Sunday, December 11th, 2016

How to Achieve Explosive Startup Growth

25

"Unless you spend the vast majority of your money on advertising (not a good idea!), you are going to get most of your clients by hitting the streets, knocking on doors, making phone calls and building your network of contacts."

Many people assume that starting a business means working 16-24 hours a day for the first few years. While some people take this approach (and even think it helps!), it is not necessary. In fact, it might actually be counter-productive.

One of our readers, Tony D., raised the question about startup hours, and my response to him turned into a treatise on the basic steps to starting a courier and delivery service business and designing that business to fit your lifestyle goals.

After all, what fun is starting your own business if you can’t work decent hours and get eight hours of sleep a night?

Tony D.  wrote:

“What about my hours, can I make a profit if I don’t operate 24hrs a day like the big guys? I mean I have to get some sleep in sometime, At least until I can hire additional help.”

Here is my rather lengthy reply:

Hi Tony,

No, you don’t have to work 24 hours per day like the big guys to make a profit.

In fact, I would think that you would kill your profit if you try to do that – and more importantly, you would have no life.

I started my courier service 20 years ago and can say that I have maybe received one phone call late at night for somebody who wanted a delivery. It just doesn’t happen that often.

My hours are a little longer than typical business hours. I generally work from 7 a.m. to 7 p.m. But this is not constant driving. I have breaks in there. For many years I did all of the driving by myself, and even then it was generally 9 a.m. to 5 p.m. normal-business-hour driving. And these days, I have drivers to help with deliveries, so I drive even less.

Of course, I don’t live in a major metropolis. Maybe if you are operating out of NYC or LA then all-night delivery may be a profitable niche. For the vast majority of courier service owners, however, you would go out of business trying to be open 24 hours a day, because you would never, ever get any phone calls.

What Your Ideal Clients Look Like

Out of all of my clients, 99.9 percent are businesses that are on a set schedule. Rarely do I ever get calls out of the blue from someone who needs a delivery that day. Rarely do I ever get calls from someone needing a one-time delivery. I have intentionally created my business this way.

I don’t advertise for express delivery or same-day delivery and definitely don’t offer 24 hour per day delivery. I only do scheduled deliveries because that is where the demand is and that is where the money is, at least in my part of the country.

When I started my delivery service, I figured most of my business would be from people needing deliveries immediately or within a couple of hours. It just didn’t work out that way.

The clients that I found wanted someone to pick up their mail at the post office at the same time every day, they needed inter-office deliveries every day at the same time, multiple times per day, or a pharmacy wanted me to deliver its medications every day at the same time.

These types of scenarios are what you are more likely to encounter. And frankly, these are the clients that you want. Maybe four or five times a year I get a phone call for a one-time delivery, and I usually refuse to do it.

One-time deliveries screw up my delivery schedule, and there’s no money in them. You do the delivery and that’s it, they may or may not ever call you again. What you want are clients that use you on a regular schedule — that way you can organize very efficient routes and maximize your income, while minimizing driving and expenses.

I have my schedules so tightly packed that one random delivery is just not worth throwing off the schedule and having to deal with invoicing one delivery and then making sure the client pays me.

It may be worth it as a new owner to take anything you can get, but once you’re established, you won’t want to waste your time with these non-scheduled deliveries. Your delivery schedules, for the most part, are going to be regular business hours because you will most likely be delivering things from one business to another business, during the hours between 9 a.m. and 5 p.m.

How to Find Your Ideal Clients

The other thing I want you to realize is you are not going to get a lot of phone calls, maybe just four or five A YEAR.

Unless you spend the vast majority of your money on advertising (not a good idea!), you are going to get most of your clients by hitting the streets, knocking on doors, making phone calls and building your network of contacts.

The overwhelming majority of my clients had never used a courier service before and had never even thought about using a courier service until I came to talk to them about what a courier service does and how we can help them in their business.

What this means is most of my clients never would have called me or any other courier service because they didn’t even know they had a need for a courier / delivery service. This is an industry built on relationships. People don’t just pick up a phone and call a random courier service.

You are going to have to make contact with your first potential clients and educate them. Once you get some clients set up, then referrals from existing clients will be your best source of new clients.

The fastest way to get started is to subcontract work with other couriers in your area, then check out our list of “Businesses Most Likely to Use a Courier Service” (in Zero to Sixty Documents Kit) and call these types of businesses first.

