How To Start a Transportation Business in California

When it comes to transportation businesses, there is ample opportunity for new entrepreneurs to break into the space. Starting a transportation business in California is a good opportunity for those looking for that type of work. We'll cover the benefits of starting a transportation business in California, how to register and obtain a business license, and some tips on growing your new transportation business.

The Benefits of Starting a Transportation Business in California

Generally speaking, a transportation business is any business that involves transporting goods or people. A few examples are produce shipping companies, or bus tour companies. Either one would fall under that category of "transportation business." California is a wonderful place to start your business because it has a lot of different opportunities and needs for both shipping goods, or for transporting people due to the tourist industry.

Additionally, California has a pretty well-developed infrastructure for transportation businesses to make use of. There are a lot of opportunities and different types of transportation that you can explore in California too. So it's likely you'll be able to find your niche in a market that can sometimes feel oversaturated.

Decide on Your Transportation Business Niche

Before doing anything else, decide what type of transportation business you want to start. You can think of the various transportation businesses as falling under three categories: personal transportation, passenger transportation, or commercial transportation. Think of personal as things like bike rentals, boat rentals, taxi services, limo services, and the like. While passenger transportation would involve things like bus tours, employee transportation, ferries, and more. Then you have commercial which would involve transporting goods, like food, retail items, livestock, and similar items. Once you decide on your niche you'll have a better idea of how you should register your business.

How To Register a Transportation Business in California

If you want to start a transportation business in California, you'll need to register your business. You've got multiple options for your business each with its own benefits and drawbacks so consider wisely. It would also be best for you to consult a professional before choosing a business entity and registering your business in California.

If you're going into business with someone else, maybe a limited liability partnership is the way to go. Going it alone? Then a limited liability company might be right. Whatever it is, weigh your options before choosing. Then file the appropriate forms with the Secretary of State's Office. You'll also want to make sure you register your business with the state and get an employer identification number, or EIN. This can usually be done online fairly easily but it is an important step nonetheless.

How To Obtain a Business License For a Transportation Business in California

In addition to incorporating your business and registering with the state, you're going to need a license. No, your regular driver's license probably won't cut it for your new business. To operate a transportation business in California, you'll need to obtain a business license from the California Department of Motor Vehicles. The Motor Carrier Services department of the DMV can help guide you as to which licenses you'll need for your transportation niche. Obviously, those driving large freight shipments will have different requirements from those renting bicycles. Be sure to meet the requirements for the type of transportation business you plan to open. Again, we always recommend consulting a business professional to help with these types of decisions and paperwork.

It's always good to have basic information about your business at hand when doing this type of registration work too. This information includes your business name, address, contact information, a description of your business, and what type of transportation services you'll be offering.

How To Grow Your Transportation Business in California

First things first when growing your transportation business: You'll need vehicles of some sort. Whether that's bikes, taxis, or buses you're going to need to build your fleet of vehicles for your business to grow. Once you've got that you can worry about growing your business in other ways. Like with online booking or with private contracting.

Remember that you will be limited by the vehicles and the drivers you have in most scenarios. If your business is operating with one bus running tours in Napa Valley, you will be limited by how many tours that bus can do at any given time. And if you're your only driver, you'll be limited by your personal time too. So growing in employees and in equipment are two of the first areas you would benefit most from growing in early on.

The Challenges of Starting a Transportation Business in California

Starting a transportation business in California can require quite a bit of capital, equipment, and going through legal red tape to begin with. The state has regulations regarding the operation of transportation businesses for you to navigate before your business is up and running. Make sure you understand all the regulations before you start your business. Otherwise, you could be fined or even shut down. Definitely consult a legal and tax professional when setting up your new business.

In Summary

Starting a transportation business can be a lofty but achievable goal. But you've first got to decide your transportation niche. Will you be driving a taxi? Tour buses? Freight trucks? Once you've got that down you can move on to the nitty gritty of working through the regulations the state of California has for transportation businesses. But with a goal in mind, and a want to succeed you can get there!