Even with the decrease in the number of new businesses or companies, the operations of the existing ones still require a courier service for day to day operations. Every company has letters and parcels to send to their clients or other offices. In fact, there are some companies which not only provide services but also have to deliver their products to customers. Distribution services are always available but at the same time organizations need a courier company which is feasible, cheap and provides quality delivery services. According to IBEX research, the courier business can be a profitable business opportunity even in the current market situation.
Starting a Courier Company
The first step in starting a courier company is to decide the areas of operations. InPakistan, the first priority in this business is to target the 3 cities namelyIslamabad,LahoreandKarachi. Most or almost all of the companies start their business from these cities. They then move their operations to other areas like Faisalabad, Sialkot, Peshawar, Gujranwala etc.Karachihas more than 60% of business activities ofPakistan, therefore many small companies prefer to operate inKarachionly or in certain cases they start their trade from this city.
Similarly, it is preferred to start a courier company by providing services inIslamabad,LahoreandKarachi. You need to have offices in all these 3 cities. The first step is always to determine the location which is best for the business. The office space should be in an area which is highly populated with offices and other kind of businesses. This will provide you with business opportunities within the same vicinity. Apart from a work place, you need to have a team of delivery boys who can collect and deliver couriers to the specified locations. An efficient team of delivery boys is must for retaining the clients. On-time delivery and proper tracking is the back bone of this business. In a city likeIslamabadwhich is relatively smaller, a team of 3 delivery boys is enough in the initial stages of the business.
A marketing team or even a single person is also needed to handle the advertising and PR side of the business. This team is also responsible for getting the permanent clients. Banks are the main target of every courier company as their daily courier is greater than other companies.
If the investor has no experience of this business, it is also advised to hire an experienced manager. During the starting phase, the service should have 2 or 3 big permanent clients.
Every company uses few common ways of sending their courier to different cities. The delivery betweenIslamabadandLahoreand other areas inPunjabis by-road. Some companies have their own cars which travel betweenLahoreandIslamabadevery day. Initially, if the company does not own a car, it sends the courier through DAEWOO or sends their courier in other courier company’s cars by paying them, but for that good relations and understanding with other companies is a prerequisite. Once the courier has arrived fromIslamabadtoLahoreand vice versa, the delivery boys receive the parcels and then deliver to the specified locations. Paper is done at every instant to for the tracking of the parcels.
Centralized computer software is required in which parcel numbers and other related information is entered at the time of dispatch. This centralized system helps in keeping track of a parcel till it is received and delivered in the other city. The basic software does not cost more than Rs. 20,000.
Courier fromIslamabadtoKarachior other destinations is delivered by-air. Courier companies buy spaces in cargo planes and deliver parcels every day.
Initial Investment
If you want to open 3 offices, each inIslamabad,LahoreandKarachi; getting a small space on rent is a wise idea which will only cost Rs. 20,000 to Rs. 30,000 a month. You will also need delivery boys with bikes of their own; 3 employees forIslamabad, 4 forLahoreand around 6 forKarachi. The number of employees can be increased or decreased according to the business plan. The pay of each employee ranges from Rs. 5000 to Rs. 10,000 in addition to their fuel expenses and commission on each parcel.
An investor should have 1 year of expenses in his pocket before starting this business. The initial investment for offices is usually around Rs. 7 lac with addition to the pay of the 12 employees of one year which will approximately be Rs. 1 million.
A courier company can be started from Rs. 1 million to 2 million depending upon the business plan, number of employees and the office locations. This is the case when the investor is not going to get business for 1 year. If the company is constantly landing new business and is acquiring clients through the marketing team and also has companies in the client list, then the courier service can be initiated with Rs. 5 lac. This is only applicable if the company gets contracts of few big companies which will be helpful in covering the day to day expenses.
Profit Margins
Profit margins of a courier company are not fixed. A company can earn 10% profit from one client, 50% from the second client and even 100% from another one as the company decides per kilogram rate with their clients depending upon the number of parcels they dispatch and it varies from client to client. Some companies are charging Rs. 15 for a half kg parcel while some are charging more than Rs. 100 for the same parcel. Established companies like TCS have increased their rates many folds because of their brand name but the same service is being provided by other companies at cheap rates with a complete tracking system. On the whole, if properly managed, this business is very profitable but only on the condition that the marketing team of the company should maintain reliable contacts in the market.
Monthly income of the investor depends on the monthly business but after 6 months, an income of more than Rs. 50,000 to Rs. 1 lac can easily be earned every month. The bigger courier companies like Leopards who have been in the market for the past 20 years earn in millions per