Also, join your local Chamber of Commerce and network with other local business people. You will soon be growing a list of contacts that will refer business to you.

Again, let me warn you:

If you think that advertising in the yellow pages and the newspaper, putting up flyers, and setting up a website will make the phone start ringing off the hook, think again. That strategy will not work and you will be out of business before you even get started.

This is absolutely the worst thing you can do! Don’t even think about it!

Why? Your first clients are going to come from active prospecting, not from advertising. Prospecting is getting on the phone, going door-to-door, and finding your future clients. Advertising is getting them to come to you. Prospecting is the fastest way to get new clients – advertising is the slowest.

I know this is probably disappointing news. The last thing most people want to do is to buy a suit and start knocking on doors, but that is the key to startup success.

When I started, “sales” was absolutely the last thing I wanted to do. I am not the salesman type. I didn’t like asking for the sale and was frankly not comfortable even making the phone call to set up an appointment.

And “not comfortable” is an understatement. I was pretty much in full-blown panic attack at the idea of contacting clients and talking to them about my business and then trying to close the deal, but I did it.  I did it because I was totally committed to making this thing work. There was no way I was going back to the cubicle life.

I was going to make this work if it killed me.

That is the attitude you must have, not only with the courier business, but starting any business or any new endeavor in your life. You must not do anything half way. You must be totally dedicated and determined to succeed.

That does not mean you will sell every client you talk to or that everything you try will work out. Expect to get far more rejections than not, but remember that it doesn’t really matter, it is all a matter of numbers.

If you sign only one out of 50 clients, then all you need to do is approach 500 potential businesses to have 10 clients. And remember, each active client you have is a future source of many referrals and much future business. So you won’t have to go door-to-door forever. But if you don’t, it will mean a long, slow startup for your business.

It’s all in the numbers. You must keep trying, you must keep making mistakes. Think of each mistake or each rejection as a rung on the ladder to success. We learn through trying and falling and getting up and trying again, just like learning to ride a bike!  If you persevere you cannot fail.

Comments

25 Responses to “How to Achieve Explosive Startup Growth”
  1. john says:

    i am about to start a delivery service and i have never been involved in sales or advertising. i laso like the idea of schedule deliveries which i think will be a success where i come from. The prospecting you talked about is something i have learnt from you but my challenge is how do i convince prospective corporate clients and make them see reasons why they need my service. in other words what and how is the best way to convince them so i can pitch scheduled deliveries. i wouldnt mind a guide on sales sent to my mail box. Thank you.

  2. Fred Mayo says:

    Real useful information thanks. Decided to purchase the start-up kit but unemployed right now so it will take a few days to scrape up the money.
    Was curious about contacting businesses specifically who is it that you are contacting ie. sales, HR, Finance etc.

  3. Chris says:

    Can you help me with pricing points? How much do you charge and what kind of profit can you really make?

  4. gino says:

    I. Want to start a delivery service for online. Shopers etc,basic delivering packages and stuff,I have no clue where to begin. Could you please give me a layout plan on whatt I need to begin

  5. patricia ken-osazuwa says:

    hello all, i’m about to leave the cubicle life and venture partly into the courier business and your comments have been so helpful. but i think walking door to door fulltime, introducing your business might sound quite archaic. door to door can be replaced with social networking on facebook, twitter and the BIS. you should get same or close enough results as in my part of the world, a lot of people might not want to open their doors to strangers. backing it up with the yellowpages can also serve as an added advantage. all of these gives the business the required professional touch.a bit here n there , backed up by the zeal to succeed goes a long way. i’ll keep you posted as th e journey continues cos i knowits going to be good.

    • udo says:

      hello, please kindly update me on the success of your courier service. did you go ahead with the plan, is it successful..please get in touch with me i need people like you for inspiriation

  6. Scott says:

    Hi,

    I love your website. I own and operate The Best Courier Service Ever, Inc since starting it 2005 with my wife. I’ve thought about putting a website like this together for a long time. You’ve done a good job of putting on paper how you’ve been successful in the courier business. I found it actually quite difficult to describe in writing some of the things that you’ve described quite well. Thank you for the site.

