Every day, millions of Americans send parcels and other items from one location to another. According to Statista, the courier and local delivery services industry generated an annual revenue of $93 billion in 2014, up from $80 billion in 2009. If you are looking to establish a business in this industry, there is no doubt you’re staring at a profitable venture.
Here is a complete guide on how to get started:
1. Start Small
On average, you need between $10,000 and $50,000 to establish a well-oiled courier business. A huge chunk of the startup capital will go the purchase of delivery vehicles. Since this capital maybe difficult to raise, it is wise to start by working as a courier for a larger company. This means you will pick up items from the company and deliver them to recipients. All you need is a mechanically sound motorcycle or van, and a rider or driver’s license.
Besides getting the opportunity to raise startup capital, starting small will also enable you to gain the industry experience you need to establish your own business.
2. Set Up Your Business Premises
When you are ready to start your own business, find an ideal location for establishing your business premises. Since you already have some industry experience, it will not take you long to identify a market with a substantial client base. Although competition is good for industry expansion, it is harmful to small and emerging businesses. So be sure to avoid setting up base too close to larger courier businesses.
Remember, your business also needs a name, preferably one that identifies your industry or markets you as an expert. Something like ‘Dash Transporters’ sounds ideal.
3. Get a Business License (and Other Necessary Permits)
All 50 states require businesses to be licensed. While some states may issue courier-specific licenses, others issue a general business license. To get licensed, you typically need to:
- Supply information about your business’ physical location and ownership structure (sole proprietorship, partnership or limited liability company) to your local government’s licensing board
- Supply detailed information about the business activities
- Submit copies of your personal identification documents
- Obtain a Federal Identification Number (Employer Identification Number)
- Obtain a local tax number.
You may also need additional permits depending on the nature of goods you will transport. To deliver hazardous materials, for instance, your drivers must have a hazardous materials transportation license.
4. Acquire Vehicles (Vans)
With the licenses safe in your files, it is time acquire more motorcycles and vehicles. As the business quickly develops a client base, so will be the number of deliveries you will need to make. You don’t want to keep customers waiting, as many of them will expect their items to be delivered within a short time.
The best way to approach vehicle management is to buy some, and rent some. You can also hire delivery men with their own motorcycles or vans.
As the business expands, you will need to upgrade to large vehicles like semi-trucks.
Visit the U.S. Small Business Administration for business financing opportunities.
5. Get an Insurance Cover
Your business, like any other, needs an insurance cover. This will protect it from risks such as road accidents, fire, and parcel loss or damage so you don’t have to fork out your business cash to refund customers for lost items.
Finally, be ready to address complaints. Many of them! No matter how efficiently you strive to run the business, late deliveries and parcel mix-ups are inevitable. It is just the nature of the business. Talk to your customers nicely and solve their complaints as quickly as possible.
These are the five crucial things you need to know before starting a courier business in the US. If you have any questions, don’t hesitate to ask in the comments section below.