A Guide to Starting Up Your Own Courier Business

Updated on February 20, 2024 by Mike Foster

eCommerce is booming, changing the way in which we conduct our lives today. From food and pharmaceuticals to clothing, furniture, and appliances, all of it can be bought from the comfort of our armchairs, saving us time and energy.

Online shopping has escalated since 2020, opening up opportunities for enterprising individuals and existing businesses. Selling online is no longer just another option for businesses to move their products. Individuals can now sell their own products and those manufactured elsewhere without having their own warehousing facilities or a delivery service.

Source: Think With Google, Built With, Shopify, International Post Corporation

Predictions put the global growth of the courier industry at 5.7% in the forecast period 2022 to 2029, with a total market size of $658.3 billion by 2031. 

As ecommerce escalates, and existing businesses outsource their delivery services to the logistical specialists, now may be the perfect time to consider starting your own courier business. 

But where to start?

We share some insights into how to start a courier business and give you some guidelines on where to begin.

 We hope that our expertise in transport systems will help you when making important business decisions and that our free business plan template below will assist you in identifying your business needs. 

With a comprehensive plan in hand, it should be possible for you to turn your courier business into a thriving enterprise.

A step-by-step guide

To begin with, you need to understand the size and nature of your proposed business in terms of the following:

• The number of vehicles you will need and their capacity.
• The nature of the goods you will be transporting.
• Your delivery range: are you planning on local deliveries only or a long-distance, nation-wide service?
• Driver capacity: how many drivers will you need?
• Route planning: will you be doing this manually to begin with?
• Methods of vehicle tracking and communication with drivers.
• How to get courier contracts.
• Effective communication with your customers.
• Software requirements: financial and logistical systems.
• Your website and social media strategies.

Do your research. Determine the area in which you plan to operate, and find out who your competitors are. Decide on the customer base you want to target, for example, home deliveries, small businesses, or large corporations. Do research into industry trends in the area.

Build a business plan

The second step is a business plan. Your prospective clients will want to know that their merchandise is in good hands, and no financial institution is going to consider an application for finance unless it is accompanied by a comprehensive business plan.

You will also find that drawing up your business plan helps to clarify your business ideas, identify potential risks, and formulate some sound business strategies. 

The more you build into your business plan, the easier it will be when starting out. It’s a good exercise, and an essential step in your journey.

The business plan can be broken down into the following sections: executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing strategy, operations plan, management team, and financial projections.

COURIER BUSINESS PLAN TEMPLATE

Executive Summary  -  the introduction to your business plan. Are you an existing company or a startup? What type of courier company are you? Provide a brief overview of all the sections of your business plan.

Company Overview  - what type of company are you running? List the class of vehicles in your fleet: small delivery vehicles, trucks, etc. Are you a local, national, or international organization? What is the legal status of your company? Sole proprietorship, limited liability company, etc. Give some background: when and why you decided to establish the business. What have you achieved to date? How many customers do you have? How many deliveries have you made? Do you have any positive reviews to share?

Industry Analysis – an overview of the courier business. How big is the courier industry in monetary terms, and is it growing? What are the current trends in the industry? Give a list of the key suppliers and competitors in the industry. How does the size of your company compare with the market size?

Customer Analysis Give details about the customers you serve / hope to serve in terms of : e-commerce businesses, small businesses, manufacturing companies, healthcare providers, food chains, etc. Give the customer demographics: location, age, gender, and income. Describe your customers’ requirements.

Competitive Analysis  Identify your direct competitors. These will be other courier companies. Describe: Their businesses. Their location in terms of proximity to your location. The types of services they offer. The market sector they cater for. Their pricing structures. List their strengths and weaknesses. List your strengths by comparison. For example, will you have superior packaging, will you be providing additional services, are your prices competitive, and do you think you will be able to outperform your competitors?

Marketing Strategy Describe your type of courier company. List the products you are offering. List the services you intend to offer, such as special packaging, electronic notifications of proof of delivery, specific communication methods, and parcel tracking facilities. Mention your location and what advantages or disadvantages your location may present. Examples are proximity to your customers, proximity to busy retail areas or industrial sites. List your intended advertising strategies and their effectiveness. Advertising strategies may include local newspapers and magazines, social media, your company website, local radio, and sponsorships.

Operations Plan Describe your short-term processes and long-term goals. Short-term: deliveries, receipts, packaging, communications, technology. Long-term: What is your goal for the next five to ten years? Do you plan to expand your premises, or move to a different location? Would you like to expand your product range to include, say, same-day-deliveries?

The Management Team List your managers and their credentials, their management and leadership abilities, business experience, and experience in the courier industry in particular.

Financial Projections As a startup business, a projected view of your expected income, expenses, assets, and profit for the next five years is necessary based on your market research. You will need to provide an income statement, balance sheet, and cash flow statement for this period. Break the first year’s figures down into monthly statements (or quarterly, if preferred). The balance sheet should include: the cost of equipment and vehicles; the startup costs, such as building expenses; salaries; legal expenses; insurance; taxes; and permits.

Legalities and safety

The next step is to register your courier business and familiarize yourself with the legal and safety requirements. 

Get a registered agent for your active company (like LLC or C corp). To streamline the process, can hire a registered agent service for an annual fee or choose to be your own registered agent.

