According to the IBISWorld report, the size of the delivery market in the USA is $113bn and totals more than 235 thousand companies. This industry is expected to increase in the next few years, as demand for delivery is growing. At the same time, the greatest interest takes place among the delivery of restaurant food and grocery. If you are thinking about beginning a courier business, you are on the right track. Nowadays, the opportunities are vast, so you can start a courier service with minimum equipment and a budget of just $1,000.
Develop a Business Idea
There are various types of delivery businesses. The first thing you should do is to pick up an idea and decide what goods or products you are going to deliver. If you have a few ideas, that’s good. Further, we will tell you how to evaluate them and choose the best one. But if you want to start an enterprise, and have not yet decided what it will be focused on, we have prepared for you a list of relevant delivery ideas that will always be in demand.
#1 Legal Notice Delivery
Despite the fact that many services have moved to the online world, the physical delivery of notices is still relevant. This includes notifications from courts, notices to the landlord or tenant, option agreements, and so on.
#2 Grocery & Restaurant Food Delivery Service
Upserve says that more than 60% of American customers order food delivery once a week, and the peak occurs on Friday, Saturday, and Sunday. Pizza, sandwiches, or restaurant delivery is an extremely popular service. Due to the coronavirus pandemic, contactless grocery delivery has also grown in demand. Another good idea is a narrow courier service, which is focusing only on eggs, bread, milk, or fruits.
#3 Coffee Delivery
Coffee is one of the most consumed products for breakfast, lunch, and even dinner! Many of us like to enjoy a cup of aromatic coffee. You can deliver the drink to the office or a home. But this business will be more profitable if you have a location surrounded by customers. It makes no sense to deliver the coffee, even of the best blends, if it has cooled down.
#4 Bottled Water Delivery
A person needs to drink at least 1.5 liters of pure water daily. So this business is always relevant. At the same time, you can serve a wide range of consumers, including offices, fitness centers, government agencies, shops, private houses, etc.
#5 Transplant Organ Courier Service
This business makes good money and saves human lives. The development of medicine has led to the fact that in the United States more than 36 thousand organ transplants are performed annually. Transportation of a body's parts costs a lot of money, but in order to start this business, you must meet strict requirements and get a state license. Express delivery is also essential since a kidney outside the human body can only survive 72 hours and a heart has no more than 4 hours.
#6 Pet Food & Medicine Delivery
American Pet Products Association conducted a study and reported that more than 71 million homes have pets. They are your potential customers. All of them need food, as well as monthly protection against fleas, worms, etc. All you need for a pet courier service to work is a website or a mobile application and a van. Besides, you can also use your garage as a warehouse.
Research Target Market
Once you have decided on an idea, it's time to conduct your own research. You must identify your niche and customers. If you have several business ideas, it is natural that the analysis must be done separately for each. It is worth paying attention to the fact that you should not provide services to everyone, doing so would require too much of your time and money. A business should be focused on those customers who really need the offered service. You can make good money even having a limited scope of clients, but it must contain people who constantly need a delivery. In this case, we are talking about the predominance of quality over quantity.
When making an analysis of the target market, Mike Kappel, the entrepreneur, and author at Forbes, advises focusing on the five Ws and H of your potential customers. His approach is as follows:
- Who: Decide on for what consumer your delivery service business will be oriented. Your research should include gender, race, age, education, average income, and even profession. “Deliverect” made the average profile of a food delivery customer; it turned out to be a male aged 25-43. The more information you collect, the easier it will be for you to create effective advertising.
- What: Now decide what attracts your potential clients, what kind of delivery they need. Perhaps they are interested in the delivery of medical equipment or documents. Determine if they need extra services that you can provide.
- When: Investigate when consumers need a delivery. Perhaps it will be weekly, monthly or a one-time service. Take time into account. Food delivery should be instant, but if we talk about the delivery of furniture, clothes, or other goods, then customers may want to receive them on a certain date and time.
- Where: Determine your customers' location. Investigate where you can serve them and how relevant your courier enterprise is. For example, if you want to make a coffee delivery business, you should focus on business quarters.
- Why: Analyze why your customers need a delivery. Perhaps these are people with disabilities or they are too busy to shop on their own. Such knowledge will help you make a client-oriented service and achieve more profits.
- How: Examine the behavior of your customers. How they act, their buying habits, and hobbies.
Having collected the most detailed information about your potential clients, you can think of a competent strategy to capture the market, as well as the most effective pricing policy. But it is equally important to study your competitors, find their weaknesses, and use them as your advantage. Comprehensive market research is what helps avoid collapse.
Make a Business Plan
If you are focused on small business, you might think that you don't need a business plan. But you should not think that way. This document will help you determine the steps needed to achieve success.
A business plan is the basis of how you will conduct your business. This is a document with calculations, analysis, and economic feasibility of the company. It greatly facilitates commercial activities. In addition, you definitely need a plan if you want to attract investments or get loans for the development of the enterprise.
