How to start a courier business: a complete guide

There are many avenues you can take when starting your own business, and for many, running a courier service has become a popular choice.

But with so much competition, it can be difficult for new businesses to stand out, especially when faced with major names like Royal Mail, Evri, DPD and Yodel. 

To help you out, our step-by-step guide will cover the essential steps to run a successful courier business that’s both attractive to customers and delivers on quality service.

Step 1: Research

With how varied the courier industry is, setting up your own business can be challenging.

Chances are, if you just buy any old van and start delivering straight away, you’re likely to go out of business very quickly. Therefore, you’ll need to take the time to do your research before anything else.

To do this, you’ll need to conduct market research to gather and analyse information about the courier market and potential customers for your business. For this, you’ll need to:

1. Define your objectives

Ask yourself whether you’re focusing on local, national or international courier services. You’ll also need to consider whether you want to cater to businesses, individual customers, or both.

Additionally, think about what type of courier services you want to offer. For example:

• Next-day courier service: popular with consumers and offered by the majority of courier services, including big players.
• Same-day courier service: companies like Beelivery offer this service, aiming to arrive at customers’ doors in as little as 15 minutes.
• Onboard courier service: involves the transportation of important packages, confidential documentation or high-value items.
• Specialist courier service: this includes healthcare-related items, hazardous materials, temperature-controlled goods and fragile items.
• Eco courier service: typically operates a zero-emission fleet of pushbikes, cargo bikes and electric vans.

2. Identify your target audience

When determining your target market, you should think about:

• Demographics: age, gender, income level, etc.
• Business types: retailers, ecommerce businesses, pharmacies, etc.
• Pain points: speed, reliability, affordability, tracking services, etc.

3. Look into competitors

You should look at both direct and indirect competitors, including their pricing strategies, delivery speed, customer service and marketing strategies. You should also look at customer feedback (e.g. reviews) to spot any strengths and weaknesses.

4. Analyse market trends

This is an important step as a thorough market analysis will give you relevant insights into the most profitable market and business to invest in.

For example, is there a growing demand for same-day delivery, eco-friendly options or specialised courier services? Are there emerging technologies like AI-driven logistics or automated route optimisation?

To carry out your analysis, you should:

• Read industry reports and publications: sources like IBISWorld and Mordor Intelligence are reliable for industry insights. Make sure to look for trends in delivery speeds, preferred courier types (e.g. eco-friendly, contactless) and customer needs and demands.
• Monitor ecommerce growth: track platforms like Shopify, Amazon and eBay for changes in delivery expectations. Increasing trends like same-day delivery, subscription-based delivery services or local delivery hubs are worth looking into as well.
• Keep an eye on technology: look into how innovations like AI-powered route optimisation, drones, automated sorting systems and delivery tracking apps improve efficiency and customer satisfaction.
• Track consumer preferences: a few examples include real-time tracking, eco-friendly packaging and flexible delivery options. You should also use tools like Google Trends, Reddit or industry forums to spot any demands or emerging expectations.
• Analyse competitor strategies: are they focusing on faster delivery, or offering subscription models? Check their website for updates, as well as social media tactics and customer reviews for further insights.
• Keep up to date with regulatory changes: stay updated on rules around data security, parcel handling and environmental regulations that may impact operations. Local government websites and industry groups often public relevant updates.
• Use social listening tools: tools like Brandwatch, Hootsuite and Mention can track conversations about courier services, which can help you determine what customers like and dislike about current ones.

5. Conduct surveys and interviews

This is a primary market research method where you collect original data directly from your target audience or market. For this, you can reach out to potential clients (e.g. small businesses and online retailers) to understand their delivery needs.

6. Evaluate logistics and pricing

When looking into these aspects, you should consider:

Core operating costs

This includes fuel, vehicle maintenance, staff wages, licensing and permits, technology tools, packing materials and warehouse/storage space.

Variable costs

Look into current fuel prices. You’ll also need to factor in potential overtime or temporary staff during busy seasons.

