3 Questions You Must Ask Before Starting a Delivery Company
Starting a delivery company can be a great way for people to venture out into the world of small business. Anyone thinking about starting a courier service needs to consider three basic questions as they get going.
What will you carry?
The first step in determining your business model is to figure out what type of parcels you would like to deliver. First, you will need to settle on either business or residential deliveries, or a combination of the two.
Think about what types of services you would like to offer.
If you would like to focus on fast, secure deliveries, it probably makes sense to work mostly with businesses. But if you are also offering packaging and printing services, you can also be of service to individuals who may not send packages so frequently.
It’s also important to consider what types of packages you are going to deliver.
If you have a mid-sized vehicle, for example, you won’t be able to transport packages that are too large. If you cannot offer extremely fast service, it may not make sense to deliver envelopes for businesses that need fast transportation of documents.
Where will you carry it?
The next consideration should be your business area. This will depend on how much business you expect to have in the local area and also how much capacity you have for longer-distance travel.
If you have multiple employees, traveling outside of the immediate area is much easier.
If you are working by yourself, on the other hand, it may be more difficult to visit multiple locations that are far from each other every day.
The volume and speed of your business should be determining factors. Don’t guarantee fast delivery if you need to travel all over the area every day. But if you don’t have enough business in the immediate area, it might pay to expand.
How much will you charge?
The pricing of your services should be based on a combination of the above considerations. First, take a look at the prices of your competitors.
Keep in mind that big companies like UPS have a very different business model from the one you are using for your courier service, so you don’t need to model your prices on theirs.
It makes more sense for you to consider the prices of businesses that are similar to yours in terms of scale and your service area.
The baseline of your price should be the mileage covered for each delivery.
Set a certain price for deliveries in the local area, and think about raising that price slightly for deliveries that require traveling a longer distance.
Also, factor in flat rates for standard envelopes and packages, along with additional fees for larger parcels.
You will also need to set up pricing for special situations, such as those that take place after hours or require express delivery.