Now for those who don’t know what a courier service business is or stands for, a courier service is a business company that moves packages from one location to another for a fee. Popular courier brands that have gone beyond just courier and delivery to full time haulage and logistics include UPS, FEDEX, DHL, ABC Courier, etc.
Opening a courier business can be a lucrative opportunity, but there are practical things to put into considerations and logistics to be taken into account but you may tend to overlook them. So without wasting your time, below are the steps to starting a successful courier company.
Starting a Courier Business – Sample Business Plan Template
Draft out a comprehensive business plan following the guidelines available from your local Small Business Association popularly known as (Business Centre Association), and pay special attention to financial management details.
2. Decide the type of parcels you will be delivering
The next step to starting a courier business is to decide if your service will be limited to envelopes and small packages or large cargoes. Naturally, your decision will depend on the capacity of your storage and transportation vehicles. Will you will be delivering sensitive cargoes such as medical and industrial chemicals? If yes, then you and your crew must be knowledgeable in handling and conveying such substances.
You may also choose to deliver perishable goods. However, you must bear in mind that this cargo is always time sensitive, so your manpower resources and transportation must be adequate. You have to make your units to be well known.
Your ability to deliver a wide variety of cargo will augment your potential to earn. However, you should expect to spend more initial capital. For instance, to successfully deliver perishable goods, you may need to invest in refrigerated trucks for it.
In other words, you should define the limit of your parcel destination. You have to decide and mark the globe you will intend delivering. Also decide if your service will be limited to within a state or country. Check if you can handle deliveries from coast to coast.
Observe if you have the resources and the network to deliver internationally. Bear in mind that the same rule goes for all. Note that the wider your geographic scope, the larger the amount you will be required to invest on start.
You have to establish a pricing policy, and get it printed in an easy-to-read format. In setting up a price list, there are several factors to consider. The first to consider is the amount and mileage of gasoline that will be consumed from let’s say point A to B.
The second factor is the number of parcels to be delivered at a particular area. The third, you have to consider if the delivery will be from point A to B scenario or if you will be able to accept delivery from point B back to A. Four, consider the rate your competition charges their own customers.
Finally, the factors listed above are only a small fraction of the whole picture. Be advised that you must gain hands-on experience in the industry if you are really serious to start your own courier service and to gain this experience, working for a courier service company is the only means to accomplish this. Working for a courier company will enable you have a “feel’’ for how the system works.
5. Meet with business advisers
To have a successful head start, you have to consult a business attorney that is familiar with courier service business to offer you advice on matters like local zoning laws, which is especially relevant if you will run the business from your home.
You should contact an accountant that is familiar with the courier service business to give advice on how to keep and maintain your business track records, tax fillings, the pros and cons of employees versus independent contractors and how to set up and accounting system.
You should as well consult an insurance professional that is familiar with courier service business in order to advise you on how to obtain the proper business insurance for your office and also, its contents along with commercial vehicle coverage, worker’s compensation insurance (if needed), cargo insurance and health insurance.
6. Get the necessary business permits
You should as well obtain the necessary business permits and you have to license your business and your vehicle; have a discussion about the pros and cons of incorporating a company.
7. Get the necessary equipment
The material items that you will need to start a courier business can be found on the list below. You do not necessarily have to limit yourself with these items but a good courier business will certainly require them:
- A vehicle
Transportation is of the essence in any delivery service. If you are planning to deliver big items and packages, investing in a covered truck is your first step. If you are still learning the ropes of the courier business, then it’s best to work with what you’ve already got in the garage and deliver items which will conveniently fit in your current vehicle.
You should also make sure as well that you have the resources to cover for several weeks of gas expense before your customers pay off their bills to you. And don’t overlook the insurance policy of your vehicle as it should cover business use as well. Before choosing an insurance company, you will need to know if you and your insurance company are financially capable of handling any possible contingencies.
- GPS System and Cellular Phone
A GPS system is also essential. Nowadays many cellular phones have that feature, and it will certainly guide you during deliveries. You have to buy street maps for the area you will be covering. The maps are also available in book form and can be bought at almost all the book stores. Even if you are having GPS, the maps are invaluable, especially if the GPS is malfunctioning.
A cellular phone is also important because it will enable you to contact your customers while on the road or anywhere else, as well as to let potential clients contact you wherever you are. You should as well establish a communication system between you, your customers and your drivers, having in mind that it is illegal to speak while driving on a cell phone in many areas.
- A computer and a printer
You need to print out invoices, tax records, and other such important papers for your courier business. You will also need a database of your customers and the businesses that you’ve dealt. These are some of the things that you need in starting a courier business.
8. Market and advertise your courier business
Buy tee shirts and baseball caps with your business name printed on them. This will give you a more professional appearance. Choose a colour, and use that colour on all conceivable piece of equipment throughout the business, including personalized ink pens, clipboards, notebooks and your vehicles as your business increases. You have to advertise your courier service business by placing ads in trade papers, local newspapers and hand delivering or mailing of flyers to local businesses.
How to Start a Courier Business – Sample Business Plan Template
9. Run your courier business
At this stage, you are now set to start and run the courier business; so here are some additional tips to help you out. You should take your vehicles to a mechanic for a thorough overhaul.
For the fact that you would not want your vehicle to break down as soon as you start the business, you should take it to a mechanic for thorough servicing and you should as well consider having a back-up vehicle on stand-by. Make an order for magnetic signs for your vehicles. You have to order for it because you will need one for each front door of the vehicles.
You should consider dedicating one credit card to all of your business expenses. It will be easier for your accountant when it is time to reconcile your accounts and pay your taxes. Also keep close records or tracks of your business mileage versus personal mileage. Mileage for personal matters is obviously not tax deductible.
In conclusion, it is important you know that your personality is another extremely essential factor if you want to to starting a courier business successfully. You will need to be customer service oriented, meaning that you are approachable and warm, caring and accommodating. Building your customers’ trust is a combination of quality service and of course, establishing good relationships with them.
Like many other businesses, operating a courier services business requires a lot of patience and determination. Expect a lot of losses, but with proper management and the right connections, you will definitely make even more gains.