How to start an HGV agency
If you’re an organised individual, able to drive and interested in getting goods from A to B, you should consider starting an HGV agency. Learn how here
When you think about a heavy goods vehicle (HGV), you may think it’s all about the massive lorries that haul goods throughout the UK, or even across different countries. While that is one type of HGV, there are many more – for example, if you get a supermarket home-delivery, then chances are that truck is classified as a HGV.
We’ll provide you with a step-by-step guide to starting your own HGV agency. By that, we’re referring to a logistics business that specialises in HGV transport.
You should have the knowledge and traits outlined below:
- Driving ability – you’ll need to have the licence and skill to drive a HGV, particularly in the early days when it’s likely to be you driving and running the business
- Organisation skills – managing a rota of routes as well as incoming and outgoing goods and vehicles requires you to be highly organised to keep to a schedule
- Tenacity – you’ll need to be focused and determined to grow your customer base, especially to gain contracts from national retailers
While it’s possible to start a HGV training company or a HGV recruitment service as separate businesses, you’ll need to know about, and offer, a combination of these in order to run a successful HGV agency, so we’ll touch on them too.
In this article, we’ll cover how to:
Now you’ve learned what the focus of the article will be and what characteristics you should possess, we’ll go straight into starting the process of setting up your own HGV agency.
1. Research the UK HGV agency industry
Once you’ve decided that you want to set up an HGV agency, your first port of call needs to be spending some time researching the industry in the UK.
With a need for HGV drivers, starting an HGV agency that offers training and services means you can tap into that demand, and offer a service that supplies it too.
Similarly, the industry can be dominated by a few major companies, so offering an alternative is a way of disrupting the market and allowing you to find a niche for your business (more on that in the next section).
Resources for research include:
- Search the internet – browse online for HGV agencies and training to discover what companies are currently operating in this sector. Similarly, learn more about what necessary knowledge and requirements are to run this type of business
- Read trade publications – newspapers and magazines that focus specifically on the logistics industry and/or HGVs can be a rich resource to help you understand the industry better
- Speak with drivers – drivers spend the most time in the vehicles, on the routes, making deliveries and so on, therefore are most likely to know what the successes (and pain points) of the industry are
2. Find a niche
To make your business stand out and differentiate it from competitors, you’ll need to find a niche.
Review similar businesses in your area to see what they’re offering – and what they’re not. Similarly, see if there is a particular customer base that’s not currently being catered for.
There are a number of types of specific services you could focus on – for example:
- Experience – you could opt to work with only newly qualified drivers, or conversely with those that have many years experience
- Location – you may want to aim to operate in multiple locations across the country, or the alternative is focusing on a specific region
- Sector – if there’s a particular need for HGV transport in a certain sector (such as retail, industrial or agriculture) consider specialising in this, or offer a general service
- Eco vehicles – consider getting vehicles that have as low emissions as possible and so position your start-up as an environmentally aware company
3. Create a name and brand
Choosing a name and brand for your business is a crucial step – get it right and you could become a household name; easily recognisable and well-known. Get it wrong and the effects can be time-consuming and difficult to repair, so it pays to focus on this in the beginning.
As your business name is likely to feature on your vehicles and marketing material (see below), plus often be the first impression that potential customers have with your business, make sure it reflects your company’s vision and values.
Similarly, this extends into your brand too, which encompasses all aspects of your business – it’s your corporate identity, essentially. For example, this is reflected in:
- The design of your staff uniforms
- Which vehicles your company uses
- The format of your business email addresses
- How the receptionist greets visitors to the office
- Your company name – some examples are Driver Hire, Milestone Operations and Global Solutions HGV
4. Write a business plan
A business plan is an essential document to have – not only to outline your vision for your company, but to ensure you stay on track and meet the goals and targets you outline in the beginning.
In addition, if you apply for business funding, it’s likely to be a required document to support your application.
So what exactly is included in a business plan and how do you write one for an HGV agency?
