Everything You Need to Know About Opening Your Own Delivery Company
Whenever you think of a delivery service, what comes to mind? Amazon? FedEx? UPS? These companies are the go-to companies to go to. Despite their popularity and reach, however, not even they can fulfill everyone's order. There's always going to be a need for quick deliveries, which is where you come in. If you're looking for a lucrative business niche, look no further than delivery services. In this post, we'll be covering everything you need to know about opening your own delivery company.
Formulate Your Business Plan
Every business, no matter what its specific niche is, needs a solid plan. This plan will cover every single detail about your delivery company. You should start with drafting your executive summary, which is a shortened version of your entire plan. Once your summary is completed, your next step is to create a company description. This description will go over what your company is in more detail. More specifically, it should display the following:
- Structure you've chosen
- Business model
- Company's mission
- SMART goals
- Team you have behind you
Creating a business plan can take a while to complete, since it can include everything from how to find funding to team building activities for future employees, but since this is the first step, you have plenty of time. Our recommendation is that you don't move on to the next steps until you're 100 percent sure.
Need to Invest in a Fleet
It wouldn't be much of a delivery business without a robust fleet at your disposal. This is where you may run into a bit of a snag as fleets are expensive. Not only do the vehicles themselves cost thousands, but you also need to finance other expenses as well. First, you need to consider what you're going to be delivering. Are you specializing in fast food delivery? Do you plan on delivering products like Amazon and USPS? There's no need for large trucks when providing consumers with food. Those are better off being used to carry loads of packages.
Second, you don't need to buy the most recent vehicle model. Used vehicles can help you save hundreds, though you might be on the fence about them. Unfortunately, used vehicles have somewhat of a notorious reputation. Many believe that used vehicles are a bad investment because they're old and have several problems. However, this isn't exactly true as used vehicles can function just as efficiently as new ones. Of course, you need to have them thoroughly inspected, but that also applies for newer vehicles as well. Regardless of if it's new or used, make sure to compare each of your options to get the best deal possible.
Once you've secured the vehicles, now you can turn your attention to outfitting them with the proper technology. Vehicles that are a part of a fleet are mandated to have equipment, like electronic logging devices, anti-lock brakes and GPS tracking systems. Another important piece of fleet technology is dash cams. Dash cams are small cameras that fit right on the dashboard of your vehicles. They're used to get a first-person perspective of your driver's journey. Dash cams are a great way to provide evidence if an accident occurs as they can provide you with protection during liability and personal injury claims.
Choose a Business Structure
A business structure is one of the most important factors you have to consider before you can officially open up shop. There are four main structures you can choose from: sole proprietorship, partnership, corporation, and limited liability company (LLC). These structures dictate how you earn money, how much you have to pay in taxes, the type of paperwork you need to file, and your ability to handle legal claims. Each option handles these factors differently; sole proprietorships, for example, have owners taking care of everything. You'll be responsible for the tax payments, filing the necessary paperwork, and tackle any legal cases.
Partnerships function the same way except there's multiple people involved instead of just one. Corporations turn a business into a legal entity and is backed by a group of shareholders with the same goal. By becoming a corporation, you'll have protection for personal liability cases. Furthermore, there are various sub-categories of corporations instead of just one. There are S-corps, which is the most chosen option, C-corps, and B-corps. If you decide to go with a corporation, make sure to research more into the different types.
Finally, we have the limited liability company; this is what you want to deeply consider as it’s the most beginner-friendly option. It's a three-in-one package; you have complete ownership like a sole proprietorship, anyone can be a part of it like a partnership and you have the protection of a corporation. Despite being highly recommended, the choice of which structure works best is up to you.