    We have been profitable in supplying “on demand” work and it’s one of the ways we were able to gain valuable experience and reach new customers. Of course, we are in a market (Washington DC) that can bear the premium fees to provide such service as opposed to the “scheduled” routes. We now have a handful of scheduled routes to supplement our on demand service and they are definitely valuable, but we continue to support the on-demand work partly out of necessity and partly because it gives us reach to new customers.

    Thank you again for your site, Scott Kristiansen

  7. Sam Knowlton says:

    Jim,

    As far as I know, a ‘specialist courier’ is simply a courier that adapts their business to serve one particular niche. For instance, human organ transport. This is a great way to market your business IF you are in a position/location that can support it.

    As for your other question, specialist couriers can make up to a million billion dollars a day! Just kidding. In any field, potential income depends on so many factors that it’s useless even to speculate.

    Your work ethic, creativity, business sense, and marketing ability are all vital in building a business, not to mention your geographic location and niche. But it’s a very common question.

  8. Jim J. says:

    Hello. I have heard of a term, ‘Specialist Courier’. Have you ever heard of it and exactly what does it mean? How much can a ‘Specialist Courier’ possibly make in a day?

    Thanks, Jim

  9. Randy says:

    How do you handle phone calls when you are starting out? Do you use your cell phone (as you are on the move if you have a delivery) Do you get a dedicated line to start? or use your existing?

    • Sam Knowlton says:

      Randy,

      When starting out you will certainly want to use your personal cell phone. Switch over to a business line if and when this becomes necessary, but don’t assume you’ll need a dedicated line.

      If you are concerned about taking calls when you are not working, try looking into Google Voice. This (free) service provides you with a second phone number that forwards to your cell phone. It also allows you to pre-screen your calls and/or send all your calls to voicemail after a given time. Check it out at http://www.google.com/voice .

      Cheers,
      Sam

  10. Sam Knowlton says:

    Skye,

    Check out our article on “How to Determine What to Charge”:
    http://www.courierpros.com/2010/03/how-to-determine-what-to-charge/

    Cheers,
    Sam

  11. skye says:

    How do you know what fees to charge? What are your rates for deliveries?

  12. Darren says:

    Hey i started up a courier business a couple of months ago and i specialize in same day delivery i have joined the chamber of commerce and i have advertised on the internet but things are still very quite do ye think starting a courier business with same day delivery is a good idea? i thought a lot of people would want this.

    • Sam Knowlton says:

      Darren,

      Same day delivery is one thing that courier services can excel at that UPS/Fedex don’t touch. The trick is finding the right clients who need your services day after day.

      Best of luck,
      Sam

  13. Sam Knowlton says:

    Alex, you bring up very valid points. Particularly about the importance of thinking ahead to ensure you can preserve your desired lifestyle even while starting and growing a business.

    For many people, I would expect there would be a period of time before hiring the first driver when things could get quite tricky as far as managing the client base as well as handling any eventualities, whether that’s a vacation, a sick child, or even a simple flat tire.

    The “on demand” delivery business presents significant logistical challenges. Unfortunately, the reward is often far too small to justify the level of stress and hassle that can come along with it. Unless you are just starting out and really have nothing but time, have enough extra manpower that you can spare someone who can deal with on-the-fly deliveries, or are working major lead, steer clear! Your time will be better spent finding consistent, high volume clients.

  14. Alex Shapiro says:

    Hi there. I started my own courier business 12 years ago. I never worked in courier industry before.So, at the beginning, I couldn’t even figure out who to call. I agreed with many things you said with couple exceptions. First at all, a model of business you described work for someone,who wants to be a solo driver. Work only “9-5″ and no extra calls from yellow pages? So, is it business or self-employment as a driver? For example,who covers for you on vocation? Or you work 365 days a year? Do you take any days off? I have same problem in my small business.I can’t leave it for a long time,because I am a manager-dispatcher in my business,plus driver sometimes. Second,advertising in modern business world is very important. Not that advertising in some local newspaper,bu to be present on any search engine on Internet. For that you need to build a website. It very inexpensive. You can receive ready to go website modules from host companies. Your own website will give your small business a very professional look. Big clients want your business to be professional. I deal with small and big clients. If you want to make money,deal with big players. I too, have a regular clients every day, but I always take any order from”out of blue”. I have some regular and back up drivers for that. I pay them up to 60% and make myself another 40% from price of that delivery. It is suicide to refuse a potential client. Business flexibility is really important in our business.Although, I personally don’t like so called”on demand” delivery. Numbers in customers and reliable drivers are key to success in our very difficult business.

