What you need to know:
- Invest in excellent employees and avoid setting the bar as low as the ability to drive and follow directions.
- Your drivers will need the relevant driver’s licences for different trucks and require training to handle driving in hazardous situations, such as storms and heat waves.
Sudhir Balsure came to Uganda in late 2009. Prior to that he worked for a multinational logistics company which wanted a salesperson in Uganda, so he was posted here, from Zambia.
He had also worked in Bombay, India. After working with the company for 12 years, he felt ready to embark on his entrepreneurial journey. In 2015, he stepped out of employment to anchor a career as a businessman.
His wife was an accountant with one of the leading commercial banks in Kampala. He talked to her and asked her to become the financial controller of the new company.
“I always had a dream and vision of becoming an entrepreneur. It was risky leaving a well-paying job to venture into doing business. That meant that I was no longer going to get a monthly pay. When I took the decision, I did not know where I was heading with my dream,” Balsure recounts.
He adds, “In 2013, I saw an opportunity to start a dry ice company. The product was imported from India, and I thought that I would exploit the void by doing the business. In 2014, I went and did research about the product.”
He started on the notion that you never start a business unless you have everything, so he bought the machines that make dry ice.
It was the first mistake he made as a businessman. “I imported everything and invested all the money in buying the machines to make dry ice because I was excited to go into a business that was virgin in Uganda. I was the only one that had invested in it at the time. I did not have expertise. I did not have people on the ground, and I was clueless so that is where and how I made losses,” says Balsure.
The take-off was shaky. A year into business, he made a loss of close to Shs100m.
Despite the research he had made, he was not technical in the manufacturing sector. He is a scientist and there was no expertise locally. He was to enjoy the perks of being a monopoly businessman making dry ice but first, he burnt his fingers.
“We make this dry ice from carbon dioxide which, if not used, goes away. It is stored in a 10,000 litre tank. If it is not used daily, it evaporates and that is what I did not know so I made losses,” he recollects.
There were three incidents where he invested $10,000 (Shs37m) in each and it all went down the drain. With no one with the experience in Uganda, he went to Kenya where he got someone to install the machines.
He learnt from the loss and pushed on. He retraced into logistics and trade business where he had qualified with a master’s academic degree in India. That worked.
Six years on, he has established Balsure Group of Companies in Uganda, Tanzania, Rwanda, Zambia, Burundi, and a back office in India. Today, the group is multi-million.
It includes Cargo Solutions Limited, Lucerne International Uganda Limited which makes industrial gas, The Great Indian Dhaba, African Tribe Hotel and Medvet Uganda Limited.
The logistics company handles freight forwarding. “If you want to bring something from China, India, Dubai, the USA and UK, you can approach us, and we will bring the goods for you. We are an international transport company. We are a landlocked country. We depend on importation a lot. We offer a solution,” he explains.
His experience in working in a logistics company since 2003 came in handy in establishing himself in Africa transport and trade business having a good idea on the geography and challenges involved in the business.
“We started very small. We started with US$60,000 (Shs190m) in the cargo handling business then in establishing the dry ice and industrial gas businesses, I invested $200,000 (Shs740m) as start-up capital which went into buying equipment, paying rent, hiring people,” he discloses.
He says that the logistics business is about providing a solution to potential clients by making a linkage between their suppliers, transporting the goods, clearing them through customs and delivering it at a fee. He runs the Dhaba which he bought from the previous owner. In 2020, he acquired Africa Tribe Hotel.
“It has been about making calculative business decisions and knowing how to make them work. I currently employ 120 people. From the time I was in college, I wanted to do business that would employ people,” he says.
Balsure has learnt that in business, it is important to keep people close. “That is key. As an employer, I want to say that the salary is key and the need to pay employees on time is important. If you do not pay on time, how are they going to survive? They have people who depend on them.
There are businesses and institutions that delay salaries which is not good. Paying people on time is a principle I have kept. It is one way to keep my employees happy and loyal to me,” he explains.
He has implored other entrepreneurs to keep their ledgers. To pay taxes, he employs a group auditor who takes care of taxation matters by taking data from each company monthly to file taxes.
“We have a duty to our nation to pay taxes on time and pay diligently. I filed taxes and made sure we paid ‘Pay As You Earn’ (PAYE), National Social Security Fund (NSSF), LST and more. He keeps reminding the team about the deadlines.”
Balsure is putting up an oxygen and nitrogen and acetylene manufacturing plant worth half a million dollars. The plant will be making medical grade oxygen. He says it will be ready by April. In his 18-year-old journey as an employee and employer, he has guided and mentored people.
“We say that if you want to guide and teach someone, teach them how to catch fish instead of giving it to them. If you teach him or her how to catch fish, they will take care of their family long-term, so I always do that with my friends and colleagues. If they need any guidance or assistance, I am available to them, for example a friend’s business went down during the Covid-19 lockdown and I asked him to become my transporter. He needed capital and I stood surety for him to get a loan at a micro finance company. He bought a truck. He is now looking at buying another one,” the entrepreneur narrates.
His message to you, who is employed but looking at making a switch to self-employment, it is risky to take a risk but if you do not take it, it will go away.
“Take a risk but be calculative about it. The satisfaction you will have after establishing yourself as an entrepreneur will be joyful. It is limitless and priceless. I encourage people to become entrepreneurs. You would start small. Uganda is the land of opportunities. When you taste the River Nile’s waters, it always calls you back and this is the land of prosperity. I will not say that I have not failed but the opportunities are immense. You can make a fortune here.”
“Whether you have the passion, you have to show us the potential that you can do it effectively,” he says.
