HOW TO START YOUR GPS TRACKING BUSINESS. A RacoWireless ebook Powering Your Success

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1 HOW TO START YOUR GPS TRACKING BUSINESS A RacoWireless ebook Powering Your Success

2 Table of Contents Why start a GPS Tracking business. 3 Get focused! Pick a niche for your business. 6 Develop your product and your pitch. 10 Test the waters. 13 Land your first customer 16 and form your company. Deliver results. 19 Do what s best for your customers 23 Grow, Grow, Grow 26

3 Why start a GPS Tracking business? The market for GPS tracking services represents a fast growing and relatively untapped opportunity for entrepreneurs and small businesses. There are currently more than 12 million commercial vehicles registered in the US alone, and in Latin America, the number approaches 20 million. Currently, only a small percentage of these vehicles are backed by fleet management software but this is beginning to change. A report from Berg Insight projects the number of fleet management systems in active use in the North American market will reach 3.8 million units by 2015 growing at a rate of 12% per year. In Latin America, it s expected to grow to 2.3 million units, at an astounding growth rate of over 20% per year. Increases in mobile technology, wireless connectivity have created an increasing number of applications for GPS tracking. These numbers are indicative of the growing opportunity for GPS tracking services in just location monitoring. North American Market Latin American Market

4 GPS tracking software as a fleet management tool involves much more than just location tracking. While location monitoring is of central importance, there are other equally valuable pieces of data that GPS tracking software can collect, interpret, and use to help your potential fleet management clients improve their own businesses. By offering GPS tracking, you can help fleet managers: Increase productivity. Know their vehicles locations and thus utilize the most efficient routes. Reduce fuel costs. Understand how inefficient routes or excessive speeding are affecting their fuel costs. Improve driver safety. Keep drivers secure with panic buttons and improve safety by knowing when a vehicle is stranded on the side of the road without cell phone service. Provide better customer service. Create happier customers with faster service. Purchasing GPS tracking services is an easy decision for most fleet managers because it quickly pays for itself through increased productivity, reduced costs, and improved customer service. As fleet owners begin to recognize the benefits GPS tracking services can have on their bottom line, more are going to begin adding the technology to their fleet management tool kits. 4

5 If you re considering starting a GPS tracking business, know that you re starting off on a good track towards entrepreneurial success. Starting any new business is challenging and there are many factors to consider. But if you re considering starting a GPS tracking business, know that you re starting off on a good track towards entrepreneurial success. A GPS tracking business has many facets that make it attractive for entrepreneurs (which is probably why you re reading this guide), including the perk of recurring revenue from service subscriptions. Before starting your GPS tracking business, there are several steps to consider that will put your company on the road to success. This guide will walk you through some initial steps necessary to launching a GPS tracking business. 5

6 Get focused! Pick a niche for your business. Your marketing and sales pitch will be more focused, compelling, and successful if you re able to picture your ideal customer and direct your business towards fulfilling their needs. Find a Customer. An important question for you to ask yourself in this early planning stage is: Who do I want my customers to be? There are many kinds of fleets, and many types of businesses that will benefit from GPS tracking services. While it may be tempting to answer: I want anyone that could use GPS tracking as my customer, resist that temptation, at least to start out with. Not everyone needs GPS tracking, or even needs the same type of GPS tracking. Pursuing every single business that could possibly use a fleet tracking solution as a potential customer is a foolish strategy and will wear thin your initial resources. Your business will be far more successful dominating a niche market, rather than trying to be all things to all clients. Your marketing and sales pitch will be more focused, compelling, and successful if you re able to picture your ideal customer and direct your business towards fulfilling their needs. In an effort to hook customers and generate mass appeal, many business owners will fall into the trap of believing that their products must be for everyone, and that they must focus on providing GPS tracking services to every business with a vehicle. Obviously, this is not focus at all -- and many of these entrepreneurs will subsequently flounder because they don t know who their real customers are. 6

7 Choose a Business Model. The GPS tracking industry has a large and diverse supply chain, and there are many kinds of GPS tracking businesses that you can start within the industry. From hardware manufacturers, to software developers, to GPS service providers, to system integrators, and more, there are many opportunities for success in this fast-growing industry, and there is no need to feel you must master all of them. Just to get you thinking, here are six ideas for GPS tracking companies you could start: Fleet management: Many companies have fleets of vehicles that need maintenance and service. Providing those companies with GPS installations and vehicle tracking in addition to general maintenance could be a compelling offer as a means to lower fleet costs. GPS device sales and installation: Companies with fleets need to keep track of these valuable assets. Selling GPS tracking devices along with installation, maintenance, and tracking is a service that will remain in high demand, as companies look to maintain contact with their assets. Dispatching service: Many local service providers like plumbers and HVAC companies have many technicians in the field, but would benefit from a central dispatch hub that could schedule visits, receive requests, and send techs out to do their jobs. A dispatching service could install GPS 7

