Courier Business

A courier company provides air, land, sea, or combined express delivery of parcels, documents, and packages for individual and corporate clients. Courier and delivery companies generally provide services between metropolitan areas or urban centers and form a network that includes local, national, and international pickup and delivery.

Available statistics show that the global domestic couriers market reached a value of nearly $454.5 billion in 2020, having increased at a compound annual growth rate (CAGR) of 8.1% since 2015. The market is expected to grow from $454.5 billion in 2020 to $736.0 billion in 2025 at a rate of 10.1%. Please note that there are 256,633 Couriers & Local Delivery Services in the US as of 2022, an increase of 5.1% from 2022.

Steps on How to Start a Courier Company

  1. Conduct Market Research

If you are considering starting a courier service, 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 courier services 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, give you reliable information about what your potential market will be looking out for from a courier services business, and also help you operate your courier service with less stress and increased profitability.

a. Who is the Target Market for Courier Business?
  • Applicants (Job Seekers)
  • Students
  • Corporate Executives
  • Restaurants
  • Online stores (e-commerce organizations)
  • Banks, Insurance Companies, and other related Financial Institutions
  • Blue Chips Companies
  • Corporate Organizations
  • Manufacturers and Distributors
  • Real Estate Owners, Developers, and Contractors
  • Research and Development Companies
  • The Government (Public Sector)
  • Schools (High Schools, Colleges, and Universities)
  • Hotels
b. Is Courier Services Business a Profitable Business?

Yes, the courier services business is very profitable. The market value for the industry is expected to grow from $454.5 billion in 2020 to $736.0 billion in 2025 at a rate of 10.1 percent.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to the courier services business.

d. Who are the Major Competitors?
  • UPS Supply Chain Solutions
  • Deutsche Post: DHL Group.
  • FedEx Corporation.
  • Kuehne + Nagel Inc.
  • Nippon Express.
  • YRC Worldwide INC
  • Central Courier
  • Lone Star
  • TNT
  • Zipments
  • Pace Couriers
  • Transportes Pitic
  • Spee Dee Delivery Service
  • Dicom Canada
  • LaserShip Inc.
  • TFI International
  • OnTrac Inc.
  • Purolator
  • Ryder Supply Chain Solutions
  • B. Hunt
e. Are There County or State Regulations or Zoning Laws for Courier Business?

No, there are no county or state regulations or zoning laws for courier services businesses, but players in this industry are expected to work with the existing regulations governing similar businesses in the county where their business will operate.

f. Is There a Franchise for Courier Business?

Yes, there are franchise opportunities for the courier services business. Here are some of them;

  • Central Courier
  • AIM Mail Centers
  • Postal Connections
  • Postal Annex+
  • PostNet Printing Franchise
  • Pak Mail
  • The UPS Store
  • Pack & Send Franchise
g. What Do You Need to Start a Courier Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Vans, Bikes, and Collaboration with Airline Operators
  • Insurance
  • EIN (Employer Identification Number) / Federal Tax ID Number.
  • A Corporate Bank Account
  • Employees
  1. 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 courier business are;

Courier Business Name ideas
  • Kate Kent© Courier Services Company, Inc.
  • Larry Doke® Courier Services Company, LLC
  • Swift Network© Courier Services Company, Inc.
  • Windless® Courier Services Company, Inc.
  • Delivery King™ Courier Services Company, Inc.
  • Eagle Wings™ Courier Services Company, LLC.
  • Flames© Courier Services Company, LLC
  • Andriel Moses® Courier Services Company, Inc.
  • Hollow Way© Courier Services Company, Inc.
  • Dolphine Jones© Courier Services Company, Inc.
  • Long John® Courier Services Company, LLC
  • Allen Sean® Courier Services Company, LLC
  • Verone Vincent™ Courier Services Company, LLC
  • All Season© Courier Services Company, Inc.
  • Sid Jones® Courier Services Company, Inc.
  • Tim Donald™ Courier Services Company, Inc.
  • Puddles™ Courier Services Company, Inc.
  • Jules Cob© Courier Services Company, Inc.
  • Joel Nelson® Courier Services Company, LLC
  • Feather Pack™ Courier Services Company, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Courier services business?

