How to start a courier company?
Want to work for yourself but not sure where to start? Let us help you get on the road sooner.
Starting a courier company is a relatively easy way to start working for yourself as it has low initial capital costs. Furthermore, as more and more consumers purchase products online this changing behaviour fuels industry growth. Currently, the Australian courier market is worth $4.2 billion annually with an anticipated growth rate of 2.5% per annum until 2021 . We want to make sure your new courier company is in the best shape it can be before you take it to the next level. To help you understand what you need to get your courier business started, we’ve prepared some tips which will help along this new journey.
If you’re also wondering what other types of businesses you could start, you can also check out our comprehensive list of business ideas.
Step One – Idea + Execution
We all know the old adage, ‘failing to plan is planning to fail’. To ensure your business has the best chance of success you need to make sure you have a solid business plan in place. This will help you makes decisions about what type of business you want to run. You should ask yourself a few questions before you get started, such as:
- Do you want to have your own business or do you want to sub-contract your services to a particular company or several companies?
- Would you prefer to buy an already established business?
- How much would you need to make per delivery to keep up with your running costs?
- What type of parcels will you deliver?
- Will you be transporting dangerous goods or hazardous materials?
Answering these questions, will assist you in making sure you are prepared from the very beginning.
Step Two – Choose a Structure
In Australia, small businesses can choose from a variety of structures to operate from. Each structure you choose has different legal and tax obligations. We recommend you seek professional legal advice about which structure is right for your business based on your own personal and financial circumstances. However, we have highlighted a few keys things for you which may assist in this decision.
If you want to operate as a Sole Trader , you will need to obtain an ABN. You can choose to register your business name or run the business under your name. Acting as a sole trader is a quick and efficient way to start operating as soon as possible. When operating as a Sole Trader your rate of tax is the individual tax rate. You should also be aware that if you make over $75,000 a year you will need to register for Goods and Services Tax (GST).
Another structure that you can operate your business under is a ‘partnership’. A partnership is where there are two or more persons carrying on business in common with a view to profit. A partnership is formed by a contractual agreement but does not need to be formal. A Partnership will need to register for an ABN and GST (if the company makes over $75,000). With this structure, the partners remain jointly and personally liable for debts of the business. Furthermore, before entering into a Partnership Agreement, you should ensure that all partners have a clear understanding of how they want the business to run, how profits and losses will be divided and exit provisions (if one of the parties wants to leave the partnership).
If you want to run your business as an proprietary company , this structure offers a number of advantages. To create a proprietary company, the company must have an ABN, company name, separate bank account, a company constitution and will need the name and company registered. In this type of structure, the director’s personal assets are protected from creditors except in rare circumstances. Although this is a more formal structure it offers you the ability to provide superannuation to employees and you may be eligible for tax reliefs which are not available to individuals or partnerships.
Bring your business into the future by registering a virtual office
Having a virtual office means you can securely store your documents and protect your privacy.
Step Three – Get insurance
Regardless of what structure you choose to run your business on it is important to make sure you are insured for the work you are performing. Even if your vehicle is insured already, you need to contact your current insurance company to make sure that you are covered for using the vehicle for business purposes.
As the type of service you are performing is a specialised industry you will need to check if you require any additional insurance to cover things such as theft of packages, breakages, as well as other mishaps that can happen while undertaking this work. Make sure you contact a few companies to get the best quotes and read the Product Disclosure Statements to ensure you purchase a product which meets your specific needs and requirements. Additionally, if you are thinking of subcontracting with a particular company, you should contact them and ask what their insurance requirements are as this could vary by which company you choose to work with.
Conclusion
Starting your own business is an exciting and nerve-wracking step. To ensure you are as successful as you can be in your new courier company you should understand the market and create a business plan that is adaptable to the changing business environment. At Law Path, we can help you get over the sticky business hurdles to make sure you are firing on all cylinders when you are ready to get started.
Need specialised advice regarding your new courier company? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our lawyer marketplace or any other legal needs.
Get a fixed-fee quote from Australia's largest lawyer marketplace.
