Delivery of food or other items is a huge business venture in the United States. According to PR Newswire, the Courier and Local Delivery market in the US is projected to grow by $23.18 million between 2021 and 2025.
As an entrepreneur, you stand a chance of making lots of profits from the 2.50% Year-to-Year (YoY) growth rate in the industry. But the major move is in understanding how to set up your delivery business in the United States.
Here are some questions people are searching for online when it comes to building a reputable courier business:
- How to start your own delivery business?
- How to start your own delivery business with amazon?
- How to start a home logistics business?
- How to start a pickup and delivery service
- Checklist for a pickup and delivery business
- How to start a delivery business with contract drivers?
- How to write an effective home delivery business plan
- Is a delivery business profitable?
In this article, you will find out just what you need to do to get started. We also offer tips to help you maximize the opportunities in the market.
6-Step Formula to Starting Your Delivery Business in the US
Table of Contents
Here are the six (6) major steps you need to have in mind when starting a new delivery business in the States.
1. Plan Ahead of Time
The good old statement readily comes to mind: “if you fail to plan, you plan to fail.” Thus, your first step is to plan your delivery business before setting about the task of starting it.
Here are creative ways to do the planning:
Define Your Market
From the report at the beginning of this article, the food delivery business is booming in the United States. As much as you are looking to make profits, also understand that the location matters.
You can define your market for delivery business using these parameters:
- The population (number of persons) that would be interested in using your delivery business.
- The number of businesses that would be open to partnering with you. For example, if you are offering food delivery, find out the number of restaurants in the location you are looking to operate in.
Cost of Starting the Business
The next factor to consider is the cost of starting the business. This includes:
- Delivery vehicle
- Cost of equipment, including telephone, desktops.
- Cost of getting or obtaining a license to operate the delivery business.
2. Set up a Structure for the Business
For a start, you can run the business as a sole proprietorship. With time, you can put the necessary structures in places, such as turning it into a Limited Liability Company (LLC), Partnership, or Corporation. Here’s an article on how to set up an LLC in the United States.
Also, it is essential to come up with a brand name and a definitive brand strategy. This is one of the core Unique Selling Points (USPs) that set your delivery business apart from your competitors.
3. Get Corporate with the Delivery Business
Before going mainstream, ensure that the delivery business is corporate. This includes opening a bank account in the name of the logistics business, registering it with the relevant authorities, and getting an insurance policy.
Take note that tax registration is also important, especially when the business has been registered as an entity.
Obtaining an Employer Identification Number (EIN) is important at this stage. Note that the taxation policies might differ by state. So, check with the local authorities to be sure.
4. Create a Delivery Process
At the end of the day, last-mile delivery is one of the major challenges of starting a delivery business. It is imperative to get it right from the onset so that the customers wouldn’t be dissatisfied with your service.
Here are a couple of ideas on how to create a delivery process for your delivery business:
The routes to be taken by the delivery drivers should be well planned. It works best if you have multiple cars with several drivers. While Driver A is covering Route A, Driver B is covering Route B.
Another advantage of Route Planning is that it helps the drivers in prioritizing deliveries along the following lines:
- The proximity of the driver to the customers at a particular time.
- The closest locations would be prioritized over the farthest.
- The number of stops to make daily.
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Route planning can go a long way to help you overcome issues that come with late delivery to your customer. This is a smart way to increase your customer lifetime value.
The drivers should also be efficient to make the stops and ensure that the package is delivered in good time.
5. Hire Your First Set of Employees
It is time to hire the first set of people to work for your delivery startup. From the website designer to drivers and HR personnel, you need to hire them before starting.
6. Make Communication Seamless
Communicating with customers about the latest updates to their deliveries is very important. This not only gives them real-time updates on the status of their shipments but also shows how serious you are.
You may be able to automate the entire process with the help of delivery software. This will handle the order and delivery processing, including package tracking.
Likewise, telephone lines should be open for customers that want to get in touch. If you can’t handle all the inquiries alone, hire a virtual assistant. Opening an email address for inquiries and adding a contact button to your delivery company website can also help break down the communication gap.
Starting a delivery business in the United States requires market understanding, the ability to evaluate market opportunities, and coming up with solutions to redefine the target market’s experience. The tips in this article should help you start on the right foot. As the business grows, hire more drivers to simplify the logistics company process. Also, invest heavily in marketing to get the word out.