How to start your own delivery business?
Starting your own local delivery business can be quite simple if you stick to a simple plan and don’t carelessly blunder. Use the information below to set up and grow your delivery business to be sure to achieve quick success in the field.
Today for many of us the work takes so much more time and focus than before. Therefore, delivery services for meals, goods and even water have become common.
More and more people are forced to save time and spend money on the delivery of groceries, fresh food, purchases made online etc, mainly because of its convenience. Besides that, delivery companies usually offer additional services and discounts, which makes their service so much more profitable than shopping yourself.
Let’s define your key delivery competencies and test the capabilities of FdhCloud Delivery system for your future business.
How to start a delivery of the restaurant food?
The delivery of fast food and classic restaurants meals is swiftly replacing regular dining out due to today’s living conditions. A well-established delivery of local restaurant food is a great way to leverage existing resources in the local market to provide better customer service while also making good money by taking advantage of the local market and the habits of the locals.
Many delivery services today are branches of national companies in the local market. You can use to your advantage the lack of flexibility in corporate processes of large national food delivery structures, which are not profitable to provide personalized service to customers and find it difficult to bypass corporate delivery service standards.
Your strength as a local food delivery service lies in flexibility and building good relationships with customers you know personally or through acquaintances, if you plan to serve the local market for the delivery of food, groceries and various goods purchased online.
FdhCloud Delivery solution provides sufficient functionality for organizing and managing a restaurant food and fast food delivery service, using its capabilities to quickly start your business.
Important conditions of Starting Your Own Delivery Business
Today the services of delivering groceries, meals and goods shows the most rapid growth and is an important part of the US economy. They play an important role in supporting the catering and e-commerce sector in the delivery of purchases and food, as well as in finding new customers.
During the period of restrictions, especially on visiting public places, delivery companies have become popular options for many of us. However, aspiring entrepreneurs still have the opportunity to carve a niche in their cities by starting a home delivery business.
So what do you need to start your food and goods delivery business?
Calculate the amount needed to start your business.
A short business plan and the investment capital are the main conditions for starting your delivery business.
In a business plan, you need to calculate the basic costs of renting premises, leasing vehicles, operating expenses, salaries, purchasing or renting software, determine delivery rates, and take into account payments for electricity, gas, and water.
When preparing a business plan, you need to consider the time and money spent on collecting the target client base, the initial marketing costs, as well as the time it takes to make the first profit, so that in case of a shortage of funds, you could attract an investor.
To start a delivery business, your start-up costs can range from $ 3,000 to $ 20,000, depending on your initial customer base and your capabilities, to provide you with operational attractiveness and guarantee delivery from the very beginning.
Let’s define your key delivery competencies and test the capabilities of the FdhCloud Delivery system for your business
Your start-up investment may include:
Workroom and office.
These include the cost of renting an office, space for processing, if needed, and parking for vehicles. These terms may vary depending on the conditions of where you’re doing business, on your initial customer base and the region of operation.
It is best to get a space in the center of your region – it can significantly reduce delivery times and lower your costs. But if you are limited in investment, then you can rent an office and a warehouse on the outskirts of the city, which would significantly reduce the cost of renting a work space.
Office equipment and furniture costs.
To start your company, you will need a minimum of equipment: a computer, telephones, Internet access, a printer and scanner, and some furniture. You can use your personal computer and phones, as well as unnecessary furniture from home or you can rent from the neighbors. But within six months, you should plan all necessary investments for the purchase of new equipment.
Licenses to conduct delivery business and insurance for employees
You will need to get a license if it’s required by state or local law. Often, small businesses that provide transportation and delivery services require employee insurance, while a delivery business also needs insurance for commercial vehicles. In most states you will need to provide health insurance as soon as you hire an employee.
Marketing Costs for Customer Acquisition
You will need to promote your business to attract new customers to your delivery service. Think of a website or mobile app, branded clothing, transportation logos, office signs and ads in search and local media.
Work out a simple marketing plan that you can complete within the first 3-4 months. Plan advertising on the Internet, social networks, radio, in local media. Use the power of guerrilla marketing to reduce advertising costs.
Use our solutions to promote your business on the Internet.
Vehicles and equipment for processing and delivery:
Usually small delivery companies use leased vehicles or employees’ cars with compensation of costs, as well as various equipment for their couriers and drivers, so that they can carry out delivery while keeping the food and purchases fresh and intact. This is your primary responsibility, as transport and delivery equipment are your primary means of doing business.
