Thinking of launching a delivery business? The industry is facing global expansion, with the more the merrier approach being generally cherished.
The reasons for the trend may not be the happiest — given the global developments — but they are also a strong impetus for easing global shipping issues.
Anyhow, a business is a business. Establishing and running one means you’ll need funds, a strategy, employees, and a myriad of other details.
Let’s see how to go about establishing a delivery business from scratch.
Market Research and Planning
Market research is an inevitable first step. Luckily, there are a couple of steps you can rely on to help you get started.
Let’s consider a typical checklist:
Identify your target market
1) Define your ideal customer persona
2) Determine their needs and pain points
3) Assess market size and demand
Research competitors
1) Identify existing competitors
2) Determine how you can set your business apart (faster delivery times, better customer service, niche focus, etc.)
3) Perform a pricing analysis
4) Conduct a SWOT analysis
Develop a comprehensive business plan
1) Define your business mission, vision, and values
2) Set specific objectives (measurable)
3) Develop a detailed financial plan
4) Brainstorm marketing and sales strategies
5) Create an operations plan (delivery process, order fulfillment, customer service procedures, etc.)
6) Define the roles and responsibilities of key team members
Assess risks
1) Identify potential risks
2) Develop risk mitigation strategies
3) Develop contingency plans
Develop market entry strategies
1) Decide business size
2) Outline expansion plans
3) Decide on the niche(s) to target
Research legal and regulatory requirements
1) Research local regulations
2) Research industry-specific regulations
3) Ensure your business plan complies with legal requirements
Legal Structure
Next on, choose the right legal structure. Typical options include a sole proprietorship, partnership, Limited Liability Company (LLC), and corporation.
Delivery businesses follow the same pattern any other business does, so general requirements for each structure should suffice to help you get started. If stuck, look up delivery business inspiration.
Business Registration
Registering a delivery business also follows a set of pre-defined steps, as follows:
- Register your business name
- Obtain an Employer Identification Number (EIN)
- Obtain a local business license
- Register your business with the state (LLCs and corporations)
- Get a Tax Identification Number
- Ensure regulatory compliance
- Partnerships and LLCs: draft a partnership- or an operating agreement.
- Consider obtaining business insurance (liability insurance, commercial auto insurance, etc.)
- Obtain necessary permits and licenses
- Familiarize yourself (and comply with) employment and labor regulations
- Understand your tax obligations (federal and state)
If this sounds like too much from the get-go, seek legal and financial advice. Consult an attorney and accountant to learn the ropes.
Business Name and Branding
Here’s a simple tip: choose a memorable business name. It will stick with your customers and help you master branding strategies.
Select a name that is easy to remember (and pronounce!) that reflects your business vision. Ensure the name is unique and speaks to your target audience. E.g., a sophisticated name may suit a high-end food delivery service, but a courier service should convey speed and reliability.
As for branding, there are multiple options to consider (some of which are a must). Here are our top picks:
- Buy a matching domain name and create a website (professional design and easy navigation).
- Establish a social media presence and maintain active engagement with your audience.
- Design a suitable logo that represents your brand. Make it recognizable and visually appealing.
- Develop a consistent color palette and typography and use it in all branding materials.
- Invent a tagline or slogan that summarizes your business’ selling proposition.
- Define your brand's identity and values.
- Communicate your brand's story and mission.
Finances and Funding
Probably the most difficult question here is how to go about finances and funding. The good news is: that brainstorming pays off, and the bad — no matter how you look at it, finances aren’t limitless.
Start by creating a comprehensive budget. Outline ALL costs (including vehicle purchase/lease, licenses, insurance, marketing expenses, technology infrastructure, inventory or supplies…).
Decide your funding source. Typical options include personal savings, business loans, investors, and (of late) crowdfunding.
If you’re unsure which option may be the most optimal, develop financial projections to estimate the expected expenses, cash flow, and emergency fund.
Technology and Software
Don’t forget to calculate the costs of delivery management software and apps to streamline order processing and delivery tracking. Even an essential scheduling app may do wonders in the mess that delivery services may turn out to be at times, so plan ahead.
Typical tools delivery businesses may need (in addition to the abovementioned) include order processing workflow automation tools, order tracking and real-time updates tools, and inventory management tools.
Also, consider developing a mobile app for your delivery service. At the very least, it should feature order tracking, saved order history, and push notifications. Prioritize stellar UX design that will allow customers to easily browse the offer, select items, and complete the order.
Lastly, integrate customer support channels (live chat, email, phone number…).
As for the rest, think on the go. It’s getting started that’s the most challenging!
