In the 1980s boom years, courier companies called all the shots. If a client wanted a parcel delivering the couriers would dictate when it arrived. These days, though, the business is more customer led. People expect good service and don't want to wait in all day for their packages. If you can't deliver when they want you to, they'll go elsewhere.
Thanks to this, there are opportunities available for smaller firms which can offer a more personal, local service. Although there are a lot of van couriers, this is something motorbike or cycle couriers are perfect for.
What is it?
At first glance, the courier industry looks easy to get into. It can appear that all you need is an office, a telephone and a set of wheels - either two or four. As a result, there are a lot of new businesses starting up each year. Inevitably, there is a lot more to making a success of it though: very few tend to start up a courier company from scratch. Most of those who own courier enterprises are former couriers themselves. Even a smallish motorbike or cycle company requires considerable effort and knowledge.
Phillip Stone of the Despatch Association, a courier trade organisation, estimates that only 30% of courier start-ups make it to years two and three. Narrow profit margins and tight cashflow are realities of the trade but attention to detail and a great service will make your reputation.
Cycle couriers can, by definition, only exist in an urban setting. Most cyclists cover around a two mile radius - otherwise the same day service and ability to deal with urgent jobs is lost. As courier firms operate in cities, jobs tend to be office related - lighter packages, urgent documents and so on.
Motorbike couriers are faster and can go further but, similarly, they would be more likely to do town or city based work. For long distance journeys it makes economic sense to do more than one job at once, for which a van is obviously better suited.
Prompt and courteous riders are a must as cycle couriers have had something of a reputation for unreliability in the past.
Unless you have unlimited money for a fleet of motor or push bikes, you will generally have people working with you on a self-employed basis, rather than employing them. They will be responsible for providing their own bikes and equipment, as well as storing and maintaining them.
A business can therefore be run from a home office on this basis, with a computer and mobile phones rather than a radio. These jobs tend to be with offices which you don’t have to deal with late into the night.
Although couriers are starting up all the time, this is a fluid industry. Firms merge and change, so if you find a niche within your area it is possible to work alongside them. No firm turns a job down but in a busy city there should be enough for everyone.
Cycle couriers are also a greener option with so many city centres plagued by traffic gridlock and plans for no-car zones to develop.
** Image by Nein Lives **
Who is it suited to?
Most people who start up in the courier business have a good knowledge of the industry, having learnt the industry first by riding or driving for other people. That's not to say you couldn't make it without this, but you will be up against people with more experience.
You need to have an understanding of the market and to know your own finances. It’s important to establish a relationship with your competitors because you may need to work with them to survive. You should never refuse work but if it's to somewhere you can't reach in time another firm can take it on for a percentage and you can return the favour at a future date. Networking will make this easier.
If you are starting out on a budget, you should be able to find ways of working with other kinds of partners which be mutually beneficial. For example, Cass Stainton of StreetBike.net found a number of innovative ways to fund her cycle courier business.
"For our waterproof clothing we went to GORE-TEX. We were provided with bright branded jackets at trade prices in exchange for advertising GORE-TEX on the jackets as the cyclists rode around."
It’s a good idea to be very sure of where you’ll get your customers from and have a plan of how you’re going to maintain and nurture that customer base. You need to be able to provide good customer service and relate well with both clients and riders on a day-today basis. Business and riders are not so plentiful that you can afford to be careless with relationships.
Word of mouth recommendation is very important in acquiring new clients and you need loyalty from your riders - they are the face of your business. Tact and being a good judge of character are therefore two very valuable qualities.
Research: Even if you think you are familiar with the industry, it’s very important to research the area you're looking to set up in. Some things are obvious. Starting up a cycle courier business in the middle of the countryside isn't a good idea because your customers will be too spread out to make it viable.
Looking at your competitors' prices will help you decide what you can afford to charge and whether it's possible to undercut them. It will also help you to see if there's a niche in your local area. You might be near an airport and focus your business there or, alternatively, you may focus your attention on delivering items such as foodstuffs.
Cyclists and motorcyclists are vulnerable on the roads but they can also be very visible. In creating your image you can therefore enhance both your riders’ safety and company advertising by bright, noticeable colours or logos.
"We designed our uniforms to be very noisy in orange, black and silver," says Cass at StreetBike. "They look impressive and bright, they draw attention and they're safe."
A recognisable image will also make it look like you are everywhere, even when your numbers are few on the road. It's important to establish your identity from the beginning as you can't afford to change you image every six months - strong brands are built over time.
The most viable way to recruit is to hire self-employed couriers. This means you won't have to fork out for a fleet of bikes or have the storage space to cope with them.
Finding good riders can be difficult. It is very difficult to source an insurance company that will insure motorcycle couriers aged under 25. Couriers Riverside Despatch in
Bob Doughty of City Bikes says: "Advertising in the local paper is the best way to start off. You can take on the people who are available and train them up to be the riders you want."
Once you have a trustworthy team, you'll most likely be able to rely on them for word of mouth recruitment. This is particularly the case with cycle couriers who inevitably form something of a community. "Treating your riders like a team rather than as just staff will bring its own rewards," says Cass of StreetBike.
It's also worth reiterating that your riders are the public face of your business. They're the ones who are out meeting your clients and who can break your business if they have one too many 'bad days'. Strong support at your end can help head off potential trouble.