Check out the offers of local banks and leasing companies to see the conditions of getting the necessary vehicles for delivery. Usually, such offers are quite profitable and acceptable for small businesses and allow you to rent new fuel-efficient cars from the start, which are suitable for delivery in terms of their performance characteristics.
Remember that three parameters of transport are important for you: high efficiency, the required cargo capacity and high operational reliability of the vehicle. This will help you provide quality delivery services without disruptions or breaching of your obligations to customers.
Use new technologies
It is very important for a new delivery service to create a convenient and attractive website or application so that it would be possible to promote your services on the Internet and communicate with your future customers. You need to create a modern website with simple and intuitive navigation immediately to offer your potential customers services that are beneficial for their business.
Your website or application should also contain all the important information that your customers might need, including a list of services, price list, delivery time and offers for different customers, as clearly structured as possible: delivery of food from a restaurant, delivery of purchases, home delivery, grocery delivery, fast food delivery, etc.
Order a quality website or cross-platform web application for your delivery service from Front Desk Helpers.
Our web programmers and web designers can help you create a website or cross-platform web application for a delivery service. Our specialists will help you determine the design, specification, functionality of the web application, as well as suggest which modern technologies can be useful for your business. We can also develop a website for a ready-made technical specification for your delivery service.
Find b2b and b2c customers for delivery service
Find your customers in your local market. Create your own unique “marketplace” to start delivery in your area. You know better than anyone what customers of local shops, offices, restaurants and cafes need. Even if you live in a big metropolis like New York or Miami with a lot of delivery services, you can still find your client. In a small town you can use your acquaintances to get a “quick start” and start a delivery business, using your friends as your new customers.
Knowing and understanding the needs of your target audience will increase the chances of your business being successful. Explore the neighborhood where you plan to be doing your business – are you close to a business district, is there a university or college, restaurants and cafes, online and offline shops, or maybe it is an industrial area where local delivery services from large logistics hubs are important for small manufacturing enterprises?
Your delivery service will be easier to sell if you pinpoint your specific features and unique benefits for your b2b partners. You can offer delivery from restaurants, cafes and shops in a specific area to customers who live in this area at a better price, with discounts during peak hours, or in less time. Or perhaps you can offer additional useful services or essential goods at a lower price, for example, environmentally friendly delivery by electric car or e-bike in a shorter time and / or at lower cost.
Use our capabilities to conduct your own market research and study your customers and the market more accurately. Market Research Survey Services for Businesses.
Chat with your potential clients, online store managers, law offices, bankers, doctors, city services. They all need delivery services. To some it is necessary to promptly send goods or correspondence, some need to receive delivery of products by a certain time, others need to send goods or parcels on the same day.
Restaurants need fresh produce from the farmers’ market to be delivered every day at a specific time to prepare delicious meals. Country clubs need to shop for beverages and groceries in the markets to replenish their stocks on a specific day. Talk to the managers to find out what they need and offer them your services at a reasonable price with certain guarantees.
As soon as you have regular customers and you have established friendships, ask them to recommend you to their friends and acquaintances to expand your client base. Explain to them that you are still growing your business and want to find new customers to expand. Offer them discounts or free shipping once a month in exchange for a recommended customer who will become your regular customer.
In any local target market, you can find new opportunities and new values for which your customers are willing to pay. Consider, calculate, concentrate on the main value that is important specifically for your local market. These may even be very unexpected decisions: a lower cost of delivering meals using an electric car and a quadcopter within a complex urban area with high traffic, or, on the contrary, a very economical way of delivering purchases in rural areas by an average truck at a bargain price or faster than others, but with a high guarantee of delivery on time.
A large national operator like Fedex or UPS will probably be able to offer delivery from more online stores and cities than you, but you can offer food delivery from local restaurants, or fast delivery of organic farm products to nearby cities – that matches the needs of your local retail customers.
Your best b2b partners will be local restaurants, eateries and cafes, small farm shops that do not have their own delivery and are looking to expand their business as they have the opportunity to increase the number of sales.
The secret of success for any business is to give your customers the value they need on favorable terms. Often this benefit is not even expressed in money. This could be a time-efficient service or a solution to an existing problem or difficulty that your client’s employees cannot solve on their own. Fill the delivery service gap by providing local businesses with same-day delivery and right-on-time guarantees.
You can use our offer for outsourcing call center operators or even get your own virtual call center with several professional operators at a very competitive price. Innovative Call Center For Efficient Communications And Sales.
Resources for your delivery service
New courier delivery service for restaurants or online stores must have access to transportation. You may need cars, scooters, bicycles, or even quadcopters. You can start with your own transport or, for example, lease several electric cars and electric bikes and build a service on your resources, adding additional transport and drivers if necessary.
