With more than 6 million small businesses in the U.S., it’s easy to fall into the trap of thinking that there isn’t room for one more. It’s almost guaranteed that there will be competition, and in an industry like fleet transportation, going head-to-head with other small companies, never mind the “big guys,” you might think that you don’t have any chance of being successful.
It doesn’t help, either, that new entrepreneurs are often encouraged to think big and avoid limiting themselves, but the fact is that when you do the same thing as everyone else and try to serve an entire market, you face more competition. However, there is a saying in business that you should do one thing and do it well. Specializing and finding a niche market to fill is almost always a better approach to starting a business than attempting to be all things to all people.
Why You Need a Niche
There are several good reasons that you need to find a niche for your fleet business.
- A niche guides the development of your business. The market you plan to service determines everything, from the type of equipment you purchase, the staff you hire and the fleet management software you use to the routes you travel and the rates you charge. Because there are so many variables to consider, focusing on a specific market niche makes some of those decisions easier.
- Stand out from the competition. There is plenty of competition in the fleet transportation industry. When you choose a niche, you can work toward becoming the authority within that segment, while also providing a service that no one else offers.
- Easier to market. When you work within a specific niche, it’s easier to describe what you do, which in turn makes it easier to market your services. For example, if a local farmer is looking for a company with refrigerated trucks to transport his products, searching for a local trucking company online will return a wide range of services. However, if you offer refrigerated trucking in a particular region, someone searching specifically for that term is more likely to find you. Having a niche also makes it easier to identify your customers and market yourself to the businesses that are most in need of your services.
- Potentially recession-proof. Serving a specific market niche, such as fresh food transportation, is less likely to be affected by market factors like recessions as there will continue to be a need for such goods, whereas general trucking companies may see significant market shifts depending on the economy.
- Higher revenues. Depending on your niche, you may be one of only a few providers in the area, which allows you to charge higher prices. It’s much like being referred to a specialist when you have a medical issue; a physician with training and experience in a specific condition typically charges more than a general practitioner — and it’s no different in the fleet transportation industry. Keep in mind that some of those revenues may be offset by the need to invest in specialized equipment, but in general, specialized transportation companies charge more than generalists.
Determining Your Niche
So how exactly do you go about determining your niche? It’s really no different within the fleet transportation industry than in any other. For starters, you need to look at the market conditions, determine your competition and who they serve and what you can do to differentiate your business. In the transport industry in particular, you also need to look at the availability and expenses associated with equipment, drivers, specialize training and permits and other factors associated with that particular niche.
It’s also vital to avoid becoming too specialized. Otherwise, you risk entering a saturated market or finding that your chosen specialty doesn’t have enough demand to be profitable. Some of the options to consider might include transporting refrigerated goods or hazardous materials or providing for-hire or courier services. Regardless of the specialty you select for your trucking business, though, keep in mind that you need a solid business plan and enough perseverance to keep going. However, determining the right niche and filling that need is the best place to start.