How To Start A Courier Business
Are you wondering how to start a courier business? Well, you are not alone. After all, courier services are becoming increasingly popular, thanks to the ever-growing online marketplace.
There is a good reason for this too. Starting your own courier business is a great way to make some extra money on the side or even to turn it into a full-time career. But, before starting your business, you need to understand the basics of what it takes to get started.
In this blog post, we will go over the essential steps that you need to take to get your business off the ground. So, if you’re ready to start your own courier service, keep reading!
Choose the Right Vehicle
Once you are ready to start a courier business, one of the first things you have to do is to choose the right vehicle. Most people start with a cargo van, as it allows them to carry a wide range of packages, but there are various alternate options depending on your needs. In fact, your major outlay when starting a delivery service business will be your transport.
If you are buying, you must go for the most reliable model possible. Fuel economy should be a top priority, as most of the roads you drive will be city and residential streets. Low speeds and lots of starting and stopping amount to high fuel usage.
You can always lease a van if you wish to lower costs. Used vans are also an option, but keep in mind they might be less reliable for your needs when you start a courier service depending on their condition, as you’ll want to get the most usage out of them.
Get the Right Equipment
After the items for delivery are confirmed, you can choose the right equipment. Some items may not require additional equipment at all. You might want to get some lifting aids for large and bulky items to save your back.
Cargo straps, moving blankets, and tape can be purchased readily at a low price. Keep a dolly on hand to wheel about oversized packages.
Name your Business
A new courier business surely needs a good name. When naming your business, you want something creative, professional, and easy to remember. You will be handing out business cards and promoting your business online, so choose a name that will look good in print and can be easily found with a simple Google search.
The name of your business should reflect what you do and your mission. You will need to check with the local state to see if anyone else is already using your desired business name. After you’ve made sure that there are no takers, check if the website domain name is also available for your use.
Formulate Your Business Plan
Another important aspect of how to start a courier business is coming up with a business plan. A business plan is essential if you want to get funding to start a delivery business. Even if you don’t, it can help keep you on track. Writing it can also show hidden problems and make you think about areas you didn’t before.
A good business plan will lay out all of the details of your business, including your start-up costs, your target market, and your projected profits. This document will be essential when seeking out funding for your business.
If you want your courier business to be a success, the long hours spent researching how to write a business plan will be essential.
Choose a Location
Most people will start by opening a courier service business in their local area. As this will be a familiar region, they’ll already know the roads, businesses, and needs of the town. As the business grows, you can expand into other locations and hire more employees.
Size-dependent, you may also need to rent a garage or office space. Doing this in the city can mean higher costs, so you’ll need to decide if the efficiency of the city will be worth the cons.
When choosing a location, make sure you consider the following:
- The size of your facility
- Zoning regulations in your area
- The proximity of your competitors
- The availability of qualified workers
- The cost of rent or purchasing a property
Form the Legal Business
Starting a courier business requires registering it as a legal entity. There are three main options, each with advantages and disadvantages. These are a sole proprietorship, limited liability company, or a corporation.
- Sole Proprietorships are the simplest form of business to start and maintain. You will be fully responsible for all debts and liabilities incurred by the business. This includes any legal action taken against you or the company. The advantage of this structure is that it’s easy and inexpensive to set up.
- A Limited Liability Company (LLC) offers protection from personal liability for business debts and lawsuits. This means that if the company is sued, your assets are protected. The disadvantage of an LLC is that it can be more expensive to set up than a sole proprietorship or partnership.
- A Corporation is a legal entity that is separate from its owners. The main advantage of this structure is that it offers the most protection from personal liability. The downside is that it can be more expensive and complicated to set up than the other two options.
The next step is to register for a business license and get a tax identification number. From here, you can start trading and paying taxes on your earnings and income.
Get Business Insurance
Getting insurance when starting your own delivery service is very important. It will protect you from liability if something goes wrong during your business.
There are many different types of insurance policies available, so do your research and find the one that best suits your needs.
General liability insurance will protect you if customers are injured or their property is damaged. It can cover replacement, repair, and costs for treatment and medical issues.
To cover business equipment, you will need commercial property insurance. Commercial vehicle insurance is similar but covers your fleet should it be damaged or destroyed while on the road. Worker’s compensation insurance covers your employees if they are injured on the job.
The cost of insurance policies will change depending on several factors. Location and the value of your assets are just a few variables that may impact it. Insurance is essential and can get you out of some sticky situations.
Marketing and Finding Customers
Now that you have your business structure in place, it is time to find customers and get your brand out there. Hopefully, you should have looked at some of this while doing your business plan and researched the local market. The best way is to call and visit local businesses in person to offer your services.
The above-mentioned actions go hand in hand with a marketing plan. A great place to start is with creating a website and social media accounts, starting a client email list, and setting up online advertisements. Encourage interaction by asking customers for reviews.
Once the ball starts rolling, think about starting a referral scheme. Offer customers a discount if they have a friend who starts using your business after their recommendation.
Get Management Software
Last-mile delivery is essential to businesses, and the courier takes on the role of representing the company in this process. To ensure a courier leaves a positive impression, management software is essential. Keep reading to learn about the systems that will help with staff and delivery management.
Accounting software is going to make streamlining your systems a lot easier for you. It allows you to monitor cash flow, while organizing taxes, along with making reports should you need to show lenders or investors.
Tracking software is necessary if you have a fleet of vehicles performing multiple deliveries. This is surprisingly easy to do using our Detrack Application.
Get to know the market
Since you now know the basics of how to start a courier business, you can begin researching.
Do some research and find out what other delivery services are doing in your area. See what services they offer and how they operate. This will give you a good idea of what it takes to be successful in the courier service.
You should also find out what your potential customers are looking for in a courier service. What are their needs, and how can you meet them? By understanding your target market, you’ll be able to create a successful business plan that meets their needs.
Detrack is a scalable and affordable solution for managing your courier system. The location, speed, and distance of your vehicles can be tracked using a simple mobile application. Your customers will rest assured knowing they can track their packages in real-time, along with receiving live notifications.
Sign up for a FREE account now to enjoy the full benefits of Detrack and get your courier business up and running!