But it is possible to grow using the scheme of transport partners, when you hire drivers with their own transport and compensate for the transport costs. It is also necessary to determine and purchase transport containers to preserve the quality of the delivered purchases: boxes for hot and / or cold food, boxes for groceries, goods, etc.
When delivering meals from restaurants or fast food, please note that a special system must be used to prevent sauces, soups and drinks from spilling during transportation. Your couriers should be trained to carefully handle the orders they deliver in order to minimize the expenses associated with damage of the products.
Do not waste money on various improvements that will not bring you profit immediately. Resist the urge to spend your financial resources to make everything perfect. When you’re just starting out, you need to set a rate of income based on the cost of your services and stick to it or even look for ways to minimize costs.
If you have a car (pickup or minivan) for delivery or you know where to buy a cheap one – use it, don’t spend thousands of dollars on a new car for the business. In the first months, a clean car in a good condition with a corporate logo will be enough for you. You can use the vehicle you already have, or buy a used one for half the price (just make sure it works!).
You can even use your own garage for the first few months instead of a temporary office. This is how many of today’s multimillionaires began. Don’t waste extra money on rent, utilities and admin costs for a separate office warehouse. Be frugal until you build a stable income and start making predictable profits.
Delivery Service Software
Front Desk Helpers offers a turnkey delivery service software solution. The FdhCloudDelivery application is designed for medium and small businesses that provide delivery of food, groceries, goods, etc.
In order to choose the right delivery software for you, you need to pay attention to the main factors that will help you organize deliveries quickly, accurately and with minimal costs, i.e. efficiently using available resources.
- High performance of transport, drivers and couriers.
- Reduced costs of order processing and delivery.
- Fast and accurate processing of delivery requests.
- Automation of processes during delivery.
- High quality customer service.
- Tracking routes and location of parcels and transport.
- Interaction with clients and simplified electronic document management.
- Ability to manage deliveries in real time.
Focusing on these important conditions and our experience, we have created a simple and convenient software system for managing the delivery service – FdhCloud Delivery. With its help, without much effort and with a minimum of knowledge you will be able to organize the work of the delivery service and effectively manage your drivers, couriers, transport and parcels without the threat of non-delivery or damage.
We provide comprehensive support to our clients at the stage of implementation of software and after the launch of your business. Our software solution will allow you to easily achieve your goals and determine a high level of quality of services provided, manage the efficiency of activities and the productivity of your resources.
Create a payment structure that will ensure you have enough income to make a profit, and for restaurants and customers to use your services. Decide what delivery time you will guarantee to your clients.
Customers do not like to wait longer than an hour after they place an order, but the time can be stressful and logistically challenging for your partners in the restaurants that are using your delivery. Serving a well-defined geographic area where you guarantee delivery within an hour or two will ease the problem and enable you to meet customer requirements.
Pricing and Tariff Rates
The delivery service makes money by charging restaurants, fast food, online stores, b2b customers, or receives payment for its services as a delivery charge to a retail customer.
Set your accurately calculated tariff rates for several service options for b2b and b2c clients. Use the help of an accountant to calculate tariffs sufficient to cover all your expenses. Lack of reasonable shipping rates is the most common mistake for aspiring entrepreneurs because they are not informed enough and have little business experience to understand how all the small costs and fees for licenses and permits affect the way they do business.
Other options include accounting fees, social security taxes, employee and vehicle insurance, vehicle maintenance, and more. Do not forget about the need to provide discounts for different purposes for your customers.
A good rule of thumb to use at a starting point is to add around 30-35% to your hourly wage rate to get a reasonable rate for your shipping services. Thus, the tariff will allow you to make a profit and at the same time will be acceptable for your customers. After 2-3 months, check your rates and make sure again that your rates match your calculations and provide a profitable hourly rate for you.
Start and grow your delivery business, and we will take over the back office functions to provide you with professional remote services for registering a US business, accounting, financing assistance, certified accountant services and much more. Accounting And Bookkeeping Services For Delivery Startups.
You will compete with well-known companies in this area, such as Uber, Amazon and others. Your local agreements, acquaintances and partnerships can give you a competitive edge over national brands, and you, with your lower commissions and shipping charges, can offer your partners and customers deals that will help you make money.
Set a price for providing an exceptional service.
If you provide your customers with high-quality delivery services, then everything will develop perfectly for you, and soon there will be a constant influx of new customers, who in turn will recommend you to their friends. For example, if you promise to complete a delivery within an hour, then you must complete it within 45 minutes in order to have some time for unforeseen delays and disruptions.
