Start a Bicycle Delivery Business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. 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.
Check out our How to Start a Business page.
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 are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
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.
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.
STEP 2: Form a legal entity
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.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment 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.
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.
Learn more about General Liability Insurance.
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.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a Bicycle Delivery Business
Your website should have SEO-driven content, including a blog, that addresses your clients’ needs. Other bicycle delivery businesses have found success using social media and paid ads through online forums, television, print ads, and social media platforms.
How to keep customers coming back
Unlike many businesses, customer retention in this industry is very high. It’s important that your customers have a positive experience and that deliveries are made safely and on time. Incentivize your customer through rewards programs and customer referral programs.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Bicycle Delivery Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a Bicycle Delivery Business?
This industry offers new growth and expansion options regularly. To ensure long-term success, pay close attention to market trends, local and global events, and identify unique ways you can meet your clients’ evolving needs.
How and when to build a team
For long-term success, you will need to continually expand your service area and hire employees to service those regions. The business will need more drivers during peak times of the day and certain times of the year. Some companies employ their team direly, while others hire team members as independent contractors. Both options come with their own set of pros and cons.
Every team member should be professional, well-groomed, and reliable. Since they represent your company every time they put their uniform on, it’s also important that they are trained and understand the rules of the roadway.