More lessons: Sudhir Balsure learnt from the loss and pushed on. He retraced into logistics and trade business where he had qualified with a master’s academic degree in India. That worked.
Six years on, he has established Balsure Group of Companies in Uganda, Tanzania, Rwanda, Zambia, Burundi, and a back office in India.
Today, the group is multi-million. It includes Cargo Solutions Limited, Lucerne International Uganda Limited which makes industrial gas, The Great Indian Dhaba, African Tribe Hotel and Medvet Uganda Limited.
How to start logistics business
Logistics is a big game both locally and internationally, because everything we use daily has been shipped and delivered across various destinations before it’s sold and put to use. This is where you can cash in.
Thinking of starting your own transport and logistics company? While getting into the industry is not difficult, staying successful as a trucking company can be challenging if your business plan, finances and recruitment strategy are not solid from day one.
Whether you are starting off with a bicycle or a minibus, you need to ensure you are prepared for high competition because of the transport and logistics industry’s low barrier to entry.
Aside from the ease of access into the industry, you don’t need much capital to start off with – but you will need to do your homework. This is the only way you’ll build a sustainable business.
“In many instances the entrepreneur starts these businesses with little to no capital, relying instead on revenue derived from the business to cover all overheads from day one,” according to BizConnect. “Seek out customers and contracts before you start the business because transport contracts don’t magically appear later on.”
Now that you have established the kind of market you will be entering into, how do you go about starting your own logistics company? These are some of the top questions you should be asking before starting a freight company:
You don’t need to be a numbers genius, but a basic understanding of finances is helpful when launching any kind of start-up.
First, you will need to establish where you are going to source capital to get your transport business started. There are multiple options including the bank, investors and bootstrapping.
Next, you need to consider the specific expenses associated with the logistics industry, for example the licence and toll expenses, aside from maintenance, fuel and driver skills development training costs.
Although you haven’t started running your transport and logistics company yet, you need to consider operating costs and maintenance expenses when drawing up your budget.
The latter is crucial for providing reliable service to customers as you must deliver the excellence you will market to them. While marketing may not seem important at this stage, it’s important to budget for this expense as your company grows.
Remember that besides all the above costs, you will require money to keep your vehicles safe when they aren’t in use and when they are on the road. Invest in a secure location and other security features, such as trackers.
Lastly, you are going to need to pay your drivers and other staff salaries on a monthly basis, so factor in that expense when budgeting for your transport and logistics business.
Choosing the right vehicles for your transport and logistics company means your drivers will have the right vehicle for the job. This leads to efficiency and speed of service.
“Seeing someone driving a small van to deliver a huge load will make your company look unprofessional, as will using large bus trailers to carry minimal cargo,” say experts in the truck and trailer industry.
Establishing what vehicles you need now will help you have a clearer idea of how much truck finance to apply for when you approach banks for transport financing options. This information helps structure your repayment plan and set your interest rate more accurately. You will be able to budget your finance accordingly.
Experts recommend investing in a long-haul truck for larger cargo and longer trips. Babcock International, for example, has vehicles that will meet this need, although the cost is slightly higher than an average-sized truck.
If you are already considering new vehicles instead of preowned trucks for your business, you will benefit from a full warranty and service plans.
Once you have established how much you are able to spend on your fleet, start considering the available models for your business’s specific needs.
There vital aspects to consider when choosing your logistics vehicles are:
What types of supplies you will be carrying.
The volume of supplies you will be carrying.
The types of terrains you will be driving over.
Courier companies will require different vehicles from moving companies, for example. Your idea of the ideal vehicle for your type of transport and logistics company may have to be adjusted based on the amount of finance you qualify for or how much capital you have managed to allocate to purchasing of vehicles for your fleet.
You may need consider viable alternatives to find the right vehicle. So, list features like safety, comfort and condition instead of looking for brand names and the latest models. “Being open to different vehicles is the key to a successful fleet vehicle purchase,” experts advise.
Regardless of how vehicles are paid for, the cost of financing a transport and logistics business is the biggest expense you will have to manage.
Make sure you do your homework and understand the different options available when it comes to paying for vehicles. You can consider the following options:
Financial lease and extended rental agreements, where the use of vehicles is funded from revenue, no upfront payment is required, but the ownership remains with the lessor.
Instalment sale where a small amount relative to the total purchase price is paid as a deposit, your instalments are fixed, and you own the vehicle at the end of the term.
Remember to factor in the running costs of operating a logistics company, such as maintenance and wear-and-tear. These expenses should be included when considering the amount of finance needed to launch and sustain your transport and logistics company.
Before approaching a financial institution for financing, devise a budget and calculate your affordability.
The key components of your business, besides your vehicles, are your drivers. Your drivers need to obtain the relevant licenses before they can be considered legal to operate vehicles in your transport and logistics business.
Avoid issues later on, with the law and your customers, by ensuring you are recruiting qualified and experienced drivers at launch and as your business needs grow. Not only do quality drivers boost productivity, but your reputation is elevated when your clients know they can rely on your staff.
Invest in excellent employees and avoid setting the bar as low as the ability to drive and follow directions. Your drivers will need the relevant driver’s licences for different trucks and require training to handle driving in hazardous situations, such as storms and heat waves.
As mentioned earlier, everything around us needs to be delivered from point A, to point B. So, while it may seem that jobs are scarce and getting business is difficult in the beginning, avoid grabbing the first opportunity to get your first client. The best way to get noticed and acquire regular business is by being reliable from day one. People like that. They notice and appreciate good service and when you start your transport business, it’s a good reputation to have.