Courier Business Start Up - The Franchise Approach
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To franchise or not to franchise, that is the question that every logistics and courier professional must answer at some point in his or her career or business development track. On one hand, ‘tis more noble to venture out with one’s own business plan, building networks of customers and serving niche requirements, or to be contractually aligned with a global company, and taking advantage of the client lists and international networks that thereby accompany membership in the club.

As global commerce continues to expand, so also does the parcel delivery industry, moving goods from one end of the world to another, frequently on the order of a click of the finger. For many courier services, franchising with a major player makes sense, enabling the courier to offer many of the same services as international freight forwarders or integrated delivery companies.

For independent businesses, there are typically two ways to participate in the global market. The first is to own a business which has its own fleet of vehicles and drivers on staff, and the owner is responsible for coordinating deliveries and pick-ups with end customers and with global freight forwarders. A courier franchise business is often smaller in scale, where the owner uses his or her own vehicle to make deliveries and pick-ups within a well-defined territory, and typically operates on behalf of or under the branding of a major carrier or integrated package delivery service.

Entering the courier or freight forwarding business usually requires a bit of capital up front, for purchasing a vehicle or vehicles. While these can be financed a number of different ways, this up-front capital requirement underscores the importance of cash management in the early stages of business development, and in ensuring that the market entry strategy is robust enough to ensure that a steady flow of customers can be built up quickly in the early days of business. Timing of the business opening also has a big impact on cash, since certain times of the year (particularly at the end of the calendar year) peak periods of business can ensure enough money in the back to get by the slower months to follow.

One of the most important factors for success, particularly for small parcel delivery businesses, is to be able to offer customers personal and friendly service. In most cases, customers have a choice to go with a name brand commercial shipping company. For customers who make a courier comparison, they will quickly see that some courier’s prices may be better or sometimes more expensive than the major carriers, but what truly distinguishes the small couriers’ businesses is the personal contact between the owner and the customers. A skilled people person as the owner of the business can give customers assurance that their packages are being treated with optimal care and attention.


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