How to Start a Delivery Business [Investment, Profit Margin]

. 6 min read
How to Start a Delivery Business [Investment, Profit Margin]

If you are nagging about your 9 to 5 job, you should quit and do something independently, like starting a delivery business. However, know that it isn’t going to be easy, and you will need to put in all the hard work if you want to start seeing profits. While there are many business ideas that you can develop, having a delivery business sounds feasible as the start-up costs are low compared to other companies. Plus, you also get to be your boss.

So, are you curious to know how to start a delivery business? Then here is what goes into making it tick and successful.

1. The Niche

Before you can begin, you must come up with a delivery business idea. That is a profitable niche in the delivery segment. For instance, you could start a delivery business in the food or courier niche. Likewise, you could also have an online delivery service where you can partner with giants like Amazon or Flipkart and help deliver products to customers.

Also, if you are planning to start a delivery business, you should know that the most profitable services come from services like food, groceries, medicines, gifts, and couriers.

2. Delivery Service Business Plan

Any business starts with a plan. Make sure that your delivery business plan incorporates these elements.

  • Start-up Costs

Start-up costs are the expenses involved in founding your small delivery business and form an integral part of your business plan. These costs depend on several factors, including whether you will be handling the daily business operations from home or if you want to run your business out of office space.

Many businesses have become profitable by starting with just INR 1 Lakh. However, if you feel that you will need more, you can always avail of a loan or make investments, whichever works best for you.

  • Other Expenses

Besides the costs incurred for setting up the business, various other expenses keep the daily business operations running smoothly. For instance, if you are operating out of office space, you may need to consider the rent you must pay.

Similarly, it would be best to account for the fuel and packaging charges and business and advertising costs. Then, some expenses go into the maintenance and insurance of your trucks, cars, and cargo.

Likewise, keep in mind that you must pay your employees and dedicate a part of your capital towards these expenses.

  • Target Market

When preparing your business plan, you should also bear in mind your target demographics. Your target market depends on the services you offer. For example, the target audience for a food delivery service is much different from that of, say, a courier service.

  • Rates

You should also assess how much you should be charging your customers for availing of your services and put that in your business plan. Note that these charges may vary depending on the services you offer.

  • Profits

Lastly, your business plan should also indicate the profits you make in a year.

3. Registration

Once you have an idea for a small delivery business and chalked out a business plan to go with it, it is time to get your business registered by completing all the legal formalities. Meeting the registration requirements is one of the first things you should consider when starting a delivery business.

It’s a good idea to work along with a chartered accountant for registering your business as they can help you with the process. Note that while delivering essentials is one of the best business ideas, it also entails lots of paperwork to complete the registration formalities and get the licenses.

You also need to have a structure under which you can register a name for your business. The business structure could be any of the following, including sole proprietorship, limited liability corporation, partnership, or even a corporation.

Delivery Business

4. Taxes

You should also register your business for tax purposes and get a tax identification to pay taxes. However, do note that the tax structure for businesses is different from that of individuals. Once you complete all the formalities for getting a tax ID for your delivery business, you can start filing your returns.

Also, note that different structures have different tax requirements. For instance, the tax requirements of a sole proprietorship business would differ from that of a partnership or LLC.

5. Business Bank Accounts and Credit Cards

It would be better to use a separate bank account for your small delivery business. It can help you in many ways, including protecting both your company and personal assets by separating them and making accounting and tax-filing hassle-free processes.

Also, get a business credit card. It will help you to keep your business and personal expenses separate. It will also help your company build a credit history that can come in handy for investments and raise money.

6. Accounting

You should also ensure that you keep track of your business by recording and analysing the incomes and expenditures. Keeping track of your finances also helps you to file taxes with ease.

7. Licenses and Permits

If you don’t get all the necessary licenses and permits to operate your business, you would be attracting hefty fines from the authorities. There are two main licenses that you must secure for your small delivery business.

  • State and Local Business Licenses

You will need both state and local business licenses to run your small delivery business within your state or city. Getting permits and licenses from both the state and local bodies is as easy as visiting their respective government websites and completing all the necessary formalities.

  • Vehicle Registration Requirements

In addition to licenses from your state and local authoritative bodies, you must also get your delivery vehicle registered with all the necessary permits. Each state has different rules for getting vehicles registered that ply on the roads for delivery purposes. So, be sure to know the vehicle registration requirements of your state.

There may also be different rules for vehicles that deliver items across states. Get to know them, too, if you plan to get things across from one state to the other.

8. Business Insurance

It’s a good idea to get your business covered by a comprehensive insurance plan – one that can financially protect your company in the wake of losses. If you are not sure about this, you can always get General Liability Insurance - the most common financial protection plan for small businesses.

9. Business Website

Although you can use social media platforms like Facebook or LinkedIn, it’s still an excellent idea to have a website. If you are not sure how to build one, you can use various tools, such as GoDaddy’s website builder.

You don’t need to hire a professional website designer who can be expensive. Moreover, you could also be proud that you designed your business website by yourself.

Website designer Creative planning application development draft sketch drawing template layout

Final Thoughts

Delivery service is one of the best new business ideas that you can quickly turn into a profitable small business idea. So, make sure that you get everything right, starting from the niche, the business plan, accounting, obtaining all the licenses and permits, and designing a website and watch your delivery business soar. Also, don’t forget to look up how to start a delivery business and take cues from other such successful delivery businesses.

Also Read:

1) DTDC Franchise Cost
2) Blue Dart Franchise Cost
3) Courier Franchise Business Ideas
4) Best Business In India
5) Business Loan In India

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Q. How to Start an Amazon Delivery Service in India?

Ans. To start an Amazon Delivery Service in India, you can use the ‘Amazon Flex Service.’

Q. What are the Start-Up Costs for a Delivery Service in India?

Ans. The minimum start-up cost for a delivery service is INR 1 Lakhs.

Q. How Much Does a Courier Franchise Make?

Ans. The average business turnover that a courier franchise makes depends on its category. For instance, while a Category A courier franchise makes around INR 1.5 Lakhs a month, a Category B franchise makes INR 75,000 a month. Similarly, a Category C franchise can make around INR 40,000 a month.

Q. How do I Price My Delivery Service?

Ans. The pricing of your delivery service depends on the service that you offer. For example, the pricing of a food delivery service varies widely from that of a courier service.