Today’s world is built around convenience culture and immediate gratification!
We’re a microwave generation, and all that jazz, right?
Because of this, the courier business and independent delivery driver business remains a viable industry.
Despite dominating and monopolizing players such as Amazon or UPS, there is still room for the little guy when it comes to on demand delivery services in niche areas.
So if you’ve got a van, and some free time on your hands…
A courier business might just be the right side hustle for you!
I'm Ippei, a master of all things online business, passive income, and local lead generation...
And before you get started, you need to understand the reality of this business.
Which is why I’ve taken the time to create this 7 step guide for starting a courier business in 2021…
And also added sections devoted to realistic startup costs and the true pros and cons of the delivery business.
So let’s get right into it.
How to Start Courier Business in 2021
Want to Start a Courier Business in 2021? Here's What You Should Know:
If you’re considering starting a courier business in 2021, there are some things to consider first. To get started, you will need to establish a legal business entity, have a reliable delivery vehicle, and learn how to find courier contracts. Plus, you should evaluate the pros and cons of this business.
Start Up Costs
While this list is not a comprehensive compilation of every you need to start a courier business, it provides a snapshot of what you need to add into your business plan.
Totals:
Bicycle Courier: $100 - $500+
Motorcycle Courier: $1,500 - $10,000+
Van/Truck Courier: $10,000 - $50,000+
Annual Salary of Established Courier Business
According to this article from Zip Recruiter,
https://www.ziprecruiter.com/Salaries/Independent-Contractor-Courier-Salary, the average annual revenue of this kind of business is: $47,048/yr
And the average hourly rate is: $36/hr
Profit Margins of Established Courier Business
And the average Profit margin of this kind of business is: 30-36%
7 Step Quick Start Checklist:
1. Get Legal
Before you can hop in your cargo van and try to steal some of Jeff Besos’ business, you have to lay the legal groundwork for your new courier enterprise!
Fortunately, the requirements for establishing your own independent delivery service are pretty minimal.
But the standard requirements of establishing a legal entity and registering your business still apply.
The best way to go is to form an LLC as your business entity structure, so that you won’t be held personally liable for any legal issues that might result from your business endeavors.
From there, you can apply for your EIN number.
Which is basically your business’s own social security number, as well as being a tax ID number that will be required for filing your end of year business taxes.
Applying for your EIN is completely free, and you can get this step knocked out today through the IRS’s website!
Then you can move forward to opening a business bank account so that you don’t make the fatal mistake of mixing your personal and business finances together…
Ten out of ten would recommend never criss crossing these two!
Although many courier contracts will not care about your EIN number or bank account, and will have no set requirements for your LLC status…
For your own legal protection you should still take these steps!
It’s not worth the risk that comes with giving out your personal bank info and social security number to courier business contractors.
In addition to these basic steps to setting up your business, it will be important to consider the standard requirements for delivery drivers.
They are as follows:
Standard Deliver Driver Requirements:
Having business auto insurance, as well as courier insurance for your business is extremely important!
Too many people neglect this step, but when you find yourself in an accident in a company vehicle…
Or when your package ends up damaged or undelivered for some unpreventable reason…
You’re going to thank your lucky stars that you bit the bullet and invested in the proper insurance coverage from the beginning!
2. Determine Your Niche Market
An important factor in making a courier business successful is to find the right niche!
There are a variety of different independent delivery jobs available now.
Some of them will work better for your personal goals and lifestyle than others…
So it is a matter of evaluating what is available and then choosing the delivery niches that work the best for you.
Here is a list of popular delivery service jobs that are widely available in most areas.
Avenues for Transport Jobs You Can Start Today:
One of the most profitable options on this list is the medical courier niche.
Medical Couriers are responsible for transporting medical items from labs, hospitals and clinics.
You will be in charge of picking up and delivering these items, and potentially even be responsible for invoicing.
You can make a good amount of money as a medical courier.
It’s typically around $2 per hour.
But you will probably need to know medical terminology, and abide by HIPAA laws that protect patient privacy and personal information.
As well as being comfortable transporting bio-hazardous substances like blood or even body parts in your vehicle.
3. Same Day VS Multi-Drop
When you start out in the independent courier business, you will notice that there are two primary categories for delivery jobs.
There are significant pros and cons to each delivery model…
So let’s break down some of the key differences of both, as well as the pros and cons to each:
Same day deliveries are great because they are priced per job.
So you can potentially make a lot of money bidding per deliver versus having a daily rate.
There's no cap on what you can make per day.
So long as you have enough jobs, you can continue to increase your profit!
The downside to working on same day jobs is that you will spend a lot on gas.
Now this might sound like a given, but with same day deliveries, there is no guarantee that you will have a logical route from one delivery to the next.
So your gas costs can be astronomical if you don’t schedule things out efficiently.
Which is sometimes impossible if you have deliveries that are simply on the opposite side of the city from one another.
There is also the added factor of working extremely long days and often during strange hours.
Generally speaking, multi-drop deliveries will all be through the same contractor/client/business.
So the chances of being able to map out a logical route for your deliveries will be much more practical and attainable than same day delivery.
