The global pandemic has accelerated the growth of the e-commerce industry. According to a report, from February 2020 to July 2022, retail e-commerce sales increased by 67.9%, and the share of e-commerce sales as a proportion of total retail sales increased markedly from 2019 to 2022.
As a result, the demand for delivery services has skyrocketed, presenting an opportunity for entrepreneurs to enter this lucrative market.
The advantages of starting a delivery business are clear: with a population of over 14 million people, Ontario is the most populous province in Canada, providing a large customer base for delivery services.
Additionally, Ontario is home to major cities such as Toronto and Ottawa, which have high concentrations of businesses and consumers that rely on efficient delivery services.
Furthermore, Ontario has a strong transportation infrastructure, including highways, railways, airports, and ports, that can support the delivery of goods across the province and beyond.
However, starting a delivery business also comes with its challenges. Competition is fierce, with established players such as Canada Post, Purolator, and UPS dominating the market.
Moreover, the cost of fuel, insurance, and maintenance for delivery vehicles can be high, making it challenging for small businesses to operate profitably. Additionally, the pandemic has caused disruptions in the supply chain, leading to increased delivery times, higher costs, and decreased customer satisfaction.
Despite these challenges, starting a delivery business can be a rewarding experience for entrepreneurs who are willing to overcome obstacles and provide exceptional service to their customers.
By leveraging the latest technology and logistics solutions, delivering goods efficiently and cost-effectively, and providing excellent customer service, new delivery businesses can establish a foothold in this growing market and carve out a niche for themselves.
In this article, we will discuss the path towards a sustainable and profitable delivery business:
Step 1: Define Your Business Plan
Defining a business plan is crucial when starting a new delivery business. It provides clarity, resource allocation, funding opportunities, risk management, and effective communication to ensure the success of your business.
Here’s how you can create a business plan:
Define your business idea: Start by identifying the specific type of delivery service you want to offer. This could be anything from courier services to food delivery. Be clear about the type of delivery service, and who your target customers are.
Conduct market research:Research your market to understand the demand for your delivery service. Identify your competitors and their strengths and weaknesses. Look for opportunities to differentiate yourself and add value to your service.
Develop your business model: Determine how you will generate revenue, and how much you will charge for your services. Consider your operating costs, including vehicle maintenance, fuel costs, and insurance. Identify any strategic partnerships you may need to develop, such as with local restaurants or retailers.
Create a marketing plan: Develop a marketing plan to promote your delivery business. This could include online advertising, social media marketing, and partnerships with local businesses.
Develop a financial plan: Create a detailed financial plan that includes start-up costs, ongoing expenses, and revenue projections. Consider how you will finance your business, such as through a business loan, personal savings, or investors.
Identify your team: Identify the key roles and responsibilities you will need to fill to operate your delivery business. Determine whether you will hire employees or work with independent contractors.
Develop an operations plan: Develop an operations plan that outlines how your delivery service will operate on a day-to-day basis. This should include logistics, technology, and safety procedures.
Conduct a SWOT analysis: Conduct a SWOT analysis to identify the strengths, weaknesses, opportunities, and threats of your delivery business. This will help you understand how to mitigate risks and take advantage of opportunities.
Step 2: Register Your Business
Registering your business ensures that you are complying with laws and regulations in Ontario. It also provides legal protection for your business name, brand, and intellectual property.
Registering also limits your personal liability in case of any legal disputes or financial obligations.
Here’s how you can register your business:
Choose a Business Name: Choose a unique business name that is not already in use. The name must not infringe on any existing trademarks or be too similar to existing business names.
Decide on a Business Structure: Decide on the type of business structure you want to register your business as. You can choose from sole proprietorship, partnership, corporation, or cooperative.
Register your Business Name:Register your business name with the Ontario government. This involves conducting a business name search to ensure your name is available, and then registering your business name.
Register for an HST Number: If your business is expected to earn more than $30,000 in a year, you need to register for a Harmonized Sales Tax number with the Canada Revenue Agency.
Register for a Business Number: You will need to register for a Business Number (BN) with the Canada Revenue Agency.
Get Business Insurance: It is recommended to get business insurance to protect your business from any unforeseen events that may arise.
Step 3: Obtain Necessary Permits and Licenses
Obtaining necessary permits and licenses is essential when starting a new delivery business in Ontario.
