US Air Force

The following is a step-by-step guide to setting up a courier business.

1. You must determine what type of a courier you want to be. Do you love cycling? You can have a messenger service in San Francisco. However, you could not do this in places such as Los Angeles where things are much more spread out.

2. You need to do some market research. This involves finding out what types of companies will want your services, and then refining your business ideas to meet their needs.

3. You need to come up with a name. It is very important that you have a unique, yet easy to remember name. Then, you need to get a web domain for it, and you will want a DBA. DBA stands for a Doing Business As license. This ensures that no other company in your area has this name. If you plan on expanding into a national company you may want to trademark your name, so no one else can use it in the entire nation.

4. Write a business plan. This takes a lot of time and effort. This will describe your business, explain your marketing strategies, analyze competition, contain development plans, have operation and management plans, explain your legal structure, and give financial projections.

5. Decide what type of legal structure you want.

* A sole proprietorship means you call the shots, you get off easy with the IRS, but if someone sues your company, you are in big trouble.

* In a partnership, two or more members group together to contribute their strengths and cover each other's weaknesses. This is a great system, but it only works if you know you will et along with your partners. It shares the same strengths and weaknesses as sole ownership.

* Incorporation is an angle that you probably will not want to go, so it is not included in this how-to.

6. Obtain permits and licensing.

* You are going to need to obtain a business license for the city that you will be based out of.

* If anything you sell is taxable, you will need to apply for a sales permit with your state.

7. You will need to obtain capital. This will be very hard considering the current economy, but it is still doable. You can try to get a loan, but this is probably the hardest option at this time. You can go to someone you know well that believes in you, and show them your business plan. Then you can ask for them to have an equity arrangement. This means that they will give you some startup money, and in return, you pay them a share of your profits.

8. You will need to get an office. This office, depending on the direction you want to go, will probably have to be customized for your business. Luckily, because of the current economy, there are many offices available. Try to find a good location, but DO NOT pay high rent just so you have a spot on Main Street.

9. Now you have laid the foundation for a great business. The only thing you can do is work hard, and persevere. The outcome of this adventure is up to you.

Getting Started 1. Decide what cities you want to service. It may seem far sighted to already plan out what cities you want to go to, but you may need to obtain licensing for multiple cities. It will definitely be beneficial to know what licensing you need before you get started.

2. You need to do some market research. This involves finding out what types of companies will want your services, and then refining your business ideas to meet their needs.

3. You need to come up with a name. It is very important that you have a unique, yet easy to remember name. Then, you need to get a web domain for it, and you will want a DBA. DBA stands for a Doing Business As license. This ensures that no other company in your area has this name. If you plan on expanding into a national company you may want to trademark your name, so no one else can use it in the entire nation.

4. Write a business plan. This takes a lot of time and effort. This will describe your business, explain your marketing strategies, analyze competition, contain development plans, have operation and management plans, explain your legal structure, have logistical information, and give financial projections.

5. Decide what type of legal structure you want.

* A sole proprietorship means you call the shots, you get off easy with the IRS, but if someone sues your company, you are in big trouble.

* In a partnership, two or more members group together to contribute their strengths and cover each other's weaknesses. This is a great system, but it only works if you know you will get along with your partners. Other than that, it shares the same strengths and weaknesses as sole ownership.

* Incorporation is an angle that you probably will not want to go at first, so it is not included in this how-to. However, if you first start off and find yourself struggling for cash, you may find it profitable to begin selling stock. If you choose to do this, you must be VERY careful, especially with today's economy. You will also have a duty to your shareholders, which complicates things even more. Finally, your company income will be taxed, along with your personal income, so you will get hit pretty hard with taxes.

6. Obtain permits and licensing.

* You are going to need to obtain a business license for the city that you will be based out of, and possibly cities that you will deliver to if you have any offices there.

* If anything you do is taxable, you will need to apply for a sales permit with your state.

7. You will need to obtain a lot of capital. This will be very hard considering the current economy, but it is still doable. You can try to get a loan, but this is probably the hardest option at this time. You can go to someone you know well that believes in you, and show them your business plan. Then you can ask for them to have an equity arrangement. This means that they will give you some startup money, and in return, you pay them a share of your profits.

8. You will need to get an office. This office, depending on the direction you want to go, will probably have to be customized for your business. Luckily, because of the current economy, there are many offices available. Try to find a good location, but DO NOT pay high rent just so you have a spot on Main Street.

Infrastructure This is probably the hardest part of starting a multi-city courier service. I will use an example of setting up a courier service between LA county and San Francisco county in California. I will be referring a lot to the Hub and Spoke paradigm, so if you don't know much about it, see the related links please. First, you need to determine where your central hub will be. I have picked Fresno because it is close to the 5 freeway (a major CA freeway) and it is a central location. Fresno may be a little bit farther east than necessary, but it would easily accommodate expansion to Sacramento. Our first city, Los Angeles has a thriving population of 11 million. Downtown LA will be the worst place to have a spoke. We will set up our LA hub on the outskirts of town in a cheap warehouse. This warehouse would need to have loading docks with the capabilities to cater to many trucks at once. Then you would need to devise a system to sort the packages, organize them, and quickly move them to the truck they will be leaving on. You would then want to have a few very small warehouses in convenient locations that packages would be transported to. At those locations, delivery trucks would take them to the appropriate locations. This system could also be easily implemented in San Francisco. It would use the same ideas, but just have different locations. Remember, have your hub away from the downtown area! It is too expensive and there is way too much traffic. Logistics I would like to start off by saying I have greatly simplified the logistics of this operation. You may even want to consider hiring a logistics expert to work for your company because logistics can get extremely complicated. Let's assume that our average packages is about 2 square foot. Let's pick an inter-hub trailer that has the dimensions 8 ft x 8 ft x 28 ft. This means we would ideally be able to have 896 boxes, but this is not the case. We will probably have about 500 boxes in each truck because of the different shapes of the boxes. Going from LA, it takes about 4 hours to get to Fresno with traffic. Let's assume it takes half an hour to unload a truck, and half an hour to load. That means we would need 10 trucks to have a truck leaving once an hour. The rate that packages would leave LA and arrive would be about 500 packages per hour. Going from San Francisco, it talks about 3.5 hours to get to Modesto. Assuming the same load and unload times, we would need 9 trucks to achieve a 500 package per hour rate. Let's start out with two spokes for each hub. That means that we need trucks that carry half as many packages. But, luckily the maximum drive time should be about 1 hour. So, per hub we need 4 trucks to accommodate the two hubs if the loading times are twice as fast as before because the loads are half the size. Finally, we need to deliver 250 packages every hour. If we can have smaller vans that deliver 50 packages an hour, with negligible load times. This means we need 5 delivery trucks trucks per spoke. So if everything goes perfectly, we need 20 delivery trucks, 8 small trucks, and 19 transportation trucks. We would also need 4 small spokes, major hubs, and one central hub. This would allow us to deliver 1000 packages per hour at maximum capacity. Calculating in transportation times, and considering a 16 hour operating day from 06:00 to 22:00, we could offer same day delivery until 9:00. If we factor in that the packages should already be at the hub or spoke they were just at, and transportation times, we should be able to deliver 16,000 packages in one day. Pretty big delivery numbers for a single line! However, this does not reflect the fact that you will seldom ever operate at full capacity, and the fact that you should probably start up much smaller and then make additions. Please remember this is a basic guide and does not substitute for a book on small business.