Unfortunately, the downside to this is that you will most likely be paid hourly or by a day rate. So your potential income for multi-drop jobs is typically much lower than individual same-day jobs.
That being said however, the greater consistency of multi-drop jobs can often outweigh the cons of this model.
Plus, the hours are usually normal nine-to-five business hours.
Another upside to working multi-drop delivery routes is that it keeps you active.
Sitting in your van for long hours for individual same-day deliveries can be extremely sedentary and exhausting in its own way.
If you are someone who easily gets bored, the fast paced nature of multi-drops may be much more appealing to you than long road trips for same day jobs!
Plus it keeps you much more fit and active.
Ultimately, the biggest con of the multi drop model is the income cap.
But in addition to this, there is also the consideration of the companies and contractors you will work for.
Some of them will be great, but some of them will be awful.
You will have to figure out which companies you actually enjoy working for, and which ones aren’t worth the money.
Lastly, consider the area that you are currently in.
For Example:
Multi-drop deliveries can be very efficient and affordable if you live in a city or urban area. But if you live further out in a more rural or remote area, although there will be a demand for your services… Your routes won’t be as efficient and your expenses will be greater.
The best way to maximize your profit as an independent courier is to combine the multi-drop and same-day delivery models.
Taking on both types of jobs will create the highest potential for profit.
Especially since flexibility is so crucial for this business model. If you have the opportunity to take a job…
Take it!
Whether it’s the type of job you’re trying to focus on or not.
There’s no use sitting around and waiting for a more ideal job to pop up.
And besides…
If you pass up a job, the chances of you getting another call from that company in the future are slim to none!
Which is another reason why flexibility is a huge factor in being able to build a successful courier business.
4. Start with Where You’re At
Here’s the thing, starting a courier business isn’t going to make you wealthy.
And it certainly won’t be a get-rich-quick scheme!
(Those don’t exist btw… Anyone who says otherwise is definitely trying to scam you! If you’re interested in a long term strategy for wealth, stick around to the end and we’ll talk numbers.)
The biggest thing that starting a courier business has going for it is that you can start from where you’re at!
So many people search for how to start a business with no money…
And ultimately I don’t think that’s possible.
Every great business endeavor requires some measure of initial investment.
But starting a courier business is probably as close as you’re going to get to starting a business with zero money!
Why?
Because the most important startup requirements are things you probably already own:
At the end of the day, these are the only two things that you absolutely have to have to start out with independent deliveries.
You can build on this over time, but nothing else will be absolutely mandatory.
In fact, you don’t even have to have a large vehicle!
If you really are serious about the independent delivery driver business model, then you can always start out delivering for Instacart in your little Prius!
The important thing is that you actually start.
Where you go from there is completely up to you, but sitting on your butt and overthinking things won’t land you anywhere different a year from now.
So don’t think you have to make some crazy amount of financial investment or take on massive credit card debt to make a courier business happen.
Just take it one step at a time and start from where you’re at.
5. Delivery Vehicle and Equipment
Once you’ve built up some cash flow and gotten some traction going for your courier business…
Then you can consider upgrading your equipment and delivery vehicle.
I think most couriers would agree that a sprinter van is the ideal delivery vehicle, but this can be a huge investment.
Please don’t feel rushed or pressured to make an upgrade of this size until you feel fully confident that your courier business is capable of becoming something more than just a side hustle.
The last thing you need is to make a huge purchase for a business that you end up hating, or one that doesn’t turn a profit.
That being said, here are some great options for delivery vehicle upgrades:
Vehicle Upgrade Options:
All of these options will work well, but even beyond the size of your new delivery vehicle, consider things like:
These three factors will play a huge role in the long term investment that you are making.
If you purchase a used minivan that is already over ten years old and has upwards of 100,000 miles on it…
Then prepare to spend money in the near future on significant maintenance and repairs.
Even if a vehicle is a good price, determine whether purchasing used is worth the trade-off of more frequent repair expenses and worse gas mileage than a newer vehicle.
These things will affect the bottom line of your profit massively.
In addition to upgrading your delivery vehicle, there are several other pieces of equipment that you can invest in to help run your business more smoothly and efficiently.
Equipment List:
One of my top recommendations on this list is to invest in the hand truck!
Without a hand cart, you might find yourself in an unexpected bind.
Although it probably won’t be your most used piece of equipment, it’s absolutely worth investing in.
If you run into a situation where you are forced to park down the street and around the corner from your place of delivery…
But you have a stack of 5-10 heavy boxes that you have to drop off…
This job could take several hours without a hand cart.
But with a hand cart, you will be able to stack the boxes and get the delivery knocked out in no time!
So even if you don’t reach for your hand cart very regularly, I guarantee that it will be a lifesaver when you do!
6. Get Organized
At first glance, running a courier business might seem relatively simple.
All you have to do is pick up a package and deliver it to the correct address, right?
Badda-bing, badda-boom! Done.
Wrong.
Starting a profitable courier business will require the same level of business skills and organization as most other small businesses.
Your level of organization on the back end of your business will greatly affect whether or not starting an independent delivery business is even worth your time and energy.