Competitor pricing

Place orders with competitors to analyse their service quality, delivery times and fees. You should also look into their pricing models, such as whether they’re charging by distance, weight, urgency or a several factors.

Developing a flexible pricing strategy

This can include:

• Flat rates for predictable routes or smaller local deliveries.
• Distance-based rates for long-distance or rural deliveries.
• Weight-based pricing, which is common for ecommerce and retail clients.
• Subscription plans, where you offer bulk discounts or priority services for regular clients.
• On-demand premium rates for urgent or same-day deliveries.

Incorporating profit margins

When considering your profit margins, make sure to aim for a balance between affordability and profitability. You should also calculate your break-even point, which is the minimum number of deliveries needed to cover costs.

Case study: HIVED

Coming fourth place in the Startups 100 for 2025 Index, HIVED has caused a buzz in the courier industry - offering a 100% electric courier service while offering Uber-style live tracking and the ability to redirect upcoming parcels.

Read their story

Step 2: Planning

A business plan isn’t just the blueprint for your business – it’s the document that’s going to help you secure investment, and act as a guide through those rocky early months and years.

You don’t have to be a slave to the business plan – circumstances change, after all – but you can hit the ground running with much more confidence if you know where you’re going.

• The business owner: what’s your previous employment history? Any other business endeavours? What skills do you have that will lend themselves to managing a courier operation?
• The business: what differentiates your courier company from direct competitors in the courier industry?
• The service: details of how your courier service will operate, backed by its pricing strategy. How will it be scaled up?
• The market: what is the demand for a courier service in your area, and how many customers could your business potentially reach? Who is the typical customer of your business?
• Strengths, weaknesses, opportunities, and threats (SWOT): what makes your courier business better than other services? What makes it weaker? What are the main threats to your courier business, and where do the opportunities lie?
• The competition: thoroughly research the other directly competing courier businesses in your area to see how you compare, and how you could improve on their offering.
• Startup costs and sales forecast: provide details of all the costs of setting up your courier business, including equipment and premises, bills, and staff wages.

Step 3: Your vehicle

After thoroughly researching the industry and developing your business plan, the next step is to choose the modes of transportation your company will be using.

Vehicle choices will be influenced by the service you’ll be providing. For example, as a green courier, you won’t be purchasing high carbon-emitting vans or motorbikes.

There are plenty of options available, and to help, we’ve highlighted the best vehicles at your disposal.

Bicycles/Electric Bikes

If your courier business will be operating across large cities, bicycles are one of the fastest and most efficient ways to get around. They can follow routes that vans and motorbikes can’t and will help decrease delivery times, especially during peak travel hours.

They are also the cheapest transport method to run, as they rely on human movement rather than petrol. Other costs, including insurance, vehicle tax, and general maintenance, are also incredibly low or non-existent compared to other modes of transport. Not to mention they are a zero-emission delivery method, which is perfect for green couriering.

Motorcycles

While the motorbike can’t beat the bicycle for urban access, it’ll easily beat it for speed.

If your courier business is located in a bustling city and needs to cover distances fast, a motorbike is the most viable option. They are less affected than larger vehicles by traffic, including traffic jams and queues caused by traffic lights.

They also have the advantage of being able to carry larger packages than most bicycles and can be parked pretty much anywhere (within reason).

In terms of cost, it’s usually cheaper to run a motorbike than a car or van, with average petrol costs of £558 per year for the typical rider, compared to £1,051 spent per year to fuel a petrol car.

Electric Mopeds

Electric mopeds have gained popularity in recent years, largely due to their cheap running costs and environmental credentials. According to British Dealer News, there were 357 moped registrations in January 2024 – a 5.3% increase compared to the previous year.

Electric mopeds are a cost-effective, eco-conscious alternative to petrol engine mopeds and motorcycles, running off a removable battery that can be charged from any standard socket.

This type of vehicle would be ideal for a green courier business, as they produce no noise or air pollution. Another benefit is minimal maintenance costs, as, unlike motorcycles, e-mopeds require no oil, clutch cables, filters, or fluids to check.