  15. joy watkins says:

    I am retired, but need additional income to continue the lifestyle i THINK I need. I have been in the workplace for more years than I care to divulge. I am determined, logical, thrifty, well-spoken, etc. I WANT to continue to be productive, but on my own terms. I want to remain productive, but as an employer rather than an employee. Being productive is an important requirement in my life, and I have ALWAYS wanted to own a business!

  16. Lucas says:

    I am in the courier business and we are mostly doing hot shots and air cargo, but its hard to keep drivers happy, so to keep them busy, I have started to look for alot of route work… Where did I get the “lead list”? Well, from a disgruntled employee of a competitor.

    The problem is that alot of these companies are happy working with someone else. Do you have any “business to business” techniques you use to get clients to switch services? Thanks

    • boblsky says:

      Hi Lucas,

      I do not have any experience getting clients to switch services. I have gained new clients who were dissatisfied with other services and then called me. The best advice on can give on this topic is some insight on buying behavior and my personal selling experiences.

      The vast majority of my clients have never used a courier service or even thought about it before I talked to them about our services and how we can help their business. I get a lot of my mail clients this way. Any business that has a PO Box has to pick up their own mail and most companies just send an employee out to do it. They also have to take their outgoing mail to the Post Office in the afternoons as the Postal Carrier does not pickup their mail either. As most clients want their mail in the morning and drop off at the post office in the late afternoon this is an easy way to group multiple clients together for economies of scale. I think postal mail and pickup will be a great opportunity to check out. Rather than try to compete for customers with long established relationships with rival couriers I would look into markets that don’t typically use couriers and see if they have a need you can fill. I found the route deliveries so profitable and predictable that I don’t even advertise hot shots or even same day delivery I only want customers who I can put on a set schedule. This way you can really fine tune your delivery routes for maximum efficiency and establish the coveted long term relationship with the client. I specialize in post office mail pickup and delivery, interoffice deliveries, contract and commercial pharmacy delivery, and accountants and insurance companies. I have tried to break into the bank courier delivery for a long time but banks are very unwilling to switch delivery services.

      The couriers in my area that do a good job of stealing business away from other couriers always do it based on their low prices. The downside is the quality of their service is terrible as they don’t pay or treat their drivers well and thus have constant turnover of drivers. The drivers are always brand new, inexperienced and inefficient. You can’t win against these guys, that’s why I find niches where I don’t compete with them. I can afford to charge more for my services because I break my back to give incredible customer service and I pay my drivers well above the standard rates. My drivers have been with me for years and are impeccable. It’s worth it because my clients are super loyal to me, they trust me completely and know we do a first rate job with their deliveries, solving their problems and being professional. A great reputation is your biggest asset, it builds your brand and inspires trust in the business community.

      My one technique for winning over clients to your service is to establish a personal relationship with these people, get to know them over time. The best way to do that is first to have a great reputation, and provide testimonials from happy clients, better yet give them your clients phone numbers and let them rave about you! Don’t do a hard sell, but take it slow, you have to build a rapport and gain their trust. Have a lunch meeting with them, take them someplace nice, but keep the conversation casual with no selling pressure from you. Find out as much as you can about what they do, what their frustrations are, and what their needs are. Keep doing this, maybe once a month check in, buy them another lunch. People feel obligated to you when you give them things, why do you think pharmaceutical reps are always handing out coffee mugs, ink pens and note pads. These things cost nothing for a drug company but create a feeling of unbalance in the client, eventually they feel like they owe you, and more importantly that they know you and can trust you.

      The courier business like any service business is based on relationships and referrals, very few people pick a courier out of the yellowpages, they call their friends and see if they can recommend a courier they use. Just like when I need a plumber the first phone calls I make are to my friends so I can get their opinions. If you want to win clients away from other couriers and don’t want to drop your rates to rock bottom then you must grow your network of contacts. Join you local Chamber of Commerce, volunteer at your Church or Hospital or Habitat for Humanity etc. Volunteering is a great way to meet lots of people who are all going to ask you what you do for a living and thus are all potential clients and sources of referrals.

      Thanks for your question, good luck and, let us know how things develop!

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!