Main parts of this document are as follows:
- Summary - Begin with a short description of what your company is. Write down its name, type of delivery service, your mission, and business plan goals.
- Company Description - Write more about the service you are going to provide. Which companies are you going to collaborate with to build a courier business? Probably, it will be restaurants, pharmacies, grocery stores, etc. If you are going to make a partnership with logistics companies, also list them in the plan. Indicate how you intend to deliver products. It could be a bicycle, car, van, or even shipping. It is also essential to formulate the short-term and long-term goals of your company.
- Services - Describe in detail which particular products you want to deliver. List the advantages of your business over competitors.
- Market Analysis - This section should contain a description of your target consumers, market prospects for the development of your business, as well as competitors.
- Operation Plan - This is the largest part of the document. You must describe in detail all steps and activities necessary to organize your delivery business from scratch.
- Strategy and Implementation - Additional important information that you must disclose is the strategy for entering your business on the market and how you plan to conduct it further.
- Organization and Management - If you have partners, list those people and their responsibilities that will help to lead your business.
Build Your Reputation
In the modern world, reputation is of great importance, and your positive image will attract more customers and increase profits. So we have compiled a list of simple steps that you must take in order to build a strong reputation when starting a delivery service. Don’t forget to consider them and put them into your business plan.
Do constant cleaning
Your vehicle should always be clean, both inside and out. The cleanliness of your truck is also a guarantee that the packages will be delivered neatly. Customers are unlikely to use your service again if you bring dirty goods.
Be polite and courteous
Your business must be customer-oriented if you want to succeed. Always be friendly and attentive when dealing with consumers. If you have hired personnel, train them in the proper interaction with clients. Make clear rules and protocols for communicating with consumers. Taking care of your reputation, you should also create a positive atmosphere within the company. Be polite and attentive too when dealing with your subordinates.
Ask for feedback
After each delivery, ask consumers to tell what they liked and didn't like. Use calls, text messages, or online forms to get their answers, for example, Google Forms. This is a good way to find out about your shortcomings. The questionnaires will help to eliminate weaknesses and focus on the benefits.
Create a loyalty program
Show that you really care about your customers. Create offers through which they can save and more actively use your services. For example, you can make every 10th delivery free of charge or reduce the cost of courier services for customers who have made a certain number of orders. Remember, a strong business is built not on people who use your service once, but on those who become your loyal customer.
Take care of speed
Most consumers choose a courier depending on the speed of delivery. You must provide expedited service. If you can’t afford it for all customers when starting a business, focus on those clients who are within your reach.
Register a Business
Register your company within the state where you are going to have activities. You will need to fill out a form (you can also do this online) and pay a fee, which varies from state to state but does not exceed $800. The most useful option is the creation of an LLC. If your business fails, you will not be personally responsible. The next step is to submit an application for a tax identification number at the IRS website. This is necessary to obtain a number of documents, such as permission to conduct business and to create a bank account.
Depending on the type of delivery you intend to carry out, you need to get a license. Contact the business license bureau (local department of licenses and inspections) to find out what type of permission is required for your business. There you can get samples of all the necessary forms and fill them out. Usually, the license will be ready within 10 business days.
If you are going to use heavy vehicles or transport hazardous materials, you definitely need a commercial driver's license (CDL). In order to get it, you must complete the appropriate program. Visit your state’s DMV website for a guide. Note that the rules and requirements differ from state to state.
Before doing business, you need to register for a variety of state and federal taxes. So you have to apply for an Employer Identification Number (EIN). This number allows the IRS to track taxpayers, as well as their financial statements. You can get a number absolutely free.
The next thing you should do is open a bank account and get a credit card for doing business. All the financial activities of your company should be carried out on commercial accounts in order to protect personal assets. This is also a good way to create a positive credit history for your business.
A responsible owner must take care of the insurance of their company. When delivering, you will need to protect the vehicle, cargo, and possibly even liability insurance. Having an insurance policy, you will demonstrate your reliability. The cost of insurance for a business depends on the type of delivery and your location.
How Much Does it Cost to Open a Delivery Business
Let’s calculate the initial amount that you need to run a company. We have compiled a general list of costs that a delivery business may face. But note that costs can vary greatly depending on the type of service provided. See the checklist below:
- Business registration - Fees vary from $100 to $800 depending on the state.
- CDL - The price for a training program depends on the vehicle you are going to use. It could cost from $1000 to $8000. But if you are going to make your deliveries on a bike, you don't need a driver’s license.
- Licensing - In order to get a state license, you will need to pay an average of $100, but fees may vary by state.
- Purchase of van or truck - If you do not have your own vehicle, you will need to buy or rent it. The purchasing price for the van could be $18,000 - $50,000. If you are thinking about rent, consider spending $25 - $100 per day.
