A cargo van delivery company is a business that delivers freight for clients. Cargo van delivery businesses accept delivery assignments from clients or a courier agency. They plan their route, load and unload cargo, document each pick-up and delivery, and ensure timely delivery.
Cargo vans are larger than the average sedan hence they are suitable for helping people move or making large deliveries. Please note that the cargo van delivery business is a niche idea in the moving services industry. A recent report published by Nexus shows that there are 7,000 moving companies in operation, servicing 13,900 locations nationwide.
With a fleet of 7500 trucks and a network of approximately 400 affiliated agencies, United Van Lines is the biggest cargo van delivery business in the United States. The Self-Storage and Moving Services market in the U.S. is estimated at US$23.9 Billion in the year 2020. Please note that the moving services industry has a low level of market share concentration, with the top four largest operators accounting for 9.8 percent of the industry.
Steps on How to Start a Cargo Van Delivery Business
Table of Content
Conduct Market Research
If you are considering starting a cargo van delivery business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your cargo van delivery business should be to develop market-based research questions in line with your overall business goal and objective.
In this regard, you should source information that will help you maximize your business, help you know what your potential market will be looking out for from a cargo van delivery business, and also help you operate your cargo van delivery business with less stress.
a. Who is the Target Market for Cargo Van Delivery Business?
- Households who would want to move from one apartment to another
- Corporate organizations who would want to move from one office to another
- Government agencies who have cause to move light goods and materials from one location to another
- E-commerce businesses
- Merchants and Warehouse Operators
- Retailers who would want to move their goods from one location to another
- Manufacturers (furniture and home appliances manufacturers et al).
b. Is Cargo Van Delivery Business a Profitable Business?
Yes, the cargo van delivery business is quite profitable. Available data shows that the industry is worth over $23.9 billion.
c. Are There Existing Niches in the Industry?
No, there are no existing niches when it comes to the cargo van delivery business because the cargo van delivery business is a niche in the moving services industry.
d. Who are the Major Competitors?
- Wanner’s Transportation and Delivery
- CH Robinson
- Total Quality Logistics
- XPO Logistics
- Echo Global Logistics
- Worldwide Express
- Coyote Logistics
- Landstar System
- Mode Transportation
- GlobalTranz Enterprises
- JB Hunt Integrated Capacity Solutions
- Hub Group
- BNSF Logistics
- KAG Logistics
- Yusen Logistics (Americans) Inc.
- England Logistics
- ArcBest Corporation
- Allen Lund Companies
- Redwood Logistics.
e. Are There County or State Regulations or Zoning Laws for Cargo Van Delivery Business?
No, there are no county or state regulations or zoning laws for cargo van delivery businesses, but players in this industry are expected to work with the existing regulations governing similar businesses in the county where their business is domiciled.
f. Is There a Franchise for Cargo Van Delivery Business?
Yes, there are franchise opportunities for cargo van delivery businesses. Here are some of them;
- Two Men and a Truck Int’l. Inc. (Initial Investment – $100,000 – $585,000)
- Units Franchise Group Inc. (Initial Investment – $460,022 – $1,083,322)
- Crowning Touch Senior Moving Services Inc. (Initial Investment – $323,000 – $551,500)
- Box Galaxy (Initial Investment – $95,000)
- Zippy Shell Moving and Storage (Initial Investment – $657,450 – $1,219,830)
- You Move Me (Initial Investment – $78,500 – $169,500)
- Metropolitan Movers Inc. (Initial Investment – $55,500 – $250,000)
- NorthStar Moving Co. (Initial Investment – $100,000 – $225,000)
- 1-800-Packouts (Initial Investment – $69,450 – $234,000)
- Navis Pack and Ship Centers (Cash Investment – $100,001).
g. What Do You Need to Start a Cargo Van Delivery Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- Box Trucks
- Commercial Driver’s License (CDL) (at least a Class B CDL)
- EIN (Employer Identification Number)/Federal Tax ID Number.
- A Corporate Bank Account
- IRP Plates
- Operational Capital (For Ongoing Expenses)
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a cargo van delivery business are;
Creative Cargo van Delivery Business Name ideas
- Timo Turner© Cargo Van Delivery Company, Inc.
- Pick Packer® Cargo Van Delivery Company, LLC
- Pack Master© Cargo Van Delivery Company, Inc.
- Pack Solutions® Cargo Van Delivery Company, Inc.
- Pack King™ Cargo Delivery Company, Inc.
- Red Vans™ Cargo Van Delivery Company, LLC.
- Jades Transports© Cargo Van Delivery Company, LLC
- Jolly Logistics® Cargo Van Delivery Company, Inc.
- Sean Mason© Cargo Van Delivery Company, Inc.
- Carry On© Cargo Van Delivery Company, Inc.
- Pack IT® Cargo Van Delivery Company, LLC
- Vegas King® Cargo Van Delivery Company, LLC
- King George™ Cargo Van Delivery Company, LLC
- Rowland Logistics© Cargo Van Delivery Company, Inc.
- Saints Logistics® Cargo Van Delivery Company, Inc.
- Justin Martins™ Cargo Van Delivery Company, Inc.
