in areas with a large population of families with school-age children or seniors. If you're near a university or an area with a significant student population, concentrating your promotional efforts there can be very effective. Students often need to move backwards and forwards from home or between locations on campus. As well as being a reasonable source of income, these kinds of small jobs are a great way to gain experience and build your connections and customer base.

Depending on the network you develop, the orientation of your business or your specific affinities, there are many different services you could specialise in. Transport for people with mobility issues is a growing industry, and it may be worth your while to specialise in non-emergency medical transport and/or setting up your van to accommodate these passengers with reduced mobility. For the transport of goods, check out our advice on setting up a profitable delivery business.