Your customers will like this approach, as they receive guaranteed deliveries without changes and therefore they will gladly recommend you to other customers.
Manage delivery with FdhCloud Delivery to plan and manage the work of drivers and couriers. Hire an outsourced dispatcher, rent a call center operator in order to not miss a single delivery request and deliver on time. In this program, for a small monthly fee, you can organize all processes of management and control of your activities and save money, time and nerves for productive work.
Use the wide possibilities for integration with other business applications to accept orders online, track delivery, optimize routes and receive payments online through Paypal, Google pay or Apple pay. Harness the power of digital technology to improve business performance and thereby increase its profitability.
Get an outsourced call center operator to minimize expenses and increase the number of received calls by 100%. Innovative Call Center For Efficient Communications And Sales.
Determine the legal and financial requirements.
Create a company for running delivery as a legal entity. It will help protect your personal assets if the need arises, since any commercial enterprise is subjected to market and other risks. You can choose from several types of businesses such as LLC, Corporation, or DBA. To do this, you need to consult with a lawyer or CPA specialist, who usually provide such information.
You need to register your company with the tax office to pay taxes. Apply for an employer identification number on the IRS website. Check the state and federal tax requirements for doing business in your area to make sure you comply with all legal requirements.
Open a bank account for your company. A separate bank and credit accounts for your business will help you receive and send funds, pay salaries and taxes. You will also need to hire an outsourced accountant for accounting and tax calculation.
Check with your local, state, and federal small business agencies to obtain all permits and licenses required to operate a delivery service in your area.
Control your expenses and don’t do things that won’t be profitable.
The main rule of a startup is to control expenses and quickly attract new customers. Usually, an accounting program or the services of an accountant are used to control expenses. If in the first months you cannot hire a permanent accountant, then find an outsourced one. It is profitable and an outsourced accountant will help you control expenses and pay taxes to avoid big problems with the IRS.
Front Desk Helpers can provide you with an outsourced accountant who will take care of all matters related to your company’s accounting. An outsourced accountant can remind you of the due dates for paying taxes if you want to pay them yourself, but can do all the work related to bookkeeping and pay taxes on your behalf.
Use our service of accounting outsourcing and learn more about Bookkeeping to outsource.
New trends in the business of the past few years and the introduction of innovative technology has fundamentally changed our shopping habits and the way we shop. These trends have also affected the food, restaurant and fast food sectors. This, in turn, was reflected in a change in the concept of doing business for many companies in the United States.
Regardless of how we all planned to develop our favorite business and how we saw the future in many industries, everything changed very quickly and today requires high flexibility from companies working in the delivery of purchases and food delivery industries.
Buying various goods in online stores, ordering restaurant meals with home delivery, delivering everyone’s favorite fast food: pizza, noodles, meat dishes, snacks and drinks are becoming more and more popular in the country. Therefore, it makes sense that the need for a large number of deliveries of groceries, food and various purchases increases in proportion to our changing consumer preferences.
The introduction of the latest technological solutions and platforms in the field of online shopping and delivery allows to say with great confidence that the delivery services business awaits a rather bright and cloudless future, as technological solutions for delivery have significantly increased the efficiency of delivery services and the productivity of couriers and drivers.
All the ingredients for the growth of demand for delivery are here:
- free access to purchases in online stores 24/7;
- change in consumer preferences;
- changing the ways of work and rest;
- ordering platforms with purchase tracking technologies;
- growing consumer appetite for tasty and healthy food;
- reformatting the work of the restaurant industry;
- improving the efficiency of delivery services.
Because of these exciting market opportunities, an entrepreneur looking to start a grocery and grocery delivery business can focus on the conditions needed to satisfy a growing category of online shoppers and enter the business with significantly lower capital expenditures than before.
The “purchase + delivery” or “request + delivery” concept democratizes access for entrepreneurs who seek to exploit new markets without the need for an existing broad customer base or physical location in a high traffic area to ensure business performance. We are truly confident that this new concept will create additional opportunities for the creation of new companies in the online shopping and delivery segments, as providers of catering, online shopping and food delivery services sandwiched between large online shopping trucks and large logistics warehouses.
In addition, it is possible to predict that the next few years will be an interesting testing ground for the creation of new business concepts that seek to crystallize new approaches and get the opportunity to build new efficient companies with more flexible opportunities in the delivery segment.
Front Desk Helpers offers a turnkey delivery service software solution. The FdhCloudDelivery application is designed for medium and small businesses that provide services for the delivery of food, groceries, goods and other purchases.