Due to the increasing demand from customers for instant doorstep delivery, the market for delivery services is experiencing a boom in order volume. Thanks to digitalization, technology is now more accessible to consumers, and their lives have become simpler.
In the near future, the market will continue to show an upward trend. Effective strategies are essential for any successful delivery business, whether it operates online or offline. Thus, this blog will undoubtedly help you if you’re thinking “how to start a delivery service business.”
The Delivery Business: What is It?
Basically, a delivery company delivers orders to a customer’s address that include meals, clothes, medical supplies, alcohol, and beverages in addition to necessary items. Typically, distribution centers receive the goods after they are shipped from the warehouse, and last-mile logistics handles the delivery.
Customers can choose between regular, next-day, and same-day delivery based on the type of order and the delivery fees. With the shopping period for the holidays quickly approaching, retailers will be working hard to win over customers by offering quicker deliveries.
How to Launch a Delivery Company?
When you launch your own delivery company, you need to be aware of every element that supports your start-up. Prioritize marketing your company, developing loyal customers, setting up a competitive price structure, and identifying your specialty.
The following action plans and strategies will assist you in launching your very own delivery service:
Step 1: Identify your specialty
Step 2: Create a delivery business plan.
Step 3: Create a procedure for delivery
Step 4: Establish your delivery service company as a legitimate organization
Step 5: File tax, license, and permit registrations
Step 6: Get a business credit card and bank account.
Step 7: Configure accounting for businesses
Step 8: Obtain policies for business insurance
Step 9: Obtain insurance for delivery services
Step 10: Assemble the required hardware and software.
Step 11: Employ and educate drivers
Step 12: Use effective branding to market your company
Step 13: To maximize last-mile delivery, use route planning software.
Let us explore these steps in detail.
Identify Your Specialty
Selecting the industry type you want to work in is the first step towards launching a delivery business.
Your setup and other associated costs will be significantly impacted by the sector you select. Almost all businesses use similar procedures and methods when delivering packages. Let’s start by examining the two common delivery formats:
Nearby delivery assistance
Delivering products or merchandise for surrounding businesses is the focus of local delivery services. You can operate a cargo truck business if your objective is to deliver goods within a certain delivery route that includes a few area codes. Moreover, you can collaborate with contractual drivers who can drive their own cars.
Worldwide delivery assistance
This kind of courier service is available worldwide and can transport goods between continents. You can collaborate with companies like FedEx, DHL, or others to deliver goods that are ordered or sent by means of these businesses.
Truck routing software, CDL-licensed drivers, and truck storage space are requirements if you want to use long-haul vehicles on your own.
Examples of unique delivery businesses
Here are three distinct delivery company examples that you may think about using to help your clients and reduce their problems:
1. Food delivery: Businesses can collaborate with nearby restaurants and cooks to provide clients with meals. Putting more of a focus on your local area will improve the customer experience more than preferring big platforms.
2. Delivery during the night: If your business specializes in fulfilling orders after hours, you are only required to deliver goods between the hours of 6 and 8 p.m. or later. This will allow you enough time to dedicate to giving each order the extra care and focus it deserves.
3. Pharmacy delivery: By providing your delivery services to nearby pharmacists, you can help them overcome their last-mile delivery obstacles. This will greatly reduce their stress levels and increase your client base.
Create a Delivery Business Plan
Any business that has a stated goal in its business plan is considered successful. Creating a plan allows you to monitor your company’s progress and make adjustments to boost sales. You should take the following factors into account when creating your business plan structure:
- Monitor your spending
- Determine your market and rivals.
- Use marketing techniques and establish your company’s objectives.
- Establish a price schedule based on your delivery service.
- Business Prepare ahead of time for obstacles and day-to-day tasks.
- Employ personnel and delivery drivers
- Give your staff the training they require.
Create a Procedure for Delivery
Putting together a route plan, packing the driver’s car with goods, and getting them to the customer’s door are all part of the delivery process. To make sure deliveries go smoothly and customers are happy, here is the standard breakdown of the delivery process:
Making routes better
Businesses that are just starting out often have to plan their routes by hand, which takes a lot of time. It’s also hard on delivery drivers, even if they only have to make 20 stops.
When modern technology is used to find the best route, it immediately helps. As the number of deliveries slowly increases, a good route can help drivers stay calm and arrive on time.
Watching the routes
Things can go wrong if you don’t have proper monitoring. As an example:
- You’ll have to contact the drivers and guess which one is available if you have to reroute because of a canceled order or an extra customer order.
- If a customer wants to know when the driver thinks they will arrive, you or the customer will have to call him or her, which will take even longer.
- With route monitoring, you can see where your drivers are on their delivery route, so you and the client can be sure of the status of the delivery.
Getting last-mile delivery done
Your driver finishes their job by safely delivering the package, which is the last step in the delivery process. People who place orders with you expect you to deliver the goods in a way that doesn’t damage them.