8 units on their clients vehicles to track vehicle location and send the closest tech to the job, maximizing efficiency and customer satisfaction. Self-storage: Storage companies could use GPS tracking services as an add-on to their storage facilities. Mobile storage units or boxes within a storage unit could feature a low-powered GPS tracking device placed in them that will alert owners and/or management when moved. This could add a premium layer of security to property stored in self-storage units. Patient tracking services: A new company could sell and service patient tracking GPS devices for assisted living facilities or nursing homes. Those devices could be worn by assisted living and nursing home residents, so they can be easily found if they wander off the premises. The same business could sell both the devices to assisted living facilities as well as provide the monitoring service. Secure construction assets: A GPS tracking company could focus on serving construction sites and builders by offering GPS tracking for construction assets, equipment, and materials. Low-powered GPS devices could alert security and management during after-hours or when equipment is moved unauthorized off the premises. 8

9 Because you do not have the resources or expertise to be a master of every business segment, you should align yourself with companies that are experts in their respective fields. Find a Partner. A critical part of creating an effective business is identifying quality partners within your value chain. Because you do not have the resources or expertise to be a master of every business segment, you should align yourself with companies that are experts in their respective fields. For example, if you choose to be a GPS service provider, it is important to align yourself with quality devices from a hardware manufacturer, and an effective user platform from a superior system integrator. These partners have the power to make your business look great in the eyes of your customers, while allowing you to focus on your capabilities. 9

10 Develop your product and your pitch. Product. Once you know your target clientele and what kind of GPS business you intend to be, you will need to develop your service offering. Offering the right mix of products and services to your target market will be the key to your success. Will you offer a subscription plan featuring GPS tracking service? Will you provide installations for GPS tracking units? Will your company feature GPS monitoring and management of fleets? Or some mix of the above? Again, the same principle as picking a niche will be true of picking your particular offering. Make a product offering that appeals specifically to your target customer. Don t start out by trying to offer every conceivable GPS tracking product and service. Instead, make a focused and compelling offer to your ideal customer. Finding the right positioning for a company is incredibly challenging, but knowing what value you offer will help you find the right words to say. Pitch. It is nearly impossible to sell a service you can t articulate. Even when the results of the technology speak for themselves, your business will still need to have someone to speak for it, especially when you re first starting out. Finding the right positioning for a company is incredibly challenging, but knowing what value you offer will help you find the right words to say. This will, in turn, help you sell more of your services and close the gap between when you introduce your company to a new prospect and when they start to see how you will help them. Your value proposition will address the needs of a specific customer base, which you have already 10

11 A great value proposition will differentiate your product from your competitors to help the customer understand what unique services or features you offer that others do not. chosen, through a business model tailored to that customer, which you have also identified previously. This value proposition should succinctly provide your customer with compelling reasons why they should buy your product, and what specific benefits it will convey to their business. A great value proposition will also differentiate your product from your competitors to help the customer understand what unique services or features you offer that others do not. If a customer does not clearly understand what value you provide increased earnings, new business, improved efficiency, or decreased costs they will not purchase your product. Just as a GPS system can provide the best route for where you want to go, a well-developed elevator pitch can give you a clear understanding of what you want your business to do. Putting together a short elevator pitch is a challenging but necessary step in preparing to launch your GPS tracking business. Most good elevator pitches allow listeners without special expertise or industry knowledge to still get the gist of what the business does, what it offers its clients, and why they should want to hear more all within 1-2 minutes. Your elevator pitch will be useful for explaining your company to potential customers, investors, and employees. It s even useful for explaining to family members what you re spending so much of your time doing. Your pitch does not need to contain every detail about your business and services-- in fact, it shouldn t. If the short pitch 11

12 inside the elevator goes well, you ll have follow-up meetings or further conversation. Salespeople and politicians have their elevator pitches rehearsed and polished to perfection; business owners need to follow suit and have their pitch ready even before they start presenting their company to potential customers, employees, or investors. 12

