6 Steps on How to Start a Courier Business

Investment, Planning, and More

Here are six essential steps to get you started!

1. Settle on a Niche and Scale

It is helpful to identify and settle on a niche for your courier business. Offering specialised or niche services like same day deliveries, hyper-local or intra-city deliveries, or delivery of goods that require specialised handling can help you stand out in an otherwise crowded market.

It is advisable as a small business to start small and focus on local deliveries that you can fulfil by yourself or with a small team of delivery persons. A second option is to take a franchise from a larger, well-established courier company. This way, you will have the resources, network, and reputation of a larger, better-established company behind you. You will be able to start on a larger scale while minimising your exposure and risk.

Tie ups with e-commerce companies like Amazon and Flipkart to deliver their parcels in your area can also prove profitable and allow you a convenient entry point.

2. Market Research and Pre-Planning

Market research is the first step towards an entrepreneurial venture. You must research existing courier service businesses active in your area and find out how and where they operate. Existing companies often have business relationships, contracts and agreements with various big and small local businesses. Suppose the network of these existing courier businesses is strong and well established. In that case, you will have to either offer competitive pricing and service or identify gaps in the current market where you may move in.

You may need to employ a lawyer to look after the legal requirements and formalities of registering your business and obtaining relevant licenses.

Research, understand and plan for the logistics of how to start a courier business. You will have to look for and approach various third party vendors and service providers like transport operators, warehousing and storage facilities, employment agencies to recruit workers, among other things, to set up your infrastructure.

Accounting and transaction management is imperative to a courier business and often require a good deal of labour and expense. However, this can be minimised by using apps and services like OkCredit that are optimised for efficient management of bookkeeping requirements for small businesses.

With these early steps taken, your groundwork for starting your courier service will be completed.

3. Initial Investment

The initial investment will include the cost of registering your company, hiring workers, renting or buying vehicles for transport, renting storage facilities, among other things. Insurance for your cargo, vehicles and storage facilities is essential since you will be handling a lot of goods and packages.

It is best to be frugal initially and not invest too much at once to avoid excessive exposure. Keep your office at home instead of renting out space. Hire only a small team of workers.

You will need to secure a bank loan or may even have to look for investment from venture capital to start your own business from scratch.

You may be wondering: 'But, how much does it cost to start a courier business?' Well, there isn't an easy answer. The amount of investment required will depend, among other things, on the scale of your courier business, the location in which you're operating and whether you choose to take a franchisee to save costs or start an independent courier business on your own.

4. Marketing Your Courier Business

Marketing your business is essential, especially since a courier company is a service business and depends entirely on creating customer demand.

Traditional advertising like print ads, billboards, radio and television commercials are effective. However, today it is beneficial to take advantage of technology and digital media to market your services. Viral marketing strategies on social media can create a lot of buzz and are relatively low-cost ways of advertising your presence. Email marketing, social media marketing and creating and publishing SEO content for your business can help you grow organically and inexpensively through the internet and digital media.

5. Managing Your Courier Business

So you know how to start a courier business. But it doesn't end there! Learning how to manage your business is extremely important.

In the digital age, a website is important as it enables customers to easily search and find out about your courier service and what it offers, track their deliveries and boost consumer trust. Customer support is vital in the service industry, and it is essential to take steps to ensure a smooth experience for the consumer. A dedicated customer care helpline alongside your website will prove invaluable.

The accounts management is also an important part of managing a business as dynamic as a courier service. You could employ an accountant to do your bookkeeping the traditional way. However, in today's fast paced digital era, apps like OkCredit make it all too easy to do your bookkeeping entirely online and keep an easy and secure track of your debit and credit records by digitising your ledgers.

Keeping up with technology and using websites and apps will enable you to keep up with millennial consumers' demands who are used to quick service and instant gratification.

6. Recruiting and Managing Staff

A courier service is a labour-intensive business. Employment agencies can help you hire some workers; you can also place ads in local newspapers and use word of mouth to find and hire staff.

It is advisable to hire a small team at first to minimise your costs and management needs. You will still need to hire some dedicated delivery persons and drivers, customer service executives, and security guards to look after your cargo while it is being stored. Depending on the skill level and nature of the role of your various employees, you may pay them on an hourly, weekly or monthly basis.

You will have to maintain records and ledgers of salary slips, attendance, leaves/absences for your employees. These tasks can also be handled digitally nowadays through apps like OkStaff that efficiently handle your staffing needs.

Also Read:

1) Which services are the most in-demand that small businesses can take advantage of?
2) How to Open a Small Pet Shop?
3) How to Get A First-time Business Loan: The Ultimate Guide
4) OkCredit: Simple, Paperless & Secure solution for businesses

FAQs

Q. What is a Courier Service Business?

Ans. A Courier Service Business is a company that delivers letters, documents, packages, consignments et cetera from one location to another for a fee. Unlike a Postal Service, Courier Businesses are privately owned.

Q. What are the legal formalities, registrations and licenses required for opening a Courier Business in India?

Ans. You will need to register your company with the Ministry of Corporate Affairs and obtain a DIN number and a digital signature certificate and apply for a PAN number and GST registration. You will also have to apply for registration for Service tax. Besides, if you are looking to secure a unique brand name, you will also have to apply for trademark registration.

Q. What is the potential of the Courier Services Market in India?

Ans. According to CARE Ratings, Courier Services Market in India is projected to be worth over USD 215 Billion by 2020-21 and has grown by around 10% since 2016-17. With the rise of the e-commerce industry, the Courier Industry is also expected to see huge growth.

Q. What are the different types of Courier Services?

Ans. The different categories of Courier services are:

• Standard Courier Delivery Services: These are the most basic courier services and deliver small to medium sized packages nationally.
• Overnight Courier Services: These courier services offer urgent, overnight delivery of packages, usually locally or between big cities where good transportation facilities are available
• International Courier Services: These types of courier services specialise in shipping packages overseas and are hence equipped to deal with international shipping and customs
• Pallet Courier Services: These are mainly used by businesses to deliver goods on wooden pallets. They are used for heavy loads.

Q. Who are the major players in the Courier Industry in India?

Ans. Apart from the government owned India Post, Blue Dart, Ekart Logistics, Gati Ltd, DTDC, DHL and FedEx are some of the major players in the Courier Industry.