Starting your own local courier business can be easy and quick, or it can be a slow, difficult, and frustrating process. Here are nine basic steps to make your courier business startup easy, painless, and speedy.
Step 1. Find your niche. Establish your unique “niche” to insure success. If you live in a metropolitan area with lots of existing courier service businesses, this is an essential step. Even in a small town, it will give you a “quick start” for targeting your new customers.
Talk to your prospects, whether they are lawyers needing same-day document delivery, or caterers needing prepared meals delivered every day at a certain time, to find out what they want, and then offer it to them at a reasonable price. That’s the secret of success for any business – giving customers what they need or want. One of the best niches is filling the UPS/FEDEX gap by providing local businesses with same-day local delivery.
Step 2. Don’t spend money. Resist the urge to spend money when you are starting up. If you have a reliable vehicle to make pickups and deliveries, don’t spend thousands on a new delivery vehicle. You can use what you already own, or buy second hand for half price. Keep your office at home if possible to avoid spending unnecessary money on rent, utilities, and the overhead of a separate office. Think and act like a miser until you’re making a decent income from your new courier service.
Step 3. Legal structure. When you start a courier business, it is important to decide on the legal structure for the new business. Will you operate it as a sole proprietorship, as an L.L.C. or as a corporation. You’ll need to get this out of the way first, before you apply for a business license from your town or state and get a federal tax identification number. You’ll find lots of good free information about what structure might be best for you at Nolo.com.
Step 4. Finding Customers. After you’ve set up your business and found a niche or two that makes sense for you, start looking for customers. You only need a few good ones, so start prospecting by calling or visiting local businesses in person to learn how you can help them solve their courier needs and find out what kind of services they might need. No “hard sell” is required, just a helpful attitude will do just fine.
Step 5. Referrals. Once you have your “core” customers and have treated them well for a while, ask them for referrals. Tell them you’re still growing your business and could use a few more good customers like them. Offer a free delivery or a discount on a month’s service in return for a referral that becomes a regular, repeat customer.
Step 6. Set your rates. Many new couriers make the mistake of not charging enough to cover all their costs, as they haven’t been in business long enough to be aware of all the little costs, like a business permit renewal fee, that can add up to big bucks over a year’s time. Other examples include bookkeeping fees, social security taxes and vehicle maintenance, and many more. A good rule of thumb to remember is to add about 30-35% to the wages you’ll be paying yourself to arrive at a reasonable rate that allows you a profit and still makes your customers happy. After a few months, take another look and see if your rates still give you the net hourly rate you want. The current national average rate is $36 an hour.
Step 7. Provide exceptional service. If you give customers great service, you’ll do well and soon have all the customers you can handle. For example, if you promise a two-hour service, aim for 90 minutes. Your customers will love it and recommend you to others.
Step 8. Keep track of your customers and their deliveries with one of the free scheduling software programs, like check appointments.com or clickbook.net. Another option is one of the calendar programs offered by Google or Microsoft. For a small monthly fee, you can also use them to get paid online with Paypal. Of course, it can be used on your smartphone while out making deliveries.
Step 9. Track your expenses. Like the software programs for scheduling, there are programs to help you do your own bookkeeping. My favorite, which makes keeping track of your small business finances easy, even if you can’t add or subtract, is outright.com, which is around $10 a month and even reminds you when taxes are due or when you overlook a deduction.
About deductions … the biggest one most couriers will enjoy is the business mileage deduction, currently 55 cents a mile. Many couriers have used this deduction to pay for upgrading their vehicle to a fuel-efficient newer model, like the Toyota Prius, and found the fuel savings were greater than their vehicle payments! A fringe benefit is that when you do upgrade to a fuel sipper, you’ve now become a “green” courier service business, which customers love! For an example of how powerful this can be, visit greendelivers.com
Follow these nine simple steps, and you’ll be on your way to a successful courier service business.