- Goals – where do you expect your start-up to be in a certain number of years? Try planning for one, three and five years into the future – think about how you want your business to develop and what it’ll look like then. For example, if you begin your HGV agency as a local operation, you may consider expanding to offer nationwide logistics services in time.
- Projections – finance and cashflow are a vital part of a thriving business, so planning for these will mean thinking about sources of finance and types of revenue streams, as well as financial forecasts. A key consideration in logistics is likely to be time of year, so you’ll need to plan able to plan for both high and low seasons.
- Target audience – knowing who your potential customers are and how to reach them is a key part of a business plan so research this carefully. Assess which HGV services are currently available on the market, as well as which audiences are – and aren’t – being catered for.
Download a free business plan template here.
5. Research equipment and costs
When you’re starting your own HGV agency, there are a number of costs to consider. These will include:
- Premises – will you rent or buy a location? Will a month-to-month or a fixed lease suit your business better? Where do you want to be located? The answers to these questions will impact on the amount you’ll need to budget for this
- Vehicles – the HGVs will be essential to run your business, so choose wisely which models and makes to go for. As buying HGVs outright can mean spending thousands of pounds upfront, it may be more suitable to hire or lease the number of HGVs you need to start with, and as your business grows, you can think about purchasing them
- Training – you’ll need to factor in the costs for the training courses and tests to acquire the relevant licences and certification
- Insurance – it’s vital to have the correct insurance policies in place, just in case the worst should happen. This is likely to include building, contents and employers’ liability insurance policies
The costs for HGV class 2 training can vary, depending on where in the country you learn, as well as what previous relevant driving experience you have.
Note, penalties for overloaded vans can pose an unexpected cost. For more information, read this guide on the legal limitations to what your van can carry and how to avoid costly fines for overloading.
On average, you can expect to pay between £1,000 – £1,600 for the training, assuming you have no prior HGV driving experience.
Note that some HGV class 2 training courses include the test fee in the overall tuition price.
6. Complete training
Having the relevant training and licencing is essential for an HGV agency, whether you want to drive the vehicles yourself or you’re going to offer training to staff members.
HGV class 2 training: What do you need to know?
A HGV class 2 (also known as a Cat C) licence enables you to drive rigid trucks over 3.5 tonnes and up to 32 tonnes.
The majority of HGVs are manual vehicles, although automatic models are a possibility. Generally, a manual licence is required. Plus, like with cars, holding a manual licence enables you to drive both types of manual and automatic vehicles. Whereas with an automatic licence you can only drive automatic vehicles.
Note that you may see courses refer to Large Goods Vehicle (LGV) training. This is also used to refer to HGV.
You must have applied for your professional HGV licence and passed the theory tests before you can do the practical course and test.
After completing HGV class 2 training, you can drive small- to medium-sized trucks, such as those used for local deliveries, as well as those used for removals and haulage.
The Cat C licence is seen as the entry-level licence for driving such vehicles. In time, you may want to consider taking/offering additional training, which means you can increase the weight limit and size of the trucks you (or your staff) can drive and offer to customers.
Similarly, being able to operate a forklift is another driving skill you could consider, so that your business can offer services on the road and in the warehouse.
EU licence holders
In order to complete the process above, EU licence holders will have to do some additional paperwork at the beginning.
This is relatively straightforward and involves completing a D9 form to register your license with the Driver and Vehicle Licensing Agency (DVLA). Then a D91 form will be sent to you in the post to confirm registration of a document. You’ll need to bring a physical copy of this with you to begin training.
7. Consider pricing
Knowing how to price your company’s services correctly is a crucial step, and it’s wise to get it right as soon as possible.
On the one hand, if you go in too low you could forever be playing catch-up to other competitors in your sector, plus potentially make people wonder how you get the prices so cheap without comprising service.
On the other hand, if you start off with high prices from the outset, it doesn’t leave you much room to manoeuvre as the cost of supplies and labour increases with time.
Here’s a guide to the essential factors to work into your business’ pricing strategy:
Vehicles – work out how much your vehicles cost you per day, month and year, plus think about any repayments you’re expected to make (or initial outlay) and consider this when you set price points for jobs.
