How to Start a Delivery Service: Everything You Need to Know
If you want to know how to start a delivery service, you'll need to know what is required for this type of business. 3 min read
2. Establish a Niche
3. Register a Business
4. Acquire Delivery Vehicles and Other Equipment
Updated July 8, 2020:
Starting a Business Delivery Service
If you want to know how to start a delivery service, you'll need to know what is required for this type of business. Many niche markets have a need for reliable delivery services, which is where a small delivery service business can achieve success. One big part of the business is the transportation of cargo. Large and small businesses alike need to transport inventory, so they need reliable service. If your delivery service is non-CDL, you won't need a commercial driver's license to drive trucks and other large vehicles.
If you want to launch a low-cost startup that can get off the ground quickly, a small delivery service could be a great option. A small delivery or courier service is a way to start a small business that doesn't require a lot of startup fees.
Benefits of this type of business include:
- Access to many potential customers
- Minimal equipment costs
- No requirements for experience or education
A courier is responsible for picking up and delivering all types of packages and items, as well as pets for individuals and businesses. Even in a smaller town, a courier service is necessary since all types of businesses and people will need a document or package delivered right away. A large delivery service like FedEx or UPS can't offer the same level of service available from a smaller, local, independent courier.
Anyone who is thinking about a “shoestring startup” could find success when starting a small courier service. It doesn't require formal education, training, or a significant investment, but it does require good communication skills. Another benefit of a courier service is the option to operate it out of your home, which means you won't have to spend extra money on utility or rent costs.
Establish a Niche
When you select a niche for your delivery service, it's easier to build a reputation, focus your marketing efforts, and encourage referrals. The first step is selecting a name for your delivery business. Before you can register your business name, you will need to visit the website for the Secretary of the State and search for similar names. If you see anything too similar, you'll need to change your business name to prevent it from being rejected. The name of any small business is critical; choose something unique and creative that people can remember.
Register a Business
When you've selected a name for your business, the next step is filling out the business registration form online and paying the filing fee. The fee to register a business will vary between states, although it's typically between $100 and $800. After you register your business in your state, visit the IRS website to apply for a tax ID number. You will need this number to finance any vehicles, register for state permits and other requirements, and set up bank accounts for the business.
It is best to set up a delivery service company as a limited liability company (LLC) or sole proprietorship. You should also check with the local revenue commissioner's office or county clerk to find out what the requirements are for getting a business license.
Acquire Delivery Vehicles and Other Equipment
As you think about the deliveries your business will handle, you'll need to select a vehicle that maximizes cargo space. If you're moving cargo like medical tests, paperwork, or other small items, a transit or cargo van will work well. For larger deliveries, such as furniture, a box truck is a better option. Obtain financing for the van or truck through a local bank or automotive dealership. The cost for a van or truck can range between $18,000 and $50,000. The vehicles on the higher end typically include useful extras like automated lifts.
When you start a delivery service, you may need additional items, such as padding, dollies, and straps to secure the cargo. These items may not be available through financing with the vehicle you select, but make sure to plan to buy the necessary items as part of the initial investment. If your delivery service will only handle small packages, a compact car or SUV could offer enough space.
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