When it comes to the business structure for a courier services business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers need 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 Courier Services Business?
  • General Business License
  • Zonal Permits
  • Signage Permit
  • Operational State Facility Inspections for your warehouse
d. What Type of Certification is Needed to start a Courier Business?

You don’t need any certifications to start a courier services business.

e. What Documents are Needed to Open a Courier Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval (For your parking)
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a courier services business, usually you may not have any need to file for intellectual property protection or trademark. This is so 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.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Courier Business?

The startup cost for a courier services business is not uniform. But basically, a standard courier services business will cost over $250,000 to launch.

b. What are the Costs Involved in Starting a Courier 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 – $10,200.
  • Marketing promotion expenses – $5,000
  • The cost for hiring a business consultant (writing of business plans inclusive) – is $4,500.
  • Insurance (general liability, workers’ compensation, and auto insurance) coverage at a total premium – of $22,400.
  • The cost of logistics software, accounting software, CRM software, and Payroll Software – is $7,500
  • The cost for leasing a warehouse facility (long term lease agreement) – is $120,600.
  • The cost for facility remodeling and installations – is $20,000.
  • The cost for the purchase of vans, trucks, drones, and bikes – 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) – $80,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,150
  • The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al) – is $20,000.
  • The cost of launching an official website – is $600
  • The cost for our grand opening party – is $5,000
  • Miscellaneous – $5,000
c. What Factors Determine the Cost of Opening a Courier Business?
  • The size of courier services business (the number of vans, trucks, drones, and bikes owned)
  • The choice of location
  • The required licenses and permits
  • The cost of hiring and paying a business consultant and attorney
  • The cost for branding, promotion, and marketing of the courier services business
  • The cost of furnishing and equipping the facility
  • The cost of insurance
  • The cost of registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost of the grand opening of the courier services business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your courier services business, but if you have the required finance, it will pay you to build your own warehouse facility and administrative office. The truth is that building a warehouse facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Courier Business?
  • Fueling
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Salaries of employees
  • Vans, trucks, and bikes maintenance
  • Insurance
  • Marketing costs
f. What is the Average Salary of your Staff?
  • Chief Operating Officer (Owner) – $55,000 Per Year
  • Admin and HR Manager – $40,000 Per Year
  • Transport and Logistics Manager $40,000 Per Year
  • Marketing and Sales Executive (Business Developer) – $35,000 Per Year
  • Accountant $38,000 Per Year
  • Dispatcher Riders – $30,800 Per Year
  • Material Handlers / Yard Spotters / Forklifts Operators – $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 Courier 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.
  1. Write a Business Plan

a. Executive Summary

Feather Pack™ Courier Services Company, Inc. is a registered and licensed courier services company that will be based in the heart of New York City, New York. We are well-equipped to provide our customers with postal and courier delivery services throughout the world. Feather Pack™ Courier Services Company, Inc. has been able to secure all relevant licenses and permits to operate throughout the United States.

b. Products and Service
  • Providing air, surface, or combined courier delivery services
  • Providing express messenger and delivery services
  • Delivering parcels, documents, and packages
  • Packing and sorting operations
  • Transferring and trucking (without storage)
  • Delivering time-sensitive and high-value-to-weight products
  • Providing grocery delivery services (i.e., independent service from a grocery store)
  • Providing restaurant meal delivery services (i.e., independent delivery services)
  • Providing alcoholic beverage delivery services.
c. Mission Statement

Our mission is to build a reliable, fast, and global courier services company with networks all across the globe.

Vision Statement

Our vision is to be known for our high-quality service; a brand that has the largest network in North America.

d. Goals and Objectives

The goals and objectives of a courier services business are to provide services between metropolitan areas or urban centers and form a network that includes local, national, and international pickup and delivery.

e. Organizational Structure
  • Chief Operating Officer (President)
  • Admin and HR Manager
  • Shipping and Logistics Manager
  • Marketing and Sales Executive (Business Developer)
  • Accountant
  • Dispatchers
  • Material Handlers / Yard Spotters / Forklifts Operators
  • Customer Service Officer (Receptionist)