13 Test the waters. You can mitigate some of the risk in your new venture by testing your idea prior to launching your company. Anytime you start your own business, you can anticipate a costly and challenging endeavor. Although it is important to focus on your particular niche, not every GPS business idea is good. There are many industries that use GPS tracking and many kinds of GPS companies you could start, but not every business idea will work. And there s no reliable way to tell ahead of time which ones will succeed and which will fail. Entrepreneurs often run the risk of wasting valuable time and money on ideas that are doomed from the beginning because there is no demand for their offering. It is wise to invest some money upfront to vet out your business idea and gauge the demand for your services. You can mitigate some of the risk in your new venture by testing your idea prior to launching your company. This will help you discover if your business idea is viable or not at its cheapest possible point, and can give you valuable feedback as to how you might need to pivot your business model to satisfy your target customers. You don t want to wait until you have an office, employees, and other overhead to discover that no one wants your services. Before printing off your business cards, and signing the papers for your LLC, you should first verify that a demand exists for your supply. One of the fastest and cheapest ways to do this is through Google Adwords. A few hours of dedicated work and a few hundred dollars can get you enough 13

14 real world data to see if there is sufficient demand for the GPS service you plan to offer. To get started, follow these three steps. Create a simple landing page: Once you have a firm idea of the unique value proposition you want your GPS tracking business to offer, create a basic landing page on the web that outlines what it is you intend to offer. Make sure to include a sign up form for a mailing list that will announce when the service becomes available. This way, you are able to capture the contact information of people interested in your offering without yet having a product ready to deliver. The first landing page does not have to be overly ornate or complicated. It doesn t have to say when the service will be available or give details on pricing or features. At this stage in the process the simpler the better. Buy search traffic for your landing page: The next step in testing out your business idea is to start a Google Adwords campaign to start driving targeted keyword traffic to your page. This Adwords campaign will tell you a number of things. First, it will give you an idea of how many people are searching for the keywords related to your business idea and clicking on the ads. Secondly, visitors to your page that fill out the form become viable leads for your new business. With this information, you will be able to estimate how large of a demand there is for your offering. 14

15 Talk to your leads: Communicating with the leads that sign up on your landing page will give you an indication of the likelihood that they would actually buy GPS tracking services from you. After running your test campaign and speaking with your leads, you will have a better understanding of the potential of your business idea. You will be much closer to knowing if you are on the right track and should move forward or if you should reassess and take your GPS tracking business in a different direction. An alternative to the Adwords route is to cold call prospective clients in your area to see if you can set up meetings to discuss the GPS tracking services you will soon provide. If you are planning to start a GPS tracking business, you owe it to yourself to perform the due diligence that will lay the foundation for your business s success. 15

16 Landing your first customer and forming your company. if you re charging for the hardware, installation, and monthly fees for tracking, it will not take that many customers or tracked vehicles to make the business sustainable, profitable, and successful. Once you have a well-established target customer, a product to offer them, and the evidence that there is legitimate interest in what you are setting out to do, it s time to start getting customers. But before you can have customers you ll need to have a customer. Finding that first person to commit to buy your services is the real turning point from planning your GPS tracking business to actually having one. Establish the Company. Getting customers to express true commitment to and trust in your business with their wallets should probably should come before making the business official. Getting your first customer or first few customers is vital to establishing your business. Without customers, your business will quickly wither away. Once you have landed that first customer, it will require hustling and hard work to grow your client list and build your business. However, if you re charging for the hardware, installation, and monthly fees for tracking, it will not take that many customers or tracked vehicles to make the business sustainable, profitable, and successful. Once you have a few committed clients, you should be ready to form your company. You have the business idea, the product you ll sell, and even a handful of customers. The next step is to make your business official, i.e., getting the business license and filling out the rest of the necessary tax and legal paperwork. A tax attorney could be ideal for this step. 16

17 The ultimate goal of any company is to win the hearts and minds of its customers and this is particularly true as a GPS service provider, where you are asking potential clients to entrust your brand with tracking their assets. Incorporation, licensing, tax, and other paperwork are something you could take care of by yourself. However, at this stage in growing your business, your time will be better spent hustling for new clients. If this is to be a serious venture, you can save yourself many headaches down the road by hiring a lawyer or other professional to take care of the details that need to be perfect. Hiring a professional will free up valuable time to work on the things that are essential for growing your business: finding and serving clients. Create a Brand. The second part of forming your company is establishing the brand and marketing materials that will help you reach more new clients as well as hire the right people to help service those clients. The ultimate goal of any company is to win the hearts and minds of its customers and this is particularly true as a GPS service provider, where you are asking potential clients to entrust your brand with tracking their assets. You always want to let your name be known and hopefully grow into the company that people immediately turn to when in need of GPS tracking, fleet management, or other relevant areas. If you don t give your company an image that consistently communicates who you are, potential clients may lose interest quickly or choose a competitor that seems more legitimate. Brand consistency and good design can make all the difference as you grow your business. Your brand image directly correlates with the 17

