How to start a courier business in Australia

Starting a courier business is a huge undertaking and you’ll always have a lot to consider. Aside from general business tasks, let’s look at some questions you need to answer when you’re starting your new courier business.

Whether you’ll have your own run with one vehicle or manage a team of drivers, we’ll go through your initial considerations as well as how to optimise your delivery processes. 

Let’s take a look at how to start a courier business in Australia.

What are Courier Businesses?

A courier business delivers items (e.g. packages, documents, products, medical supplies) from one location to another. This can be from a business-to-business, business-to-consumer or directly from one person to another.

Starting a courier company or courier service business involves specific steps and considerations to ensure success, including developing a business plan, choosing the type of courier service to offer, and securing the necessary permits and licenses.

Part One – How to Start a Courier Business

Start with the basics

Conduct a market research to understand the demand for courier services in your target market. A web scraping API can automate the process of gathering market data from various online sources. List down your competitors, your pricing strategy, and budget (you’ll need this when acquiring vehicle and equipment for your delivery operations).

Also, familiarize yourself with relevant regulations governing courier services in Australia, such as transport regulations, workplace health and safety standards (and insurance coverage), and privacy laws.

As you’ll be operating within the country, you’ll need to apply for an Australian Business Number (ABN) as well.

Create a business plan

Decide on the way you want to conduct business by choosing a suitable legal structure. Are you operating a sole proprietorship or as a partnership or company?

If you’re independent, are you ready to bring on extra help during the busy holiday seasons or other peak periods? If you’re managing a team of drivers, you can consider a small business loan to manage the start-up costs like having company vehicles. It’s also crucial to open a business bank account to effectively manage your business finances and keep them separate from personal expenses.

The differences between these two business setups is:

• the volume of your deliveries

• the amount of money you need to charge per delivery (to cover operational costs)

• how much paperwork is required, including the necessity of obtaining a business license for legal operation in Australia.

If you’re managing a team of drivers, be sure to pay them in a way that benefits your business come tax time. This is usually fairly simple: have them register as an independent contractor. You can stay up to date with the requirements of employees vs. contractors via the ATO.

1. Will you have a niche, and if so what is it? 

Ask yourself: How does your new courier service differ from ones in the market? This will help you position your business ready to pitch for new clients as well as understand some potential considerations.

You might find more success if you pitch yourself as an industry specialist. For example, a refrigerated courier service or a food delivery service. Considering local businesses as potential customers when deciding on your niche can significantly enhance your service’s appeal, especially if you offer same-day local delivery.

It also helps you optimise your delivery processes to your chosen industry, which makes it easier to find new couriers if it comes time to expand your operations.

Be sure you consider the full implications and requirements of your industry. If you start a courier business specialising in medical supplies, you’ll also need to have (or get) experience handling medical equipment.

A quick note: even if you’re an independent contractor who works alone, it’s useful to outline a clear delivery process, so you can see where you need to optimise to be able to deliver faster, more efficiently and more profitably.

2. How will you train your drivers?

When you’ve started a courier business and you’re looking to bring on more drivers, post your job ad on online job boards (like Indeed.com or LinkedIn).

As you already understand exactly what kind of delivery service you offer, it will be easier to write a job ad that attracts your ideal candidates.

Here are some questions to ask:

• Will you provide the delivery vehicle, or will they?

• Do they need any special kind of driver’s license?

• Do they need experience in areas other than driving (remember the medical supplies as above, for example)?

• What are their hours likely to be?

• Are they required to work nights, weekends or holidays?

• What’s the expected salary or hourly rate?

You may not have answers for each question yet, but if you give as much detail as you can you’re more likely to find someone truly suited to your role.

Now it’s time to train them.

You can read about training a delivery driver, we wrote about it in depth.

In summary, it’s about mindset rather than technological capability. Your drivers need to adopt the mindset of managing their responsibilities as if they were running their own courier business. This includes basic things like: looking professional, clean vehicles, and handling packages and important documents with care.

And finally, once you’ve set up, there’s a larger question: how will you find clients when you start a courier business?

Let’s have a look at that.

3. Growing your client list

Beyond the mechanics of optimising your courier service, you need to be constantly growing and managing your client list so that you have recurring work.

If you answered ‘Yes’ to our question about having a niche, then you’ll find that helps you approach potential customers (we’ll talk more about that later).

But if you’re providing more general courier services, aka delivering all kinds of packages, identifying your ideal customer might not be as obvious.

That said, you can approach it this way: Think of something that your company has an advantage in. For example, you could be operating in a specific suburb, so your target market could be businesses or individuals within that area.

Strategies for growing a local courier business involve understanding and catering to the needs of local businesses, ensuring you can provide tailored delivery solutions that meet their specific requirements.

It can be a good start to contact a local business that already offers delivery, and find out if you can offer them a better (or more affordable) solution. Businesses like:

• Restaurants

• Grocery stores

• Florists

• Breweries

• Pharmacies

The good news is that courier businesses tend to have pretty local runs, so you’ll probably only need to scout a limited area.