- Link Logistics™ Cargo Van Delivery Company, Inc.
- Herald Logistics© Cargo Van Delivery Company, Inc.
- Benard Israel® Cargo Van Delivery Company, LLC
- Half Milers™ Cargo Van Delivery Company, Inc.
Register Your Business
a. What Type of Business Structure is Best for Cargo Van Delivery Business?
When it comes to the business structure of a cargo van delivery business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.
Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Cargo van delivery business?
- General Business License
- Commercial Driver’s License (CDL) (at least a Class B CDL)
- IRP Plates
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections for your parking
d. What Type of Certification is Needed to start a Cargo Van Delivery Business?
You don’t need any certifications to start a cargo van delivery business.
e. What Documents are Needed to Open a Cargo Van Delivery Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval (For your parking)
- Certificate of Incorporation
- Commercial Driver’s License (CDL) (at least a Class B CDL)
- IRP Plates
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering starting a cargo van delivery business, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Cargo Van Delivery Business?
The startup cost for a cargo van delivery business is not uniform. But basically, a cargo van delivery business will cost from $80,000 – $150,000 to start and that can easily go higher depending on your overall business goals and objectives.
The cost of the cargo vans you want to use for the business is a major factor that will determine the overall cost of starting your cargo van delivery business. For example, the price of Nissan NV200 Compact Cargo starts at $25,855, the price of the Ram ProMaster City Cargo Van starts from $27,410 and the price of Ford Transit Connect Van starts from $28,570.
In general, cargo vans usually range in price from about $25,000 to $45,000. The size and power of the van play a large role in determining the price. A diesel model is also more expensive than a gasoline model
b. What are the Costs Involved in Starting a Cargo Van Delivery Business
- The total fee for registering a business in the United States of America – is $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services total – $1,200.
- Marketing expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
- The cost for hiring a business consultant (writing of business plans inclusive) – is $4,500.
- Insurance (general liability, workers’ compensation, auto, and cargo insurance) coverage at a total premium – of $12,400.
- The cost of logistics software, accounting software, CRM software, and Payroll Software – is $1,500
- The cost for leasing a facility (long-term lease agreement) – is $65,600.
- The cost for facility remodeling and installations – is $20,000.
- The cost for the purchase of cargo vans: is $80,000
- Other start-up expenses including stationery – $500
- Phone and utility deposits will cost – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
- The cost for store equipment (cash register, security, ventilation, signage) – $3,150
- The cost for the purchase of office furniture and gadgets – is $8,000.
- The cost of launching an official website – is $850
- The cost for our grand opening party – is $3,000
- Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Cargo Van Delivery Business?
- The size of cargo van delivery business (number of cargo vans to start the business with)
- The choice of location
- The required licenses and permits
- The cost for branding, promotion, and marketing of the cargo van delivery business
- The cost of furnishing and equipping the facility
- The cost of the insurance policy covers
- The cost of registering the business
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for the grand opening of the cargo van delivery business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
The truth is that it is not compulsory to build a new facility for your cargo van delivery business, but, if you have the required finance, it will pay you to build your own parking facility and administrative office. This will help you come up with a facility that will fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Cargo Van Delivery Business?
- Gas and lubricants
- Toll fees
- Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
- Salaries of employees
- Cargo vans maintenance
- Marketing costs
f. What is the Average Salary of your Staff?
- Chief Operating Officer (Owner) – $68,000 Per Year
- Admin and HR Manager – $48,000 Per Year
- Transport and Logistics Manager $48,000 Per Year
- Marketing and Sales Executive (Business Developer) – $42,000 Per Year
- Accountant $38,000 Per Year
- Cargo Van Drivers – $36,800 Per Year
- Packers and Loaders – $28,000 Per Year
- Customer Service Officer (Receptionist) – $26,100 Per Year
- Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Cargo Van Delivery Business?
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Link Logistics™ Cargo Van Delivery Company, Inc. is a licensed cargo van delivery company that will be based in East Rutherford, New Jersey. We will offer a diverse selection of cargo van delivery options for a variety of cargo load sizes for clients and businesses across East Rutherford and throughout major cities in the United States.
- Cargo van deliveries for clients
- Cargo van rentals and leasing
- Sprinter delivery
- Flatbed truck delivery
- Box truck services
c. Mission Statement
Our mission is to build a business that is notable for excellent delivery services.
Our Vision is to build a reputation for being one of the fastest and most efficient cargo van delivery providers in the United States.
d. Goals and Objectives
The goals and objectives of a cargo van delivery business are to help households, and businesses move their goods from one location to another.
e. Organizational Structure
- Chief Operating Officer (Owner)
- Admin and HR Manager
- Transport and Logistics Manager
- Marketing and Sales Executive (Business Developer)
- Cargo Van Drivers
- Packers and Loaders
- Customer Service Officer (Receptionist)
a. SWOT Analysis
- Excellent operational history
- Attention to detail.
- Accurate estimates with no hidden costs.
- Experience and trained professionals.
- Excellent customer testimonials.
- Timely, reliable, and efficient cargo vans and service.
