How to Start your own Delivery Service
To many it may seem starting a delivery business is one of the cheapest and easiest options for self-employment, as long as you have a reliable vehicle. However, it is not quite as easy as it might first seem. In many ways starting a delivery service business can be just as complex and costly as any other service activity. Even when starting a delivery service you need to plan very carefully, and that plan should include the following elements.
Aims and objectives
The most important first step for a delivery business is to know your goals and objectives. For example, is your intention for it to remain a sole trader business with no employees or do you have visions of expanding it into something larger? The same applies geographically. Will it concentrate on local delivery or venture further afield?
These questions will have an effect upon the way you construct your business and, potentially the level of funding required.
Costs
Step two is to accurately assess the costs the business will have to cover as this will determine the level of revenue you need to aspire too, and it may again affect the level of funding you need to start.
It is important to be realistic in your costing and not to allow optimism to creep in, as this is more likely to put you into financial difficulties. Similarly, make sure you have accounted for the unexpected. For example, whilst you have a reliable vehicle at present, how will you address this issue if that vehicle is off the road for a period? You cannot simply cancel customer orders, as that is likely to destroy the business. The same situation would apply if you, as the only delivery driver, become incapacitated. It is important to allow for these eventualities within your cost provisions.
Similarly, you need to apply the same approach to revenue. For example, although you may invoice for work done in month one, some of you clients may expect to pay monthly. This means you will not receive the cash into your bank account until month two. Therefore, you will need to have the funds to cover costs until the sales invoices have been paid.
Competitors
Knowing who your competitors are and how they are likely to react to you is also important. You will not be the only business promoting a delivery service in you area. Therefore, you need to research others who are in the same industry and work out how you can offer a better and more competitive service than they do.
Customers
Researching customers is also important. Just putting an advertisement in a local store or newspaper may not help you to reach the people who would want to use your delivery services. You need to work out who the most likely customers will be, which is probably the commercial business, and how you can reach them. In the latter instance, this may be by direct mail shots or promotions in specialist publications, or even hand delivery of leaflets.
Funding
It is essential to ensure you have the right amount of funding available when you start your delivery business. This should be set at a level that covers the first three months costs and allows for the time difference between issuing sales invoices and being paid. It must also include your own living expenses for that period.
Control and management
A system of business controls and management procedures is essential. This includes an accounting system to keep your financial position up to date, and a diary system to ensure efficient and accurate response to the needs and demands of your customers. Administering the business is just as important as selling your service to the customers if you want repeat business from them.
When starting a delivery business you need to set goals and objectives. Similarly, it is important to understand the impact costs are likely to have as well as a clear understanding of your potential competitors. Only once this information is to hand will you be able to assess the level of funding required. Once that is decided and acquired, then with a good system of business control and management you should be able to achieve your objectives.
