Three small business ideas that exist within the SA transport industry value chain
OCTOBER is Transport Month. It’s dedicated to raising awareness around road safety and the economic importance of the sector and looking at how local and global developments are driving change in the industry.
For people interested in starting a business, Transport Month provides the ideal opportunity to home in on the industry’s value chain and the emerging opportunities that exist for aspiring business owners.
This piece explores three lower-investment opportunities within the transport sector, as well as the challenges that lie ahead for entrants to the market. Express courier company
The e-commerce boom, triggered by the pandemic in 2020, led to a sudden upsurge in the demand for courier services. Post-pandemic, the trend is showing no signs of slowing.
More specifically, according to the South African Express Parcel Association, the express parcel industry is the fastest growing transport-related sector.
Consumer appetite for quick shipping turnarounds or 48-hour deliveries has increased, creating opportunities for entrepreneurs to start home delivery businesses. The biggest challenge that aspiring entrepreneurs will face when entering the sector will probably be sourcing funding to cover the cost of the first vehicles, Gps-technology, uniforms, marketing costs and insurance.
The success of an application for small business funding in this sector rests largely on the thoroughness of the business plan and a clear breakdown of how the funding will be spent. Owner-driver training provider The owner-driver concept first entered the South African market in the mid-1980s and experienced a boom, with the advent of technology such as Uber. In these models, employees own the vehicles they use to transport people and goods and have the opportunity to become formal business owners.
Several owner-driver programmes to encourage job creation in this sector have been launched by key industry players such as SAB and Mondi. This has opened a new ecosystem for aspiring entrepreneurs, specifically in relation to driver education and training. Programme facilitators will need to partner with training providers for soft skills such as financial acumen, customer service, sales as well as health and safety.
The biggest challenge for small businesses in this arena is sharp competition, particularly in terms of pricing. Here, operational efficiency and customer service will need to be prioritised in order to remain competitive and profitable.
Waterless car wash
The Cape Town water crisis of 2017 saw many car wash services across the city iterating their offering to include waterless options. A few years after this disaster brought the reality of water scarcity to the fore, the impact of climate change has reawakened the demand for more sustainable business models.
This has created an opportunity for pioneering entrepreneurs to start ecofriendly and environmentally conscious car washes. A mobile, “green” car wash business that provides a house-to-house, on-demand service, for example, could serve as an attractive differentiator in the market.
Entrepreneurs who wish to start their own green car washes will probably be faced with the challenge of sourcing, testing and learning about new technology.
Although there are multiple entrants in this space, waterless car wash technology will probably develop in leaps and bounds in the years to come. The challenge for entrepreneurs, therefore, is finding the most cost-effective tech solutions and then, keep abreast of developments in the sector in order to remain competitive.