- Not enough existing clientele to run at full capacity immediately
- The owner is new to large scale marketing
- We will need a loan to build our facility and purchase cargo vans
- Lack of economies of scale.
- Build upon existing clientele
- Online market, new services, new technology, and of course the opening of new markets.
- Increase in the number of families moving from one apartment to another.
- Increase in the movement of goods from one location to another
- Increase in retailing activities and warehousing.
- Instability in the cost of gas (fueling)
- Loans diminish profitability until they are paid off
- The first year will be financially tight while we gain customers and pay off loans
- Competition in the area could increase
- Management of employees requires time, money, and efforts
- The transport department could change its regulatory status and decide to enforce strict regulations that can strangulate new business.
b. How Do Moving Companies Make Money?
Moving companies make money by charging clients for moving their goods from one location to another and also by advertising on their cargo vans and offering related services.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales & Advertising Strategies
- Introduce your cargo van delivery business by sending introductory letters alongside your brochure to organizations that are into manufacturing, merchants and warehouse operators, households, and key stakeholders in and around your city and state
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities, train stations et al.
- Use friends and family to spread the word about your business
- Post information about your company and the services you offer on bulletin boards in places like schools, libraries, and local coffee shops et al
- Place a small or classified advertisement in the newspaper, or local publication about your company and the services you offer
- Leverage on referral networks such as agencies that will attract clients who would need your services
- Advertise our business in relevant magazines, newspapers, TV, and radio stations.
- Attend relevant expos, seminars, and business fairs et al to market our services
- Engage in a direct marketing approach
- Encourage the use of word-of-mouth marketing from loyal and satisfied customers
- Join local chambers of commerce and industry to market your services.
a. How Much Should You Charge for your Service?
Generally, most cargo van delivery companies charge an hourly rate and it is usually between $8 and $60 per local delivery and up to $650 for long-haul deliveries.
b. How Much Profit Do Cargo Van Delivery Business Owners Make a Year?
It depends, but the available report shows that on average, a cargo van delivery business owner should net more than $65,446 per year assuming they have a steady clientele.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the cargo van delivery business (number of cargo vans owned)
- The types of related services and products offerings (storage, warehousing and advertising et al)
- The location the cargo van delivery business is covering
- The management style of the cargo van delivery business
- The business approach of the cargo van delivery business
- The advertising and marketing strategies adopted by the cargo van delivery business.
- The number of years the cargo van delivery business is in business
d. What is the Profit Margin of a Cargo Van Delivery Business?
The profit margin of a cargo van delivery business is not fixed. It could range from 35 percent to 65 percent depending on the distance of the goods to be transported.
e. What is the Sales Forecast?
Below is the sales forecast of a cargo van delivery business. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $320,000
- Second Fiscal Year: $580,000
- Third Fiscal Year: $1.15 million
Set Up your Office
a. How Do You Choose a Perfect Location for Cargo Van Delivery Business?
- The demography of the location especially as it relates to the movement of goods from one location to another
- The demand for the haulage services offered by cargo van delivery companies in the location
- The purchasing power of businesses and the residents of the location
- Accessibility of the location
- The number of cargo van delivery companies, moving companies, and owner-operated van businesses in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Cargo Van Delivery Business?
- South Louisiana, Louisiana
- New York City, New York
- Houston Texas
- East Rutherford, New Jersey
- Long Beach, California
- Baltimore, Maryland
- Pittsburgh, Pennsylvania
- Pascagoula, Mississippi
- Tampa Bay, Florida
- Hampton Roads, Virginia
c. What Equipment is Needed to Operate a Cargo Van Delivery Business?
You should be prepared to purchase forklifts, loaders, pallets, dashcams, crates, computers or laptops, internet facility, telephone, fax machine, office furniture (chairs, tables, and shelves) among others and all these can be gotten as fairly used.
When it comes to hiring employees for a standard cargo van delivery business, you should make plans to hire a competent chief executive officer (you can occupy this position), admin and HR manager, transport and logistics manager, marketing and sales executive (business developer), accountant, cargo van drivers, packers and loaders, and customer service officer (receptionist).
Launch the Business Proper
In recent times, no cargo van delivery business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the cargo van delivery business, you will be able to inform people in your city that your cargo van delivery business is open for business.
a. What Makes a Cargo Van Delivery Business Successful?
- Choose a good location and reliable cargo vans to launch the business
- Hire only competent, hardworking, and trustworthy staff
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your cargo van delivery business
- Leverage all available online and offline platforms to promote your cargo van delivery business
b. What Happens During a Typical Day at a Cargo Van Delivery Business?
- The business is open for the day’s work
- The cargo vans are washed, cleaned, and ready for the delivery of goods and cargo
- Customer’s requests are taken and they are scheduled or attended to
- Schedule maintenance of cargo vans is carried out
- Marketing/website upkeep
- Supply ordering
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Cargo Van Delivery Business?
- Good driving skills
- Customer services skills
- Interpersonal skill
- Logistics and material handling skills
- Business management skills
- Bargaining skill
- Work experience in the transport and logistics industry
- Experience in managing people
- Experience in business administration
- Experience in handling logistics and transportation software.