You can also try joining online forums and networks for couriers, however, these tend to be extremely competitive and can have very large numbers of couriers pitching for a single service.

Part Two – Provide Successful Courier Services

Set up your fleet? Check. Hired your courier drivers? Check check. Know what type of delivery services you want to offer? Triple check. You’re just getting started, now it’s time to ensure you have all the right to build a successful courier business.

When it comes to running a fast-paced business, automation is your secret to success. With the help of a transport management system, you not only get to automate and organise workflows but you can also optimise your operations and achieve the goals below:

1. Route optimisation

Route optimisation is about creating the most efficient route possible for your drivers.

More efficient routes mean that you can: deliver more packages in a single day, reduce labour and fuel costs, and allow customers to get their packages sooner.

But for your dispatch team (or yourself), route optimisation can be complex and time consuming. It can take hours everyday.

To truly optimise a delivery route you need to factor in many things: 

• a driver’s workflow

• the freight they have onboard

• the order of their stops

• the travel time between stops

• the time taken to complete a pickup or delivery.

Implementing route planning software, such as TransVirtual, is crucial for optimizing delivery routes, easing managerial work, and staying updated with delivery status.

This technology ensures your operations are streamlined to ensure efficiency and profitability.

2. Route monitoring (or driver tracking)

You can be reassured that you’ve optimised your routes, but route planning is just the beginning of a dispatcher’s day. 

Route monitoring, or driver tracking, is essential if you manage a team of drivers. It allows you to follow your driver’s progress in real time, in the context of their whole schedule.

Once your trucks are on the road and routes are in progress, things can change quickly (very quickly!). You may need to add stops to a driver’s route or even switch jobs between drivers. Using a TMS purpose-built to handle these kinds of changes can help keep your drivers moving efficiently, avoiding time-consuming manual searching and re-routing.

Imagine you get a last-minute job that needs to be picked up immediately. Suddenly, your dispatch team needs to know which driver has enough time in their route and can handle another stop. Or they need to know which driver is closest to the parcel’s pick up and drop off locations.

Starting a courier business without a route monitoring tool is self limiting. It means you may not be able to make the best choices in the moment, which can slow entire days down (and cost you more money).

3. Order tracking

Once you start a courier business, you can save a lot of time on customer enquiries with automated receipt notifications, or order tracking.  

Those little SMS updates that tell you where your package is up to? People have come to expect them. If you’ve ever ordered a package from Amazon, for example, you’ve probably received detailed tracking information as your package makes the journey to you. 

Using TransVirtual means you can provide that same level of service, no matter the size of your business.

You’ll be able to send SMS messages or emails (or both) to the consumer when:

• Your driver has officially started the route (giving a general ETA)

• Your driver is closer to their stop (with a more precise ETA)

The consumer can also communicate directly with the driver, so if they need to leave instructions about their pet dog or a hard-to-find unit, they can.

All of this means that you or your team can focus on other important jobs. And, you can take on new deliveries without worrying about whether you can manage the load.

4. Proof of delivery

As a courier, the last part of your delivery operations is about safely dropping the right goods to the right doorway.

As you’ll know, an order can go missing for several reasons. It could be stolen from the delivery location, or hard to see where the driver left it safely, or the package could have mistakenly been left at the wrong location.

It’s important to get proof of delivery (POD) to verify exactly when and where your drivers left the package. 

TransVirtual lets you collect proof of delivery in two ways:

Photographic POD: When you deliver a package and there’s no one to sign for it, or a signature isn’t needed, the driver can simply take a photo of the package at the door and load it into their app (which also saves the GPS coordinates). This gives you and your customer and peace of mind.

Electronic Signature: Sometimes a signature is required. TransVirtual has a feature called sign on glass. It turns your driver’s phone or device into a signature portal which is then uploaded instantly into the app along with GPS coordinates.

POD helps your customers, too. The customer will get an email notification letting them know their delivery was successfully completed, along with a photo that shows exactly where the driver left their package.

So just to recap, there are four key ways to optimise your last-mile delivery processes when you start a courier business:

1. Optimising your routes

2. Monitoring those routes once in progress

3. Sending order updates to the consumer

4. Capturing proof of delivery

Using an automated Transportation Management System (TMS) like allows you to implement all four of those steps simply and seamlessly, freeing your time up to work on your business rather than in it.

Next steps…

There are so many other considerations when you start a courier business (things like business name, insurances, social media pages, and so on). But to make sure your new business is sustainable and profitable, you must optimise your delivery processes.

No matter your industry niche, or lack of, a successful courier business is one that can deliver goods to their final destination safely and quickly, while also making enough money to cover costs and pay everyone involved.

Using a TMS like TransVirtual means you will reduce costs while still making sure your clients (and their customers) are happy with your service.

If you’d like to learn more about how TransVirtual can help you start a courier business, get in touch today for a chat or you can book a free demo.

Become your own boss in the courier industry today!