Fuel – after your vehicles, fuel is likely to be one of the biggest expenses for a HGV agency. In addition to factoring in diesel costs to your pricing, you may want to use fuel cards to help keep prices down.
Staff – your employees’ skill and knowledge will contribute to the prices you set for your company’s services, particularly for drivers who are transporting items.
Time – how long each job is going to take should be factored into prices, along with what is being transported. For example, high-value or high-risk items may require specific expertise or specialist equipment.
8. Find premises
An HGV agency will require sufficient space, so consider how much area for parking vehicles (as well as an office) your business will need when choosing premises.
The key factors to consider are:
- Location – is the premises close enough to motorways and other transport hubs? Is it an area with competitors or similar businesses (or not)? Would it be easy to find for staff and customers?
- Cost – the price per month is likely to be at the forefront of your mind as a small business owner. Consider what’s included in the rent (services such as cleaning, maintenance and security) as well as what you may have to budget for separately
- Size – does it meet your business’ requirements for now and in the future? It could be more cost-effective and less disruptive for your company to ensure you have a premises that can accommodate your staff, vehicles and equipment for the long-term
You can find more tips on setting up your office space here.
9. Get customers
After taking the above steps, you’ll need to find customers to use the services your business is offering. We suggest a mixture of the following points:
Sign write vehicles
With your trucks being out on the road all day, every day, your vehicles offer a significant advertising opportunity.
Sign write your vehicles with your company name, logo and contact details. Ensure the information can be seen clearly from a distance, as while your lorries may be regulated to a certain speed, other drivers may be whizzing past in the fast lane.
Also, be sure to make the contact details quick to remember – a short, punchy email address or a memorable special business telephone number are ideal.
Your business needs a website – fact. Not only do customers want to find out more about your company with a few clicks, a website shows that your company is professional and a serious competitor.
In the early days, you can use website builders to cheaply and quickly create your own site – this will include the basics such as contact information, location and some details about your team and what services your business offers.
In time, you may consider hiring a web designer to create a more complex site with high-end design and added functionality – such as online enquiry or booking forms. The features and functions you decide to include will be based upon your website strategy and business’ needs.
Having an online presence also extends to social media platforms. While there’s an array of networks to choose from, consider concentrating on a few that really connect with your business’ goals and vision, as well as the ones that are most likely to be a source of potential customers for you.
If you haven’t already, set up a LinkedIn profile – this allows you to showcase your skills and expertise, as well as promote your start-up. You can join discussions and groups relevant to your industry and start to position yourself (and your business) as an authority in your field.
Another social media platform to try is Facebook – more and more businesses are connecting with customers through this network, as well as offering a quick, easy and informal way to reach potential customers and answer queries.
With HGV driving being an industry dominated by more senior workers with many years experience behind them, use this as a resource for finding new customers. What better way for a potential customer to hear about your business than from someone who has been working in the industry for decades?
In addition, as your company grows, you can get referrals and testimonials from customers about why they chose your business to add to your website or other promotional material.
While digital is playing an ever increasing role in promoting companies, businesses can still tap into the benefits of traditional marketing, especially in an industry such as logistics.
Create printed flyers – these can have similar content as the signs on your vehicles, with the addition of some testimonials or images. Distribute them wherever relevant, such as at a networking event or trade association meeting, or even hand them out door-to-door in business parks and other locations.
Plus, it could be worth taking out an advert in a newspaper or a magazine, especially if it’s an industry-specific publication that key decision-makers are likely to also read. The idea here is to get the word out about your business, and as to many people as possible.
For more information on how to promote your business, follow this link.
What are the next steps?
In this article, we’ve provided you with the essential information you need to start your own HGV agency. This includes understanding the HGV class 2 training that drivers need to have, as well as how to find drivers and suppliers to work with.
Finally, remember to bear in mind potential penalties that come with having an overloaded van. Here’s all you need to know about penalties for overloaded vans and what the legal limits are.
After learning what you need to do, the next step is to apply this knowledge and actually start your HGV agency – good luck!