21 January 2020
By Roger Jones
Setting up a courier business in the current climate seems like it might be a good idea. While there is plenty of competition from larger brands, there’s always space in the market for someone new. A growing number of people are ordering online nowadays instead of popping to the shops, which means there’s greater demand for delivery services.
Of course, it’s still important to plan and prepare when you’re setting up your courier business. Here are some of the things you should think about before you get into this industry.
One of the first things you need to define is how far your drivers are going to travel. It isn’t good enough to just say “the local area”, you need a specific boundary. This will help you calculate driving times of your drivers to make sure that you are staying within the legal limits.
You also need to be aware of certain geographical changes which might make delivery more expensive. For example, many companies charge extra when delivering to the Highlands and Islands of Scotland, since lower order delivery volumes for these remoter areas make economies of scale more difficult to achieve.
Price and Care
You will also need to come up with a reasonable pricing scheme. There are two major paths you can take – cheap and cheerful or higher-cost and caring. If you are cheap enough, you might manage to undercut your competition. However, you will then be putting a lot of stress on your drivers to complete all their jobs. They might start to be careless with packages; either delivering them damaged or not delivering them at all but claiming that the recipient wasn’t in simply because they did not have enough time to attempt delivery.
Therefore, it might be better to put your prices up. It might not seem like a good idea but you would be surprised at the number of people who are willing to pay a little more if it means that their package will be delivered safely and in perfect condition.
As with any business, you need to consider overhead costs. From how much you need to pay to have your vehicles serviced to the premiums you pay for your courier insurance, you need to have a clear idea about what each part of the business will cost you.
Calculating your overheads as early as possible will be extremely beneficial as it will allow you to see where savings need to be made in the early days. For example, you might want your role in the company to be purely office-based, but you might need to make a few deliveries in the early days before you get enough staff. This will require you to have a vehicle to use plus courier insurance, and the cost of all of this adds up.
Starting a courier business offers some unique challenges and the right person should be ready to tackle them head-on. If you think this might be the right sort of company for you, take a look at your local competition and start planning your company now.