Keep in mind that the batteries require charging every 100 miles or so, so long-distance deliveries won’t be possible.

Drones

Drone delivery services aren’t too common in the UK just yet. However, Royal Mail was the first parcel carrier to introduce this in December 2020 and has plans to extend its services until at least February 2026.

Meanwhile, Amazon has also been trialling its own drone delivery services and has chosen Darlington as the first location for this.

Being at the forefront of this advanced technology would certainly propel your courier company into the big leagues, so it could be a good idea to get ahead of the game and start investing in prototyping a drone delivery service.

Vans

Vans are the most popular and widely used transportation method in the courier industry. Out of the 10,141 businesses courier businesses operating in the UK, you can guarantee that the majority of them use vans to move goods from A to B.

They are incredibly effective courier vehicles for several reasons. Firstly, the large size means there is plenty of space to store parcels, big or small. Instead of drivers making multiple trips, courier services can reduce delivery times by delegating multiple jobs in the same area to one vehicle.

Vans are also versatile in that they can be transformed into specialist delivery vehicles, such as installing refrigeration units for temperature control. They can travel long distances, and the engines are powerful and specifically designed for carrying heavy loads.

For green couriers, electric and hydrogen vans are a great way to deliver on a larger scale without harming the environment.

Although vans are an efficient vehicle option, they are expensive to run and maintain. You need to be aware of the costs involved before buying one, which we’ve summarised below:

• Average Price of a Used Van = £7,410-£10,133
• Commercial Van Insurance = £1,000-£1,500 (per year)
• Average MOT cost = £58.60 (per year)
• Van Vehicle Tax = Varies (find out more here)

Pricing correct as of March 2025.

Think carefully about a vehicle’s compatibility with the service you want to provide. You could have a fleet of different vehicles to suit the needs of your business, though this will result in significantly higher startup and ongoing costs.

Determining your target market when researching your business plan will help you establish what kind of need there is in your area and what kind of vehicle you need, which is why you should always do research and produce a business plan before purchasing any vehicles.

Step 4: Business costs

You need to be fully prepared before heading out on the road, and having a shiny new van and a business plan under your belt isn’t quite enough to succeed in the courier industry.

The next step is to purchase all the necessary equipment and services required to ensure your business operates efficiently. Also, remember to factor these outgoings into your budget.

We’ve listed a few important items below.

Courier equipment

Once you’ve purchased your vehicle, you should suit up with these gadgets to maximise delivery efficiency.

• Handlebar phone mount: a waterproof handlebar phone mount will enable you to view your phone maps or GPS whilst driving or cycling.
• Reflective, Hi-Vis clothing: essential to keep you and your employees safe, especially when delivering goods at night or in low visibility conditions.
• Waterproof messenger bag: a robust and waterproof messenger bag is a must-have to safely transport packages and documents without fear of them getting ruined by the rain.
• Pannier rack and waterproof panniers: another must-have piece of equipment, ideal if delivering larger items or multiple packages.
• A helmet: essential for personal safety if you’re delivering via bicycle or motorcycle.
• A bike lock: make sure to purchase an approved ‘sold secure’ lock with at least a bronze rating, and if you are operating in high crime areas, you should be investing in a gold-rated lock.

Courier uniform

Whether you’re a self-employed courier or you operate a fleet, having a uniform shows professionalism, and creates a recognisable brand that could help you find more business. This could be as simple as a printed t-shirt, or a full, branded uniform.

Specialist handling and storage equipment

If you are going to be offering specialist courier services, then you, your vehicles, and your couriers need to be fully equipped with the correct tools for the job. Examples include safety gloves for handling hazardous materials and refrigerated vans for temperature-controlled deliveries.

Heavy lifting equipment

If your business will be transporting heavy goods, it’s important to provide lifting trolleys and ramps.

Business insurance

Although costly, business insurance is fundamental in ensuring you are covered for any unexpected eventualities. These can include accidental vehicle damage, theft of company property, and workplace injuries, all of which occur across the courier industry.