Compliance with laws and regulations, avoidance of penalties and fines, protection of public health and safety, access to new markets and opportunities, and professionalism and credibility are some of the important reasons to ensure that your business has obtained the necessary permits and licenses.
Here’s how you can do so:
Determine the Permits and Licenses Required: The permits and licenses required for your delivery business will depend on the type of products you are delivering and the nature of your business. You can determine the permits by visiting the permit finder service.
Complete the Application Forms: Once you have identified the permits and licenses required for your delivery business, you will need to complete the relevant application forms. The application forms will require you to provide information about your business, your products, and your employees (if applicable).
Provide Supporting Documentation: You may need to provide supporting documentation along with your application forms, such as proof of insurance, proof of ownership or lease agreement for your delivery vehicle(s), and criminal background checks for your employees (if applicable).
Submit the Application Forms: Once you have completed the application forms and gathered all the necessary supporting documentation, you can submit your application forms and fees to the relevant government agencies. Some applications can be submitted online, while others may require you to submit them in person.
Wait for Approval: Once you have submitted your application forms, you will need to wait for approval from the government agencies. This can take several weeks or months, depending on the complexity of your application.
Obtain the Permits and Licenses: If your application is approved, you will be issued with the necessary permits and licenses to operate your delivery business in Ontario. Make sure to keep these permits and licenses up to date and renew them as required.
Step 4: Purchase or Lease Vehicles
Purchasing or leasing vehicles is essential for starting a new delivery business. Vehicles provide mobility, branding, capacity, cost savings, flexibility, and efficiency, all of which are crucial for the success of your business.
Here’s how you can purchase or lease vehicles:
Determine Your Vehicle Requirements: Determine the type and number of vehicles you need for your delivery business based on the products you will be delivering, the delivery routes, and the number of deliveries you expect to make.
Set a Budget: Set a budget for your vehicle purchase or lease. Consider the upfront costs, ongoing maintenance and repair costs, fuel costs, and insurance costs.
Research Your Options: Research the different types of vehicles available, such as vans, trucks, or cars, and compare their features and costs. You may also want to consider buying new or used vehicles or leasing them.
Contact Dealerships or Private Sellers: Contact dealerships or private sellers who sell the type of vehicles you need. Ask for quotes and negotiate the price if possible.
Test Drive the Vehicles: Test drive the vehicles to ensure they meet your requirements and are in good condition.
Secure Financing: If you plan to purchase the vehicles, secure financing from a lender or bank. You will need to provide information about your business and your credit history to obtain financing.
Register Your Vehicles: Once you have purchased or leased the vehicles, register them with the Ontario Ministry of Transportation. You will need to provide proof of ownership, insurance, and a safety certificate.
Obtain Commercial Vehicle Insurance: Obtain commercial vehicle insurance to protect your vehicles and your business from any accidents or damage.
Step 5: Hire and Train Drivers
Drivers are responsible for the safety of your delivery operations, your goods, and the public. Hiring qualified and experienced drivers, and providing them with adequate training, ensures that your deliveries are carried out safely and responsibly.
Determine Your Driver Requirements: Determine the number of drivers you need for your delivery business based on the delivery routes, number of deliveries, and peak delivery times.
Advertise the Job: Advertise the job opening for drivers on job boards, social media platforms, and other relevant channels. Be clear about the job requirements and the qualifications you are looking for.
Review Applications: Review the job applications and resumes of the candidates who have applied for the job. Shortlist the candidates who meet your requirements and invite them for an interview.
Interview Candidates:Conduct interviews with the shortlisted candidates to assess their skills, experience, and qualifications. Ask questions that will help you understand their driving record, knowledge of traffic laws, and experience driving in different weather conditions.
Check References and Conduct Background Checks: Check the references of the candidates and conduct background checks to ensure they have a clean driving record and no criminal history.
Provide Training: Once you have hired your drivers, provide them with training on safe driving practices, customer service, and the use of your delivery software and equipment. This training can be conducted in-house or outsourced to a professional training provider.
Ensure Compliance with Employment Standards: Ensure compliance with employment standards and regulations, including minimum wage laws, overtime laws, and health and safety regulations.
Step 6: Set Up Your Logistics and Technology
Setting up an efficient logistics and technology system can help you streamline your delivery operations, reduce lead times, and increase productivity. This results in faster, more reliable deliveries that meet or exceed customer expectations.
