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What You Need to Know Before Starting a Courier Business

June 25, 2018 739 views

Image of a Courier Business

How To Start A Courier Business

A Courier business can be a low-investment startup. You may transport important documents, flowers, small packages, or even biological samples.

The biggest issue that separates this a privately owned company from the larger delivery companies like, UPS and FedEx is same-day service, and deliveries within an hour or two, as well as odd hour deliveries.

While these larger companies may guarantee next day service, small couriers tend to operate inside a less-than-24-hour time frame.

Courier Business Considerations:

There are a few things to consider when starting out.

  • First, think about the location. Small towns and rural areas may not need a courier service at all.
  • Second, think about the type of service that you would like to start. Some couriers only pick up and deliver medical packages, and for example, court documents.
  • One key to success in this industry is on-time deliveries and careful handling of packages.
  • Personalized service is something you can offer. Getting a few clients that need you to make deliveries on a consistent basis, will keep you busy as well as give your business a steady stream of revenue.
  • Another critical factor is commercial insurance. The cost depends on the type of vehicle you have, the insurance rates in your area, the area you’ll be making deliveries, and the amount of driving. Don’t make the mistake of using your personal vehicle with personal insurance. If you have an accident, and it’s discovered your using your personal vehicle for commercial use, your insurance could become void, and that could be a hit that will put you out of business.
  • In addition to insuring your vehicle, you’ll want to have cargo insurance. What if you’re delivering a 40,000 dollar item and it gets stolen or damaged? You are liable. Take the time to speak with a qualified insurance broker to get the coverage you need so you can sleep at night!
  • Think about the size of the vehicle you will need. Larger vehicles can carry more cargo, but require more fuel, and are harder to park if your deliveries are in the city.
Courier Skill Set:
  • Good driving skills
  • A good sense of direction and navigation
  • The ability to lift heavy packages
  • Loading and organizing packages that can be delivered according to route
  • The ability to schedule deliveries and pickups
  • Good communication skills
  • Operate and park a vehicle in high-traffic areas
  • Use GPS
  • Time management
  • Dispatch management
  • Must be highly organized
  • The ability to meet strict deadlines
  • Common Business Skills
Approximate Daily Hours Needed To Run A Courier Business:

General Hours of Operation:

While most deliveries fall within the normal hours of 9:00 a.m. to 5:00 p.m., other delivery jobs may require delivery at any hour of the night, or earlier in the morning.

Before and After Hours:

Plan for about an hour’s worth of paperwork, vehicle inspection and clean up before or after each day.

Employee & Job Consideration During The Start-up Phase or In the Future:
Licenses:

See our Page On Licenses and Permits

Approximate Minimum Courier Startup Cost:

The average startup cost can be very small if you already have a reliable vehicle and GPS; however, it can cost several thousand dollars for a new vehicle, GPS, and dispatch equipment.

Equipment, Supplies, & Services During Start-up or In The Future:
  • Reliable vehicle(s)
  • Logbooks
  • Moving dolly (possibly)
  • Uniforms
  • GPS or quality map
  • Courier software
  • Dispatch equipment
  • Storage area
  • Skids and shelving for storage
  • Office Equipment
Monthly Expenses to Consider:
Special Requirements:
  • Possibly a CDL (commercial driver’s license)
  • Commercial vehicle insurance
  • Cargo insurance
  • Dangerous goods certification
Courier Business Pros and Cons:

Pros:

  • Service is in high demand in many areas
  • In some cases, you are able to set your own hours and limitations
  • Low startup cost
  • Low operating costs
  • Very profitable with the right market

Cons:

  • Odd hour pick-ups
  • Some jobs may require you to travel away from home
  • Lots of time on the road
  • High vehicle and fuel costs
  • Vehicle maintenance cost
  • Increased risk of accidents
  • You’ll most likely have to deal with traffic jams on a daily basis
  • It may be difficult to have steady work unless you can land a few contracts that have consistent deliveries.
Type of Customers You Need to Attract As A Courier:

According to the Messenger Courier Association of America (MCAA), customers may include biomedical labs and other medical facilities, financial companies like banks, and law firms. Other customers may be manufacturing plants requiring time-sensitive deliveries as well as other types of establishments in need of quick deliveries.

Courier Business Statistics:

The MCAA reports that there are over 7,000 small business couriers involved in the multi-billion dollar industry.

The Bureau of Labor Statistics (BLS.gov) reports that there are about 122,000 couriers and there is no estimated change over the next decade.

Courier Business Revenue:

Revenue differs depending on location and how you charge. Couriers can charge by the mile, hour, or a flat rate depending on zones.

For example, Clutch Couriers based in Santa Cruz, CA charges $10 USD for basic deliveries inside of Santa Cruz, and rates increase the farther the delivery is from the city, up to $40 USD. Clutch Couriers also charges more for rush deliveries and court deliveries.

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