How to Start a Bicycle Delivery Business

Start a Bicycle Delivery Business by following these 10 steps:

1. Plan your Bicycle Delivery Business
2. Form your Bicycle Delivery Business into a Legal Entity
3. Register your Bicycle Delivery Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Bicycle Delivery Business
6. Get the Necessary Permits & Licenses for your Bicycle Delivery Business
7. Get Bicycle Delivery Business Insurance
8. Define your Bicycle Delivery Business Brand
9. Create your Bicycle Delivery Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your Bicycle Delivery Business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

What are the costs involved in opening a Bicycle Delivery Business?

Startup costs for a bicycle delivery service are minimal. Your most important business tools are your bike and a cell phone. While you could get by on just those two things, you will need to make further investments to build a sustainable business. Reports indicate a minimum startup budget of $2,100, with an average budget of $22,768. Common startup costs include:

• Office - Many business owners elect to operate out of a home office, rather than paying thousands of dollars in rent and utilities each month.
• Business registration, permits, and licensing - Depending on your region, these cost $50 to $1,500.
• Business insurance - Work with an agent to determine your business insurance needs. Policy premiums range from $500 to $1,200 annually.
• Computer and business management software - While it may seem like a frivolous expense, investing in business software that automates your processes saves both time and money.
• Employee expenses - Employee expenses include more than payroll. It’s important that your employees look professional and are easy to identify. Uniforms with the company logo cost up to $500 but are a worthy investment.
• Website and advertising - Your website should be user-friendly and contain SEO-driven content to ensure visitors understand the services you offer.

To start, you’ll need at least one bike and one reliable vehicle. When you start to build your team, you’ll need to decide if you want to furnish each employee with a bike or if they will use their own. As you start to develop a team, you’ll need to invest in a dispatch system. This will keep the lines of communication open and ensure everyone’s time is used appropriately.

What are the ongoing expenses for a Bicycle Delivery Business?

If your business runs out of your home, your ongoing expenses will be fairly minimal. Payroll/independent contractor fees will be the largest line on your budget. After that, your standard business expenses will include insurance, marketing, and website maintenance costs.

Who is the target market?

The target market for this business venture ranges from local food restaurants to professional businesses. The professional businesses you serve should include law firms and accountants.

How does a Bicycle Delivery Business make money?

Bicycle delivery businesses charge their customers a fee for each delivery made. Depending on what goods your business model delivers, some customers may offer a tip for prompt delivery.

How much can you charge customers?

When setting your fee schedule, consider your business expenses, time, and delivery details. Most couriers charge a flat rate, with an additional mileage fee for longer deliveries. After-hours, rush orders, and waiting fees should also be assessed.

How much profit can a Bicycle Delivery Business make?

Profits are directly tied to the number of deliveries made and your overhead expenses. The owner of Dashed, now known as GrubHub, started out as a single delivery driver. Before selling, the business expanded to service over 500 restaurants in five cities and was valued at over $4.6 million.

How can you make your business more profitable?

To maximize profits, consider offering both bicycle and fuel-efficient car delivery. This will enable you to service more areas and deliver packages that are too heavy or bulky for bike delivery.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Bicycle Delivery Business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history, which can be useful to raise money later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

Is becoming your own boss a dream of yours? Do you have a flexible schedule that would allow you to serve your customers at varying times of the day? Do you thrive on human interaction yet also enjoy working alone? If so, launching a bicycle delivery service could be the perfect business venture.

What happens during a typical day at a Bicycle Delivery Business?

As a bicycle delivery business owner, you will spend your days taking customer orders, picking up packages from clients, and delivering them to their intended destinations. Depending on the delivered item, many clients require a signature as evidence of receipt.

As the business starts to gain traction, you may opt to remove yourself as a driver and take on a more administrative role. In this role, you will be charged with taking orders, assigning orders to drivers based on location and delivery time needs, invoicing and accepting payments, and marketing.

What are some skills and experiences that will help you build a successful Bicycle Delivery Business?

Launching this type of business requires some degree of physical fitness, as you will be transporting items via bicycle. Business owners and their staff must also be detail-oriented, reliable, and mindful of time constraints and scheduling. Your job will often entail delivering confidential documents, so discretion is of the utmost importance.

Customer service and interpersonal skills are also important for this industry. Your clients may change the details of an order many times without warning. You and your staff must be patient and flexible, putting the clients’ needs above all else.

While you will advertise as a bicycle delivery service, it’s important that you are able to serve all your clients’ needs. Therefore, it is a good idea to have an automobile and a valid driver’s license for larger package deliveries.

What is the growth potential for a Bicycle Delivery Business?

Demand for this type of service is high and recession-proof, making it the ideal business venture for many entrepreneurs. There are, however, some oversaturated niches. If your goal is to build a scalable business that reaches beyond your region, research what delivery service niches are lacking and make your mark there.