Market research

This is the process of gathering information about your target market. Find out where they are, what their preferences are regarding courier services, and how you can connect with them.

• Find out how to get independent courier contracts.
• Identify your competitors, their pricing structures, and their marketing strategies.
• Identify current trends and cultural values within specific geographic areas.

By doing thorough market research, you will save time and money and avoid making costly mistakes.

Operational efficiency

So, you have established the need for one, two or more vehicles in order to get your delivery business up-and-running. 

The next step in the process is your decision about how to manage your fleet in order to get the most out of them in terms of cost and longevity. 

Regular maintenance and servicing of your vehicles is possibly at the top of the list when it comes to fleet management. 

Vehicles that are not regularly serviced will eventually break down, leaving the driver and merchandise stranded until someone can get out to assist, annoying customers, and creating a backlog in deliveries. 

Your business cannot afford this scenario, and if it becomes a regular occurrence, you will lose customers.

With a fleet of delivery vehicles, costs begin to mount up. Aside from the maintenance costs, there is the high cost of fuel and the salaries paid to your drivers. 

Cutting down on vehicle staff is not necessarily a solution, as it may result in late deliveries and unhappy customers. 

Optimisation of your operational efficiency is key, and this can be done with accurate route planning. 

With some careful calculations, you can work out the most cost-effective route for your deliveries in terms of fuel costs and distances traveled. You can also try to include as many drop-offs as possible in one trip.

When planning the most efficient routes, fleet managers take the weight, volume, and type of cargo into account; perishables and emergency deliveries should be prioritized.

An automated system, such as the Track-POD route planning software solution, will handle all of this with a few clicks of a mouse. The Track-POD system calculates the shortest route for your deliveries and combines as many deliveries as possible into one trip. 

This saves time and fuel and could free up vehicles and drivers for alternate delivery routes. See how the implementation of a Track-POD routing system improved efficiency for ACDC Dynamics, and saved them time.

In addition to optimized route planning, Track-POD route instructions are communicated with your drivers on their mobile apps, making it fast and easy for them to follow instructions. 

Efficient communication lines between logistics staff and drivers empower managers to redirect vehicles, saving unnecessary time delays.

Customers are able to track their deliveries and receive electronic proof of delivery (ePOD) documents via email. The Track-POD system enables drivers to photograph proof of delivery, minimizing physical contact with other people for improved safety. 

In addition to route planning, you may also find that you need to track your vehicles. Track-POD’s real time vehicle tracking system means that you know where your vehicles and drivers are at any given time, and in the case of emergencies, you should be able to contact them and get assistance in as short a time as possible.

Getting independent courier contracts

This is possibly the biggest challenge for anyone starting a business. It helps if you have one or two contacts who have promised you work or have offered to pass the word around. However, not everyone is that fortunate.

To begin with, you will need a website that details your services and pricing, as well as some business cards and brochures if you plan on networking or cold-calling.

Start out by finding the companies that would be suited to your type of delivery. You can try calling on them and leaving a business brochure, followed by a marketing email a few days later.

Business information should include the type of goods you courier and, of course, your rates, with special deals if applicable.

Making a concerted effort to network with people should produce results in terms of useful contacts and referrals. Attend those school events and mingle with other parents, or attend social events and local council meetings.

There are websites like Shiply and CourierBrokers that connect couriers with potential customers, allowing you to bid for contracts. 

Advertising pays, but is usually expensive and often prohibitive for startup businesses. However, establishing a presence on social media is affordable, and by joining various groups, you can spread the word through blogs about your company and what you do.

Once you have established a client base, it’s sometimes just as difficult to keep them. Make sure your deliveries are prompt and that you communicate openly with your customers when experiencing problems such as late deliveries or breakdowns. 

Regular news emails about your company and how you are doing, sharing feel-good stories with them when you can, and of course, offering them special deals from time to time all go towards building good client relationships.

Operational excellence

It takes time and effort to get a business up and running, and it takes just as much effort, sometimes more, to keep things running smoothly, to make sure that costs are kept at a minimum and that the profit margins remain steady or are on an upward trajectory. 

You need to be prepared for some hard knocks, such as losing a vehicle in an accident or a general strike, which can cost your business hours of productivity. 

It is these knocks that can really damage a business that is already flailing, but if you ensure that your business is running at optimum efficiency, you will be more resilient if things do go wrong.

Operational excellence means keeping your vehicles in perfect running order by carrying out regular inspections and doing maintenance at suitable intervals. Train your drivers on best driving practices, with an emphasis on saving fuel and reducing wear and tear on the vehicles. 

By having the correct systems in place to plan your routes and keep track of vehicle performance, you can take control of your operation. In addition, a system that gathers data and produces reports that you can analyze empowers you to proactively manage your organization.

In summary

Before launching your courier company, you need to do your homework thoroughly. Assess the competition, their methods, and their strategies, and try to go one better. Determine your customer base and target them with as much energy as possible.

Determine your system needs and utilize their full capacity so that they add the maximum possible value to your business. 

Sort out your legal and financial matters as soon as possible and establish routines for checking vehicles and training drivers.

And finally, optimize your business plan so that you have a working document to guide you through your journey of building up a successful courier enterprise. We wish you the best of luck.

We hope this information has inspired you and invite you to share your success stories or questions below.