Marketing Plan

a. SWOT Analysis
  • Excellent operational history
  • Attention to detail.
  • Accurate estimates with no hidden costs.
  • Experience and trained professionals.
  • Large storage facility.
  • Excellent customer testimonials.
  • Options like tracking and cash on delivery
  • Reliable and efficient trucks, vans, bikes, and drones.
  • Not enough 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 to purchase our first set of trucks and vans
  • The owner is currently running the business solo
  • Lack of financial capacity to compete with multi-million dollar companies such as Fed Ex Corporation and United Parcel Services who are key establishments in this industry.
  • The fact that people and businesses are always sending parcels and documents from one location to another provides us with unlimited opportunities.
  • Build upon existing clientele
  • Online market, new services, new technology, and of course the opening of new markets.
  • Increase in production activities and warehousing.
  • 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
  • Liability problems
  • The transport department could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses.
b. How Do Courier Businesses Make Money?

Courier services businesses make money by charging clients for the following services;

  • Providing air, surface, or combined courier delivery services
  • Providing express messenger and delivery services
  • Delivering parcels, documents, and packages
  • Packing and sorting operations
  • Transferring and trucking (without storage)
  • Delivering time-sensitive and high-value-to-weight products
  • Providing grocery delivery services (i.e., independent service from the grocery store)
  • Providing restaurant meal delivery services (i.e., independent delivery services)
  • Providing alcoholic beverage delivery services.
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce Your courier services business by sending introductory letters alongside your brochure to corporate organizations, schools, businesses, 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
  • 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 your 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.

Financial Projection

a. How Much Should You Charge for your Service?

According to industry reports, a courier company may charge around $1.50 per mile driven when using a car, or $2.00 per mile driven when it is a pickup truck or cargo van.

b. How Much Profit Do Courier Business Owners Make a Year?

The amount a courier services business owner is expected to make in a year is not fixed. But on average, a well-positioned courier services business is expected to make $65,000 annually.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the courier services business (numbers of trucks, vans, drones, and bikes owned)
  • The location the courier services business is covering
  • The management style of the business
  • The business approach of the business
  • The advertising and marketing strategies adopted by the courier services business.
  • The number of years the courier service is in business
d. What is the Profit Margin of a Courier Business Product/Service?

The profit margin of a courier services 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 courier services 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: $250,000
  • Second Fiscal Year: $450,000
  • Third Fiscal Year: $650,00
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Courier Business?
  • The demography of the location especially as it relates to business activities
  • The demand for the services offered by courier services businesses in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of courier services 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 Courier Business?
  • New York City, New York
  • Pascagoula, Mississippi
  • Houston Texas
  • East Rutherford, New Jersey
  • Los Angeles, California
  • Baltimore, Maryland
  • Pittsburgh, Pennsylvania
  • Tampa Bay, Florida
  • Hampton Roads, Virginia
  • South Louisiana, Louisiana.
c. What Equipment is Needed to Operate a Courier Business?

You should be prepared to purchase forklifts, loaders, packaging containers, pallets, crates et al. You will also need computers/laptops, internet facility, telephone, fax machine, and office furniture (chairs, tables, and shelves) amongst others.

  1. Hire Employees

When it comes to hiring employees for a standard courier services 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, dispatcher riders, material handlers/yard spotters/forklifts operators and customer service officer (receptionist).

  1. Launch the Business Proper

In recent times, no courier services 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 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 courier services business, you will officially inform people in your city that your courier service is open for business.

a. What Makes a Courier Business Successful?
  • Choose a good location and reliable trucks and vans to launch the business
  • Hire only competent, hardworking, and trustworthy staff
  • Throw an open house grand party before officially opening the courier services business
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your courier services business
  • Leverage all available online and offline platforms to promote your courier services business
b. What Happens During a Typical Day at a Courier Business?
  • The business is open for the day’s work
  • Clients’ orders (parcels) are taken and delivered as swift as possible
  • Maintenance of trucks and vans is carried out
  • Marketing/website upkeep
  • Supply ordering
  • Administrative duties
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Courier Business?
  • Business management skills
  • Customer services skills
  • Interpersonal skill
  • Logistics and material handling skills
  • Bargaining skill
  • Work experience in the courier services industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling logistics and shipping software.