Use a route optimization solution to plan your last-mile deliveries and make sure your drivers meet their deadlines. You can deliver more packages in a day this way. Also, start keeping track of each order with proof of electronic delivery.
Establish Your Delivery Service Company as a Legitimate Organization
Another important thing you need to do is register as a legal business. Choose a name for your business and make a logo before you sign up.
After that, you can choose to establish your delivery business as an LLC, a corporation, or a partnership, depending on your needs. Talking to a lawyer can assist you in setting up the company entity so that you fully understand the rules and regulations.
File Tax, License, and Permit Registrations
Before you start your delivery service, you may also need certain state licenses and permits. Getting these can help your business avoid fines and other bad things.
You might also have to charge sales tax for the things you do. Make sure you follow any rules or laws in your area about getting licenses. You can learn more about it by:
- Talk to the clerk’s office in your county.
- Find a local business group and ask for help.
Get a Business Credit Card and Bank Account
The next thing you need to do is open a business bank account for the delivery company. It helps you keep your company and personal finances separate and keeps your assets safe. It also makes accounting and filing taxes easier.
- You can open a business account once you have your LLC or Corporation files.
- Talk to the bank near you and learn more about banking.
- Find the credit card service that works best for your delivery business.
- A business credit card would also be helpful because it keeps your personal and business costs separate by keeping track of your business costs separately.
- It builds credit for your delivery company in case you need to borrow money for your business in the future.
Configure Accounting for Businesses
It is important for the law that you keep track of all your income and expenses. Having accurate and detailed records also makes it easier to file your taxes every year.
Buying accounting software will help you a lot with keeping track of business costs and other accounting tasks. There are many types of software you can use, but Quickbooks Online is one of the most affordable, easy-to-use, and effective options.
Obtain Policies for Business Insurance
In the same way that you need licenses and permits, you will need insurance for the delivery service you run to stay safe and follow the law. Business insurance keeps your company’s money safe in case of losses.
There are many types of insurance for different types of businesses, but General Liability Insurance is a good place to start. Small businesses often have this kind of insurance.
Insurance for workers’ compensation is another one. It will help you pay some of your workers’ wages.
Obtain Insurance for Delivery Services
If you run a delivery service, you might need commercial auto insurance. In the event of an accident or other liability involving your delivery vehicles, this will protect you.
Getting the right insurance for package delivery is a good idea. If you don’t, you might have to pay the customer back if their package gets damaged during delivery.
Besides that, you might want to talk to a professional advisor about what other kinds of coverage you might need. Make sure that the right policies are in place to cover your delivery business so that it runs smoothly.
Assemble the Required Hardware and Software
To keep your business running smoothly and get packages to customers faster, you need the right tools. Based on your needs, here are some of them that you can buy:
- Delivery vehicles: Most of the time, companies buy cars or trucks to do their deliveries.
- Ratchet straps: These are for your staff to use to secure heavy packages while they’re being moved.
- GPS systems: GPS systems help track your location better and make the drop-off service process go more smoothly.
- Fleet management software: This software lets you keep track of the cars that your company owns. It gives you information about your location, car diagnostics, and more.
- CRM software: CRM software helps you keep track of customer information, spot sales opportunities, run marketing campaigns, and make notes on customer service problems.
Employ and Educate Drivers
- Plan out the driver’s duties, roles, and most important tasks.
- Make plans for their shifts.
- Based on your rules, give full-time or part-time jobs.
- Know things like having a valid driver’s license and a history of good driving.
- Find out how much experience they have driving the kind of cars you want to give them.
- Find out how well they know the delivery areas.
- Describe the pay structures, incentives, and any other relevant information.
You might also need to teach the ones you already have about company rules and how to do their jobs well. You can teach them how to handle orders, use maps correctly, deliver packages using the best routes, and get proof of delivery.
Use Effective Branding to Market Your Company
Start by getting up with a good name for your business, some trendy fonts and color schemes, and a logo that stands out. Think outside the box to make your business stand out from the rest and leave a lasting impression.
Another way to get people to know about your business is to market your delivery service. You do need clients to buy your goods or services, right?
- You can use search engine optimization (SEO) on the website to run campaigns on social media to get leads.
- You can get customer information, like email addresses, phone numbers, etc., and then send them marketing emails or text message alerts about your products or services.
- You can make your business stand apart from the rest and get more people to visit your website very easily by hiring a marketing agency.
Use Route Planning Software to Maximize Last-Mile Delivery
A route scheduling program can help you organize and plan your delivery routes so that they meet your needs and the needs of your drivers. In the last-mile delivery, it assists you in finding the best routes based on things like traffic and weather.
That’s why, if you’re ready to make your first package delivery but can’t figure out how to get there, we can help.
Explore NextBillion.ai’s Route Optimization API. We can help you find the most cost-effective delivery routes or assign stops to multiple drivers.