Follow steps below to set up logistics and technology for your new delivery business:
Determine Your Logistics Needs: Determine the type of logistics and technology you need for your delivery business based on the size of your operation, the delivery routes, and the number of deliveries you expect to make.
Choose a Delivery Management System: Choose a delivery management system that can help you manage your deliveries, track your vehicles, and communicate with your drivers and customers. There are several options available, including off-the-shelf software or custom-built solutions.
Set Up Your Delivery Management System: Once you have chosen your delivery management system, set it up and configure it to meet your business requirements. This may include setting up delivery zones, scheduling deliveries, and tracking driver performance.
Choose a Route Optimization Tool: Choose a route optimization tool that can help you plan the most efficient routes for your drivers, based on factors such as traffic, delivery windows, and driver availability.
Set Up Your Route Optimization Tool: Once you have chosen your route optimization tool, set it up and integrate it with your delivery management system. This will help you automate the process of planning and scheduling deliveries.
Choose a Vehicle Tracking System: Choose a vehicle tracking system that can help you track your vehicles in real-time, monitor driver behavior, and improve the safety of your drivers and vehicles.
Set Up Your Vehicle Tracking System: Once you have chosen your vehicle tracking system, set it up and configure it to meet your business requirements. This may include setting up geofencing, monitoring driver speed, and setting up alerts for vehicle maintenance.
Train Your Employees: Train your employees, including your drivers, on how to use your logistics and technology systems effectively. Provide them with the necessary training and support to ensure they can use the systems to their full potential.
Step 7: Create a Marketing Plan
Creating a marketing plan is essential when starting a new delivery business.
It helps to create awareness, gain a competitive advantage, build brand identity, engage customers, generate leads and sales, and measure the effectiveness of your marketing efforts.
Here’s how you can create an effective marketing plan:
Define Your Target Market:Determine your target market based on factors such as age, income, geographic location, and delivery needs. This will help you tailor your marketing messages and choose the most effective channels for reaching your audience.
Conduct Market Research: Conduct market research to understand your customers’ needs and preferences, as well as your competitors’ strengths and weaknesses. This will help you develop a unique value proposition and differentiate your business from the competition.
Develop Your Brand: Develop a brand identity that reflects your business values, mission, and unique selling proposition. This includes creating a brand name, logo, tagline, and brand messaging that resonates with your target market.
Choose Marketing Channels: Choose the most effective marketing channels for reaching your target market, such as social media, email marketing, direct mail, and paid advertising. Consider your budget, the demographics of your target market, and the reach and engagement of each channel.
Develop Your Marketing Message: Develop a clear and compelling marketing message that highlights the benefits of your delivery services, such as convenience, speed, and reliability. This message should be consistent across all marketing channels and reflect your brand values.
Set Marketing Goals and KPIs: Set marketing goals and key performance indicators (KPIs) that align with your business objectives, such as increasing sales, improving customer retention, or increasing brand awareness. This will help you measure the effectiveness of your marketing efforts and make data-driven decisions.
Create a Marketing Budget: Create a marketing budget that aligns with your business objectives and the channels you have chosen. Allocate your budget based on the channels that will generate the highest return on investment (ROI) and adjust your budget as needed based on your marketing goals and KPIs.
Execute and Monitor Your Marketing Plan: Execute your marketing plan and monitor its effectiveness using analytics tools and KPIs. Make data-driven decisions and adjust your plan as needed to optimize your marketing ROI and achieve your business objectives.
Conclusion:
With hard work, dedication, and a commitment to customer satisfaction, you can build a successful delivery business that meets the needs of your clients and contributes to the growth of the Ontario economy.
As you navigate the challenges and opportunities that come with starting a new business, don’t forget to stay connected with other entrepreneurs in your community and seek out advice from industry experts.
With a strong support system and a willingness to learn and adapt, you can overcome any obstacles and achieve your goals.
Above all, remember to stay focused on your vision and values as you build your delivery business. By providing reliable, efficient, and customer-focused services, you can make a positive impact in your community and establish a reputation as a trusted and valuable partner for businesses and individuals alike.
Maurice (Moe) Muise learned the ins-and-outs of government while an employee of the Government of Canada in Ottawa for 10 years. His current focus is helping small businesses in Ontario to identify and maximize government grants to grow their business.
Click here to learn more about Moe’s background and how he can help your business.