It's possible to start up from a home office but don't forget - you may need more parking space than a residential street can provide. Riverside Despatch has a business park unit which might be beyond your means at the outset, but it will prevent uneasy relations with your neighbours after a number of motorbikes suddenly begin appearing on the street.
When you're on a budget - as most people are when starting up a business - advertising can be the biggest headache, but unfortunately it’s usually necessary. Making a simple but professional flyer and dropping it into local businesses is a simple and cost effective first step. Free online listings services are worth a look and Yellow Pages adverts are also good when you have the money to do it.
However, word of mouth is the most important thing. Phillip Stone of the Despatch Association warns: “In terms of business to business courier work, there’s no evidence that businesses find couriers through advertising and marketing: it’s mostly done through word of mouth. So you can spend a lot of money advertising in the Yellow Pages or on a website, but there’s no evidence that end users look at the websites when looking for a courier. They would look to somebody else in the same business as them and ask which courier company they use.”
If you deliver as promised, offer the best possible value and make sure your riders give exemplary service, people will recommend you. This will be the best start your business could possibly have.
Rules and regulations There are no specific laws attached to courier businesses you need to observe. However, there are insurance issues and you should keep to, and you must observe health and safety legislation and EC standards.
It is good practice to have goods in-transit insurance to take care of your clients’ property. You aren't obliged to do so but as with all insurance it will cost you if something goes wrong. There are specialist brokers that deal in insurance for couriers and light hauliers. For an established company with vans as well as bikes you might pay around £2000 a year for this. Obviously with the reduced carrying capacity of a motorbike or cycle, this would be significantly reduced.
Public and employers’ liability insurance for couriers and courier companies, as well as courier vehicle breakdown cover, is something you should look into unless your fleet is made up entirely of self-employed riders, who are responsible for their own insurance and relevant driving licence for motorbikes. All riders need to have EC standard clothes and helmets. Again you don't have to provide this but any logoed or coloured jackets you want them to wear should conform to the guidelines.
Although the temptation will be to work your riders as hard as possible to maximise your earnings, and the courier industry remains quite unregulated, riders should have a 15 minute break every 2 hours, and can only work a maximum of 10 hours.
The courier code details the main aspects of how to treat your couriers and how they should respond to you. As recommendations for the smooth running of your business they're worth a read.
Outgoings and income This is an industry where you're not buying in stock or making big wage pay-outs. Riders will get their percentage of the client's bill on a weekly basis whereas you will most likely invoice clients each month. As such it is not the size of outgoings that matter but the regularity. It's important you keep cashflow steady even when business isn't.
"There are weekly and seasonal booms in the courier industry," says Phillip Stone of the Despatch Association. "Fridays are busy as people send things before the weekend, and Mondays and Tuesdays are generally slow. Then July and August might be quiet with the run up to Christmas much busier." Therefore, you need to make sure you have the cash to keep the business going in the leaner times.
If you are starting small you might hope to start making significant profits after the third year of trading. This is a generalisation – in such a competitive industry you will need to work very hard to get to this point.
However, you shouldn’t let this put you off. If you are known on a local level as a reliable and friendly service then word of mouth will carry your fledgling business a long way.
Courier Code It's important to be aware of the responsibilities not only that you owe to your riders but also that they owe to you. This is vital, both for their safety and for the health of your business. The government has a courier code as part of its Think! road safety campaign. It's described as a code of practice for firms in the courier industry and those who ride and drive for them. This is a summary, although you should have knowledge of the whole code:
Responsibilities of courier firms:
Riders and their vehicles need to be properly licensed, insured and roadworthy
Create realistic delivery schedules to ensure your couriers don't work more than allowed working hours
Deliveries should not involve dangerous loads
Keep records and make regular inspections to ensure the requirements of the code are complied with
Make sure riders are properly trained and licensed for despatch operations
Provide clothing and equipment for riders which show the name of the company and are suitable for their purpose
Do not require riders to use a mobile phone on the move
Responsibilities of riders:
To have a full licence and MOT certificate (where applicable) and to be properly insured for courier work. Cyclists don't have to be insured but as a responsible road user, cover should be in place
Inexperienced riders should have further training before being engaged in courier work
Being alert and personally fit when riding is important
Never operate under the influence of drink or drugs or use a handheld mobile while driving
Cyclists should have lights for use at night, a bell and use a cycle helmet. All should comply with relevant standards
Cyclists must not cycle on the pavement or across pedestrian crossings
Top tips Having the most important facts and tricks of the trade at your finger tips might just make the difference to your business. So here, in no particular order, are 10 of the best:
Image is very important - bright, bold uniforms will make you known and give invaluable publicity
Know your competitors - both for their pricing and for the times you can help each other out
Find a niche - even in a crowded market there is always room for something new or a bit different
Chose your premises carefully - cyclists need to be in the centre of town and bikes need parking
Know your rights and responsibilities - as well as making sure your couriers know theirs
Treat your couriers well - they are the face of your business and will represent you well if given respect
Consider joining a trade association - this will give you support and important networking opportunities
Don't do empty journeys - travelling one way with a parcel and nothing back is wasted effort
Cashflow is key - seasonal trends in the industry mean you need to stay on top of cashflow
Word of mouth recommendation - make a good reputation for service your number one priority