Goods-in-transit insurance is a must if you want to protect any goods from damage or theft whilst on the move.

Additionally, courier van insurance is a specialist type of cover that protects your van for business use, and it’s also a legal requirement. Be aware that you will need to purchase hauliers’ insurance if driving large goods vehicles (such as lorries) over long journeys.

Hiring couriers

As your business becomes more successful, your workforce will expand.

Therefore, you need to be aware of the costs involved in hiring drivers. Typically, a lot of couriers are self-employed and will work for multiple courier companies at the same time. However, if you hire part-time or full-time employees, you’ll have to pay at least the National Minimum Wage.

You’ll want to attract experienced, professional, and hard-working couriers to work for you, as this is a key element of building a positive company reputation and providing a high level of customer service. To do this, consider offering a competitive salary, or certain company benefits that aren’t offered by your competitors.

When starting the hiring process, make sure couriers have the following skills:

• Excellent driving or cycling ability
• Road safety awareness and caution
• Time-keeping
• Route planning skills
• Customer service skills

Vehicle tracking

Quality vehicle tracking software is the foundation of a slick and customer-centric courier business.

Vehicle tracking software allows you to track your fleet so you can monitor everything, including routes, speed, arrival times and even making sure drivers are taking adequate breaks.

Using vehicle tracking software will have many benefits for your courier business. It can:

• Improve costs: monitoring routes and fuel usage is valuable data that can help you to create efficiencies in how your fleet is used, making savings in the process.
• Improve customer satisfaction: knowing where your drivers are will enable you to give customers up-to-date information on expected delivery times, so they can arrange their day around it.
• Save on insurance: having business vehicle tracking software in place makes you eligible for insurance discounts.
• Improve safety: monitoring drivers allows you to monitor unsafe behaviour and stamp out bad habits or practices.

We’ve also produced a comparison table of the top vehicle tracking software providers below:

Step 5: Your customers

So, you are now fully equipped and prepared to begin offering the best possible courier services to your customers. But first, you need to find them.

This may sound a little challenging at first, so we’ve listed some of our top tips on attracting your ideal customer base.

Remember your target market

For example, if you are offering medical courier services to deliver prescription medications, your clients will be independent pharmacies and care homes, so you’ll be marketing to those types of businesses.

Focus on the quality of your customers

You’ll want reliable customers who will regularly repeat deliveries. Onboarding SMEs who have an immediate and ongoing need for your service is the best way to ensure a sustainable income, as well as maintaining a high level of service and keeping your customers satisfied.

Underwood, of Circuit, says: “Make sure you focus on unit economics; you need to know how you can make a profit on just a single customer before you start scaling.”

Target small, local businesses

Local businesses are a great place to start, especially ones that rely on a high volume of orders to be delivered regularly. If they already have a courier delivery partner, make them a better (and more affordable) offer.

Charge reasonably for your service

Check the local market rates for courier services in your area, and consider offering better value than your competitors to attract clients. You can start lower than the going rate, then once you’ve built up a loyal customer base, increase your prices. Not hugely though, or you’ll risk a backlash.

Invest in outreach media and marketing

For example, same-day delivery service Beelivery, which delivers its customers groceries in as little as fifteen minutes, has been focusing heavily on outreach marketing to promote the service.

Find delivery jobs

Shiply lets you compete with other couriers for contracts, and thousands of delivery jobs are posted on the website daily for you to choose from.

Conclusion

Starting a courier business is no walk (or drive) in the park. After all, the UK currently has 10,141 businesses in the courier activities industry. The competition is tough, and some services – like next-day delivery – are already packed with players.

So, to stand out, focus on finding a niche. For example, offering temperature-controlled deliveries using eco-friendly electric or hydrogen vans. Hiring experienced, professional drivers can also boost your reliability and reputation.

Most importantly, take time to understand your target customers and tailor your services to meet their needs. With the right planning and smart decisions, your courier business is sure to deliver success.