18 Your brand image directly correlates with the perceived quality of your product and your trustworthiness. perceived quality of your product and your trustworthiness. Having a stronger, more consistent brand can not only give your company and product a more reputable image, but instill recognition and reinforce customer loyalty. Everything from your logo, website, brochures, ads, tag lines, signs, and packaging, to your newsletters, business cards, and letterhead needs to be congruent with the brand and the message you are trying to convey. This is not an area to skimp on. If your graphic design is tacky or shoddy, it can make your company seem amateur, hokey, or unreliable to potential clients. Investing in good graphic design will pay off in your effort to establish your company s image and credibility. However, the best marketing your business can produce will be through quality service and satisfied customers. 18

19 Delivering results. GPS tracking software can uncover exactly where fuel inefficiencies are happening and what is causing them. Once you ve established your GPS tracking business and started working for a few customers, things start to get fun. Delivering results for your clients becomes a virtuous cycle that helps you get more business from each client and more new business through recommendations and referrals. Some of these results will come through your hard work and service, and some will come from the benefits inherent in the comprehensive GPS tracking platform you offer. For example, improved driver behavior and improved fuel management will save your clients a significant amount of money. After the cost of purchasing vehicles and the wages paid to drivers, fuel is one of the largest costs in managing a fleet of vehicles. It is also the expense over which many fleet managers feel they have the least amount of control. When fuel prices go down (which they rarely do), managers celebrate. When fuel prices go up, margins are squeezed and managers have to pay more to keep their fleets on the road. Fleet managers know intuitively that there are inefficiencies and wasted fuel within their fleet. GPS tracking software can uncover exactly where those inefficiencies are happening and what is causing them. Depending on the size of the fleet, acting on these fuel-saving opportunities can have a dramatic effect on costs and can more than offset the cost of the GPS tracking system. GPS tracking devices are able to capture an incredible amount of data about driver behavior 19

20 and vehicle efficiency. Recording and analyzing the combination of the vehicle s efficiency and the driver s behavior can create a fuel efficiency profile for each vehicle/driver pair. The point of all of this is to use facts to find opportunities to cut fuel consumption and thus save money. Driver behavior has a significant impact on the amount of fuel each vehicle uses. Driving too fast, leaving the vehicle idling, or taking long routes all lead to higher fuel use. Your business will be able to help fleet managers use GPS vehicle tracking to improve their drivers behavior in all three of those areas. By establishing policies based on acceptable average and top speeds, acceptable daily idling time, and other driving behaviors, your clients can greatly reduce the fuel consumption of their fleets. Tracking efficiency through average MPG: Tracking the miles per gallon of various vehicles within a fleet can quickly reveal the least efficient vehicles and drivers. The least efficient vehicles should be brought in for maintenance. There could be issues with fuel pumps, tire pressure, or any number of other problems that are causing these vehicles to burn fuel more quickly and run less efficiently. Also, the least efficient drivers should be retrained on better practices and more efficient driving behaviors, and the most efficient ones should be rewarded. 20

21 Improving reporting accuracy: GPS tracking also helps drivers submit more accurate time sheets. GPS tracking can automate a portion of the timetracking process by automatically logging when vehicles start and stop. This gives managers a more accurate picture of their employees work day. It shows when they start, how long they take for lunch and other breaks, and when they return their vehicles at the end of the work day. This also serves to improve driver behavior by making the time-reporting based on accurate verifiable data and not paper time sheets, which are subject to human error and exaggeration. Idle threats: Most commercial vehicles burn about a gallon of gas per hour they spend idling. One gallon of gas doesn t cost that much, but multiplied across an entire fleet of vehicles over a year, the cost of fuel burnt without purpose is staggering. GPS tracking can be used to manage the time vehicles spend idling. By setting maximum idling thresholds for vehicles, managers can offer incentives for reducing average daily idle time. Business use only: One of the biggest opportunities for cutting down on fuel consumption is to verify that fleet vehicles are only being used for approved business. A significant portion of the fuel consumption and wear on vehicles comes from employees driving work vehicles for personal use. GPS tracking can make it easy to enforce policies about using company vehicles for personal errands. Managers can receive alerts if vehicles start after 21

