Guide to start a courier business

Most courier companies will need to market to other businesses who are looking for a courier. This can be done by making a list of businesses that may need a courier service and then cold calling and emailing prospects, or drop off your business cards. 

Steps to start a courier business

Here are some of the steps that will ensure a smooth opening of your courier business:

1. Find your niche- Establish your unique niche to make sure you succeed. If you are from a metropolitan area that boasts of ample courier service businesses then this is indeed an essential step for you. Even if you are from a small town then creating a niche will give you a good start to target your new customers. It would also be great if you give a good start to target your new customers. What you need to do is talk to the prospective customers and understand their pattern. You can find out the things they require from day to day and try delivering them.

2. Don’t spend money- This is an utmost crucial factor. Remember not to speed way too much money when you are starting up. Do not spend thousands of bucks on delivery vehicles if you have one reliable vehicle. At the initial days you can even buy second hand stuff for a relatively lower price. To avoid unnecessary spending you can also keep your office at home so that a lot of money on rent and utility can be saved. Until and unless you are making a decent income from your new courier service  it is wise to act like a miser.

3. Legal structure- When you start a courier business it is very important for you to decide on the legal structure for your new business. First of all you will need to make sure whether you will operate as a L.L.C, sole proprietorship or a corporation. Before applying for a business license you will have to figure this out first. After ensuring this, apply for a business license and get a federal tax identification number. You will get a lot of free information from the internet about the structure that would suit your business in the best possible manner.

4. Finding customers-After setting up your business and finding a niche, all you need to do is start looking for customers. To start with you only need a few customers and they should be good ones. You can also start prospecting by visiting local businesses personally to see if you can help them with your courier services. Find you what kind of delivery services they require.

5. Referrals- Once you have made some corte customers by providing them with the best of your services, ask them for referrals. Just tell them that you are still expanding your business and would like to gain a few good customers like them. Offer some incentives on the initial phase for instance offer a free delivery or a discount on a month’s service in return for a referral.

6. Set up your rate- 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.

Your courier companies will need business insurance for your vehicle, cargo insurance, and possibly liability insurance as well. Having an insurance policy is also essential for building trust with customers. Many businesses and individuals will avoid working with a courier service that is not properly insured.