First and foremost, be prepared to purchase bookkeeping and accounting software for your courier business!
Most likely, you will not need to hire an official bookkeeper or accountant (at least not until tax season)...
You will need to learn the basics of bookkeeping for yourself.
Here are three great bookkeeping softwares for small businesses:
Most of the bookkeeping expenses and bank account balancing that will be required for your business will be related to your vehicle.
This can include:
All of these factors are business expenses that you will need to account for in pricing your services…
As well as for writing off business expenses for your end of year taxes.
Which is why keeping up with your receipts and tracking your vehicle mileage will be absolutely mandatory!
On top of the bookkeeping side of your business, you will need to become skilled at mapping out efficient delivery routes…
And you should probably get a planner.
You can go old school and use a physical notebook style planner, or you can use an app on your phone.
Just find out which one works best for you, and use it consistently to keep track of the different jobs and routes that you have coming up during your week/month.
7. Marketing and Getting Courier Contracts
If you are truly committed to starting a courier business in 2021, then you’re probably wondering how in the heck you are supposed to actually get contracts and market your services.
Well, there are a variety of different methods.
One of the easiest ways is to work as a third party delivery driver.
Which means that you are contracted out by a company that has already sourced the delivery routes for you!
They just need drivers.
So you will essentially be subcontracted out to deliver the jobs that they have already obtained.
If this goes well for you, then you can consider branching out independently and sourcing jobs on your own.
Once you are ready to take that next step, I highly recommend getting comfy with Craigslist.
Despite its somewhat sketchy reputation, Craigslist is one of the best ways to find potential courier jobs.
However, speed is key.
Oftentimes the only thing you have over another more experienced courier is how quickly you respond to a posted route on craigslist.
When you do reach out in response to a posted craigslist delivery route, be sure to ask plenty of questions!
At a minimum, make sure you have the answers to these questions before committing to a contract.
Questions to Ask Before Accepting a Route:
Never take a job without having these questions answered first, or you might end up getting scammed.
Or even just losing money on a job that wasn’t worth your time, or was extremely far out of your way for very little pay!
If you land a job that requires a delivery vehicle model or year that you don’t already have…
You can always upgrade your vehicle as necessary to meet their requirements if the job is a good long term fit.
Just make sure that you are confident that the contract is worth the cost of the upgrade before you commit!
In addition to scouring Craigslist ads, you should get a Google My Business page!
These are completely free to set up, and they will boost your company’s visibility within Google immensely!
The easier your services can be found locally within Google, the better!
Just set up your GMB account, and wait for your passcode postcard to arrive in the mail and you’ll be all set.
And if you're ready to take your marketing game a step further than just a GMB page, take a look at our lead generation coaching program here!
You should also have business cards handy wherever you go…
Because you just never know when they’ll come in handy!
Pros and Cons
of starting a courier business
Pros
If you already have a full time job, or another business you’re running, but still want to pursue some additional income… A courier business can be a great solution. It doesn’t typically produce enough income for full time employment, but it can supplement an additional job nicely.
One reason that a courier business makes such a good side hustle is that you have the power to set your own schedule. You do have to have a certain level of flexibility, as you will stop getting calls if you turn down delivery opportunities repeatedly… But you still have control over your time for the most part.
Because of the consumerism based society that we live in, your job as a courier is virtually recession proof. Regardless of how things in the economy are going… deliveries will still be happening!
Another major benefit to starting this business as a side hustle is that the startup costs are relatively low. Especially if you already have a decent sized vehicle. It doesn’t even have to be a truck or a van! You can start with what you have, and upgrade if things go well.
Cons
Private courier gigs are often at strange hours, and will require you to drive through the night. And if the delivery is far away, you could be on the road for hours. So if your work schedule doesn’t have this type of flexibility, you will have to be more particular with which jobs you take on.
Your income as a courier will be directly linked to how many hours you spend driving. So this isn’t exactly the side hustle for those looking to make passive income while they’re sleeping.
Most couriers aren’t doing this as a full time job, because the annual salary is pretty small. If you choose to go this route, you will need to supplement your income with another job to make ends meet for most areas.
You might be swamped one month, and not have a single call for weeks the next. The unpredictability of this business model can be frustrating… especially if you're running this side hustle because you really need the money. But it’s the nature of the game.
Starting a Courier Business Can Work, but Lead Gen is Better. Here’s Why:
For some people, the thought of hopping in a van and hitting the day's delivery route with a podcast playing...
Sounds like heaven.
But if you're serious about starting your own business, and the long hours and unpredictable life of an independent courier sounds like less than your dream job...
Then there are much better options out there for you!
I promise.
How can I say this?
Well, I too was itching to ditch my day job that had me barely paying bills at 2K per month.
When I discovered the online business model of local lead generation...
I never looked back.
Local lead generation not only generates over 50K per month for me after only 5 years, but it's also become a completely passive revenue stream!
Plus, I get to take the stress off of so many small businesses by taking care of the one thing they need most:
More leads!
The good news?
Local Lead Gen is a business model that anyone can learn.
Take a look at how we can help you get started with online lead generation, right here!
