Are you looking for business opportunities? Local parcel delivery has good growth potential, more so now with the increase in online and mobile sales. With that in mind, since Hispanic Entrepreneurs we offer you a guide so you know how to start a delivery service.
Is a delivery service profitable?
Yes it is, and it is projected as one of the most requested businesses in the future. The main reason is the increase in online shopping and the need to deliver products directly to customers' doorsteps.
The consumer does not need to leave home to make their purchases and local delivery services they take care of delivering the packages, usually the same day. These businesses specialize in deliveries in nearby locations.
The business can start with just the owner and, as it grows, include new delivery people. They can also start within a city, then expand to other regions. There are delivery services with a presence in several states.
This type of business generates profits for the deliveries made. Charges can be based on distance traveled or per hour, the latter being more prevalent when it takes longer than normal. In addition, the company can add additional fees, for the size of the packages, for example.
How to start a delivery service
Like any other business, your delivery service should start with an initial plan in which you describe what you are going to do, how you will do it, the resources you have and how you will get financing.
In Hispanos Emprendedores we have already detailed the Steps to Starting a Business in Tennessee. Review them so you can shape your new project.
Within the business plan you must specify the niche in which you will work. In general, delivery services can transport any type of packages, which places them before a wide range of customers.
Or, if they prefer, they can specialize in one type of delivery. For example, food and beverages, medicines, gifts, among others.
Consider upfront costs
If you wonder what is the initial cost of a delivery company, we give you the answer. Most include the purchase of a suitable vehicle for transportation and commercial auto insurance. In addition, you will also need insurance for the packages.
As for the vehicle, you can start with the staff as long as you earn enough to buy one. But you should not ignore the insurance, because if something happens to the packages, all the responsibility will be yours.
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Included in the initial costs are others such as licensing fees, equipment and marketing. These are minor compared to the previous ones.
On the other hand, fuel is a fixed operating expense and one of the largest that the company will have.
Licenses and permits
To operate a vehicle it is clear that you need a valid driver's license, as well as the employees you are going to hire.
But, in addition, you must process the licenses of your business before starting it up.
Delivery services in Tennessee are allowed to deliver alcoholic beverages, but require a license to do so. The requirements and restrictions to acquire it are specified in the Alcoholic Beverages Commission.
Delivery service employee permission is also required. To acquire it, the applicant must be over 21 years of age, requires a criminal background check and not have any conviction for a serious crime involving moral turpitude within 10 years.
Check with the Secretary of State and the county which licenses you must obtain to open a delivery service business.
Another legal requirement is to register the vehicles that are part of the company if they are to go from one state to another.
Take care of logistics
One of the lessons that the coronavirus crisis leaves has to do with the logistics of delivery services.
Online shopping increased much more than expected worldwide due to the lockdown. What happened then was not all companies had the ability to respond to deliveries and customer service was not what was expected.
Keep this in mind when opening your business. Lean on technology to serve all customers as they deserve. This will help you organize routes and avoid delays in deliveries. When you handle a few daily orders you will not have major problems, but as they increase, more problems come.
Create an app for your business
Having an app for your delivery service can increase your profitability since it will allow you to attend more orders than through phone calls. It is also a way to facilitate the processes for your customers and improve their experience with the service you offer.
With this information you already know the basic steps on how to start a delivery service. Are you determined to start your business and are you looking for advice? Contact us.