- Insurance - The policy may cost $350-$700 per month depending on its type.
- Fuel - The average fuel cost for a truck is $12 per hour. Of course, if you have a bike, you do not pay for anything.
- Vehicle maintenance - You will need to inspect the machine, change fluids, and replace damaged parts. It will cost you approximately $100-$200 monthly.
- Drivers’ salary - If you have employees, you should take care of their compensation. The average salary for a driver is $15 per hour.
- Promotion - Make yourself known and attract customers through advertising. You can run an online campaign, print flyers, and order ads on the radio. The budget can vary greatly depending on the scope of tasks. But count on the price starting from $50.
Software development - The best way to make an effective company is to provide services using a website or mobile application. When starting a delivery business, make sure you have reliable software. Even if your company will be based on bike delivery. The price for development starts from $500 but can be much more, depending on the needs of the business.
KeyUa provides quality software development for every niche in the delivery industry. With extensive experience, our team quickly builds reliable and cost-effective projects.Create a Project
How to Set Up a Delivery Service
Quality management of the company consists of monitoring financial activities and achieving strategic goals. Therefore, one of the most important processes is accounting. You must accurately understand your company's profitability and expense items. It is recommended to use convenient software such as QuickBooks, Freshbooks, or Sage 50. It is good if you can hire an accountant, but this software allows you to easily manage records yourself.
Create a Website and CRM System
Almost all businesses are now integrated with the Internet, and most customers order services online. A good website is a platform for the continuous reception of orders and attracting new customers. So when determining how to start your own delivery service, we suggest building a web app or a company website. Also, pay attention to such tools as CRM.
Customer Relationship Management software provides lots of benefits. It allows you to easily analyze your sales and orders, manage them, store all the necessary information, and even build relationships with customers. The following types of systems are popular:
- Operational - This type is aimed at developing marketing and increasing sales. Such CRM allows you to attract new customers and suppliers, as well as conclude profitable deals. You get access to customer contact information and order history, making it easy to track their activity and find the strengths and weaknesses of the business.
- Analytical - This system aims to manage customer data and generate reports. You can track which groups of consumers you are most in contact with, including age, gender, and other statistics. Such an app is widely used when expanding a business or taking on a new niche.
- Collaborative - This system allows you to build strong relationships with customers. It is based on newsletters, phone calls, social networks, and other communication channels. Its goal is to provide quality customer service and improve the work of the internal team.
Depending on the needs of the business, you can combine these systems, building custom applications. When ordering software development, you can specify any goals that the finished product must meet.
The online world provides lots of ready solutions, like Pipedrive or Salesflare. And they really work well. But, if you want to conduct your business in a quality manner, you should take care of the custom development of CRM systems that will fully satisfy all the needs of your company.
How to Get Your First Customers
You probably have settled all the legal aspects, created your own brand, and have even found suppliers. Your next steps should be focused on finding consumers and building a customer base. Many startups wonder where to get customers. So, let's consider the main sources.
Your friends, relatives, neighbors, and acquaintances can become your potential buyers. Do not hesitate to promote your services through your environment, and also ask them to recommend your delivery to their friends or colleagues.
Facebook, Youtube, Instagram, and other social networks are excellent platforms for increasing sales. Make a nice profile of your business online by uploading beautiful photos and catchy texts. According to a Buffer report, more than 85% of businesses admitted that social networks are "very important" and " somewhat important" for running their business. In addition, social networks also offer built-in tools to promote products or services.
Print ads are still relevant despite the era of the internet. But with an active global eco-movement, you should address it reasonably. It’s also a good idea to order ads on billboards or special trailers, busses, etc.
Online Digital Marketing
Buy ads on special online platforms or order articles about your service that lead to your website. The advantage of digital marketing is that it uses various online and offline tools to attract customers.
This is a convenient platform that connects truck owners and people who need a delivery. You can choose any orders you like, as well as protect your earnings. In addition, the platform also provides cargo insurance. Therefore, this is a great opportunity to start your own small business with minimal risks and investments.
Make a referral program
Let your clients bring new customers. Create programs that motivate your consumers to expand your customer base. For example, provide discounts on delivery to users who attracted extra clients.
Use Google Ads
Promote your service with Google tools. You can set up convenient ads for your landing page with even the smallest budget. In this case, you need to think carefully about the target audience and keywords.
How We Can Help You
KeyUa has over 12 years of experience in custom software development. We provide unique solutions for startups and large corporations to effectively manage their business. Our seasoned pro team accepts challenges of any complexity in order to develop software or a mobile application for the needs of your business. We adhere to a philosophy of full customer satisfaction.
Our company offers outsourcing and outstaff services that work efficiently to reduce development costs. Flexible prices, transparent process, high-quality delivery, and excellent customer communication are our distinguished features.
KeyUa is your reliable partner in the world of solid software development for the delivery industry. Collaborate with our team to build a successful business.Contact Us