Pointers for Starting Your Courier Service

You own at least two vans plus another sedan. You also have motorbikes in your garage. It’s been an ongoing discussion with the wife about the underutilization of all these vehicles. She’s been encouraging you to turn it into a money-making venture.

You’re the head of the accounts division of one of the leading pharmaceutical players. Part of your job is to vet third-party vendors such as Action Mailing to determine if they provide the necessary expertise for your marketing campaigns. Scrutinizing such pages takes a lot of time, which ties your hand from engaging in work on the side. But they relieved you of that duty following your request.

You’ve talked it out with your wife and consulted a few friends, and you’ve decided to start a small delivery business using your vehicles. What do you need to know when starting a delivery or courier service business?

An Overview of the Courier Service Industry

The couriers and local delivery services industry in America earned $104 billion in revenue in 2018. There are nearly 228,700 businesses across the country.

The industry is divided into two segments comprising of extensive courier services and smaller local delivery companies. With your fleet of vehicles, you will fall under the smaller category.

delivery man smiling

Getting Started

As a courier service, you will be moving packages in varying dimensions. Here are more things that you need to consider:

  1. Continue to get advice. Conversations with your wife and friends are good. But you need to take it further by seeking the help of someone who’s an expert in the industry. There are legal and insurance matters, which you might have to navigate, particularly during disputes. Consult an attorney to give you a quick rundown of the laws. An insurance professional and an accountant should also be part of the list of people you should consult.
  2. Set boundaries. Figure out the limits of your delivery areas. You need to define your boundaries as this will have an impact on your gasoline expenses as well as on the expectations of your potential customers. Don’t list territories or areas that are not included in your regular route. Make sure that your customers are clear about your boundaries. Will you be operating 24 hours day? Or does your delivery fall within the 9 to 5 business hours only?
  3. Equipment. It doesn’t stop with just having the vehicles. There are other devices involved, like a clipboard, mobile phone, GPS, and computers. You need standard office supplies like packaging tape and box cutter.
  4. Track expenses. Monitor your monthly payments, from fuel to repair services to parking fees and other miscellaneous costs. List all your expense categories and diligently manage the inflow and inflow of cash. It’s easy to lose track of what you are spending on. Before you know, you’ve already exceeded your budget.
  5. Determine your price point. You have a van, a car, and a motorbike. You need to determine your price point based on the services that your customer will require. Factors to consider include:
    1. Your location
    2. Your target market. If you’re targeting groups in the higher income bracket, you could charge more.
    3. Your competition. You want to charge as high as you can but not to the point that the business is going to your competitor.

You need to figure your business registration and licensing and your marketing plan. Above all, you need to come up with a sound business plan to make this business a success.

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