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.