Setting your sights on the higher end of the market can work wonders for your business, but you also run the risk of limiting the scope of your potential customer base.
Scott Carson knows what’s at stake when you position your business in this way, having experienced it firsthand with his own venture. Luckily, he managed to turn it around just in time.
Carson is the founder and director of Only Logistics, a Sydney-based transport and logistics company, which has been operating since 2010.
Only Logistics commenced as an Australia-wide service for existing business owners and managers seeking to sell or acquire businesses in the industry.
In 2011, the company expanded its service offering to allow self-employed owner-drivers and subcontractors to advertise their arrangements, in addition to allowing courier and transport companies to advertise subcontract fleet, franchise or casual positions within their businesses.
Despite this progress, Carson can easily recall a mistake that almost cost him his business.
“Concentrating too much on the higher end of the market [was a mistake], ie. medium to large transport companies and 4PL providers,” Carson says.
“This limited the scope of our potential market to under 4,000 nationally.”
Within its first six months of operation, the company was experiencing a lower take-up of listings of businesses for sale. Luckily, Carson recognised his mistake and made changes.
“I thought, we’ve got the concept right so let’s go down the pyramid, where the businesses might be smaller but there’s a larger number,” he says.
“We undertook a complete review of our strategy and the transport business ‘sale’ market.”
“We then replaced our website with a service that now not only provides listing services for transport business owners seeking to sell their businesses, but also provides opportunities for self-employed transport operators to list their contracting arrangements, and for courier and transport companies to be able to list self-employment opportunities that exist within their fleets for subcontractors.”
The company developed a feature within its new website that allows listers to follow a step-by-step process to list their business for sale or list self-employment opportunities.
According to Carson, this includes a mix of free text and mandatory data and text fields, with the latter being transport-specific.
“The end result being a better quality listing with relevant information for viewers, rather than the lower quality and unstructured content that we continue to see on competitors’ websites,” he says.
“We also improved our eCommerce facilities on the website to facilitate lister payments for their listings to be SSL certified.”
With four staff on board, the business has a conservative revenue estimate of just over $100,000 for 2012, with a minimum growth rate of 20-25% each year for three years after that.
Carson says there are three major lessons he learnt throughout this process, including the importance of identifying target markets, and listening to customer feedback about the business.
“Also, to allow a restricted ‘free listing period’ to allow for the website to be populated and recognised faster than charging from day one,” he says.
“The plan is to make it the most relevant website for transport and logistics operators… The challenge is to continue to build our relevance in the market.”
“The service suits anyone, from a little transport company servicing the mining industry in Port Hedland right through to a container operator in Tasmania or a transport business running Sydney and Melbourne.”