How to Start a Non CDL Business Delivery Service
Delivery of goods is a big business, even more now than ever with the ease and convenience of online shopping.
Large and small companies alike are looking for reliable drivers to deliver to their customers.
Starting a non-commercial driver’s license delivery service (CDL) means that you can provide a delivery service for these businesses looking for a middle man to get their product to their consumers.
Many people think you need a commercial driver’s license to run a delivery service, but this is only true if you plan on operating big rigs, heavy vehicles or placarded hazardous material vehicles for commercial purposes.
But if you just want to deliver packages, inventory and other goods, running a non-CDL business is a great model!
While you may be limited on the size of deliveries you can make, you can still succeed because there are hundreds if not thousands of businesses in your area that you can provide a delivery service for.
If you’ve been wanting to break out of a mundane job and be your own boss, this could be the right business model for you.
You will be glad to know that starting a non-CDL business only requires a few initial steps and is more simple than you may think.
Establish a Niche
The first thing you will want to do is establish your niche.
Perhaps you will be a courier for architecture firms and deliver plans from the firm to contractors or developers.
Or maybe you want to provide a furniture delivery service or medial transport carriers that delivers tests and results from collection facilities to labs.
Relocation, moving and residential hauling are also popular niches that are always in demand.
Other options include Amazon delivery through Amazon Flex.
If you aren’t sure where to begin, look at your network and see if there is a need that you can fill.
If you can’t identify a need in your network, then choose one based on where you live and what types of businesses you could market to as potential customers.
Choosing a niche will help you narrow your marketing and advertising efforts and build a strong reputation within that niche.
You can then branch out into other delivery areas or services.
Choose a Business Name
Choose a business name that is easy to spell and easy to remember so that people can easily refer you by word of mouth.
You will want to check if the business name you want is available.
You can check name availability at your local Secretary of State website.
There are some business naming resources that you can use like Domain Name Search from MyCompany Works.
This helps you identify available domain names before you register which can be helpful in determining general name availability.
You are not required to reserve a name before starting your business, but if you are afraid someone else might use the name, then you may want to consider doing a name reservation.
They cost around $25, depending on your state, and they give you name exclusivity for 30 – 90 days so that you have time to form your business without worrying about the name you’ve already chosen.
You can also choose to trademark your business name so that someone else doesn’t use it – learn more about that here.
Register Your Business
Before getting your first customers, you will need to legally form your business.
Once you have a name, you’ll need to decide on a business structure.
There are several business structures to choose from including sole proprietorship, limited liability company (LLC), Corporation, etc.
You will want to consult an attorney if you are not sure which business structure to choose.
You can also use a formation service to help you setup your business.
Some of them are free + State Fee!
Many small business owners choose an LLC (limited liability company) because it provides limited liability protection to you as the owner and it benefits from pass-through taxation.
It provides a flexible business structure and is fairly simple to set up.
Why business owners choose an LLC:
- Business owners are not liable for the company’s debts and can choose their own management structure.
- They qualify for pass-through taxation – meaning that profits are only taxed once.
For example, if your LLC declares bankruptcy or is sued, your personal assets such as your vehicle, personal bank accounts, and house are safe.
Each business structure has its own advantages and features but for the majority of small businesses, an LLC is going to be the best choice.
LLC’s are simple, flexible and protect your personal assets.
Here is a quick checklist of things you need to complete to form your business:
- Select a business entity type: we recommend an LLC.
- Obtain an EIN (Employer Identification Number) from the IRS – once your application is complete, you will receive an EIN instantly.
- Register your business locally in the State in which you will be conducting business. This is done with the Secretary of State.
- Obtain any business licenses or permits required in your State to operate a non-CDL delivery service. These can also be found at your local Secretary of State website.
In order to get the goods to their destination, you will need to have a secure method of transportation.
Your vehicle will depend on the type of cargo you plan on transporting.
If you are just transporting small documents, plans, test results, etc, you can most likely use a smaller vehicle.
If you are going to be delivering a variety of cargo, choosing a vehicle that will maximize your space is going to be important.
Many cargo vans have a spacious area in the back and box trucks are great for larger services like moving and furniture delivery.
Delivery vehicles can range in price from $15,000 – $50,000 or more, and if you don’t already have a vehicle, this is going to be your biggest startup expense.
When you are starting out, you may need to obtain a small business loan to secure a delivery vehicle.
We recommend perhaps choosing a used model when starting out and you can upgrade to a newer model once your business picks up.
You will also want to think about any additional startup equipment that you will need such as dollies, moving blankets, boxes, etc.
Other than your general state-required liability insurance on your vehicle, there aren’t really any additional insurance requirements for non-CDL drivers.
However, we strongly recommend that you obtain commercial liability insurance that not only covers you, but also covers the cargo you transport.
If there should be an accident and the cargo gets damaged, the commercial liability insurance will cover everything.
Customers will also feel more confident in letting you deliver their cargo if they know that you have the additional coverage provided by commercial liability insurance.
Marketing and Advertising
Your business is setup, you have your delivery vehicle ready and are covered by excellent insurance, so what now?
It is time to market and get your name out there!
A great way to get your name out there is to wrap your vehicle in your business name, contact information and logo so that when you drive around town people will see your information.
You can also advertise on places like Craigslist and GoShare or simply go door to door and leave your contact information and rates.
Meet with local furniture store owners, consignment shops, supply stores, and others that you know need delivery drivers.
Once you secure your first customers, make sure you deliver the best service possible and deliver on your promises.
This will lead to repeat customers and more word of mouth referrals.