22 hours, and vehicles can trigger an alert if they go out of an area designated by geofencing. Only fuel your fleet: Many fleets use fuel cards so that their drivers can refuel their vehicles at any gas station and so management can centrally manage costs. GPS tracking can help make sure that those fuel cards are not being used to fill personal vehicles or friends vehicles at the pump. It would be pretty suspicious to see your driver put 65 gallons of gas into a truck that only holds 50 gallons, or to see a fuel card used on a driver s day off. Creating a positive feedback loop: For best results, drivers must have frequent access to the results and data regarding their driving habits. Your business can help fleet managers distribute weekly reports so their drivers can see trends and patterns in their driving behavior. They should also be able to see how their driving compares to other drivers in the company and to the benchmarks set by the company. For example, if the fleet manager sets a goal of less than one hour of engine idling per day, drivers should see in their weekly report how long they idled each day of the week as well as the average daily idle time of their fellow employees. Drivers with the best results should be rewarded accordingly. 22

23 Doing what s best for your customers. There are numerous benefits your clients will realize through the GPS tracking services you offer. There are numerous benefits your clients will realize through the GPS tracking services you offer. However, there are also benefits to helping them choose the right GPS hardware and teaching them to make the most of their GPS software. As was mentioned earlier, identifying quality partners in the value chain is critical to success. Picking high quality GPS tracking devices and providing them access to the best GPS tracking software will benefit your clients and your business. High-quality devices require less service and maintenance and command higher margins, and a comprehensive GPS software platform will provide many of the features your clients will need. It is important is to pick the right GPS tracking hardware to offer your clients. In any GPS tracking business, selecting good hardware for your customers will set your company apart from the competition. High-quality hardware is easier to service and maintain, and will help cement the long-term relationships that will ultimately make your business grow. There are many kinds of GPS hardware devices available, and there are several features your business should keep in mind when honing in on the right GPS tracking hardware to recommend to your clients. When picking GPS hardware, you should consider factors like the intended application (vehicle, passive tracking, etc.), the kind of power source needed (internal battery, external power source, etc.), the method of communication (cellular, 23

24 radio, etc.), as well as other features like the durability of the casing and support for cutting engines and overriding vehicle functions. There are many features to consider, but try not to get too caught up in feature sets. Instead, think about your clients specific needs and choose a device that meets those needs. High-quality devices require less service and maintenance and command higher margins, and a comprehensive GPS software platform will provide many of the features your clients will need. The GPS tracking platforms offered by reputable companies are largely device agnostic. This means that your decision will be less about finding a device that works with the software or even worse, being locked into one manufacturer s devices -- and more about picking GPS tracking devices that are right for your business and for your customers. You will have the freedom and flexibility to do what s right for your clients and select the hardware that is most suitable for needs. Choosing a GPS tracking platform that works out-of-thebox with a wide range of devices also means that your GPS tracking business will be able to work with your customers existing hardware lowering their costs and increasing your sales. Also, no matter what kind of GPS tracking service business you start, you will need to provide your customers with a way to view the movement and position of the assets they are tracking or that you are tracking for them. Rather than trying to develop it alone, choose a GPS tracking platform that will scale with your business. Picking a software partner with powerful software 24

25 Choosing a GPS tracking platform that works out-of-the-box with a wide range of devices also means that your GPS tracking business will be able to work with your customers existing hardware lowering their costs and increasing your sales. and proven tools will serve as the technological backbone for the service you offer your customers. The best thing you can do for your clients is to set them up with the comprehensive GPS tracking platform by Position Logic. It has features your customers will love you for--features that will lower their fleet s fuel consumption, features that will lower their insurance premiums, features that will keep their employees productive and accountable, features that will help them serve their customers better. 25

26 Grow, grow, grow. This final section isn t really about Starting a GPS Tracking Business; it s about what you will be able to do once you ve completed the previous steps. The market for GPS tracking services is huge and the opportunities for entrepreneurs to establish themselves in niches within this market are numerous and diverse. Of course, providing a world-class GPS tracking platform is what Position Logic does for businesses all around the globe. If you re curious to see how Position Logic can help you start and put your new GPS tracking business on the map, request a free demo of Position Logic s GPS tracking software to see how our team of GPS experts makes sure that you re in business for yourself, but never by yourself. Position Logic (Int l) 26

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