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How to Start a Contract Courier Business in Australia

Posted on Friday February 08, 2013, by | Categories Uncategorized

There are always Courier Company’s looking for Contract Drivers, but before you decide to approach one for a contract owner driver position, there are some important things you need to consider.

1.    Do you really want to be a courier?
If you have difficulty keeping your temper driving in heavy metropolitan traffic, then a courier job is not for you. Remember you will be in and out of your vehicle continuously, driving, stopping, driving again, most of the time in reasonably heavy traffic.
Provided you can handle the traffic and the bad habits of other drivers, are you prepared to work long hours to establish your business and to learn the dos and don’t of the courier trade. Like any business, inexperienced operators earn less than those more experienced.

2.    Make a business plan and compile a cash-flow projection.
Regardless of how much you like driving or the idea of being self-employed, you must remember you are going into business to make money, so you must work out if you will. You need to take into account any costs you will incur in your business. As with any business your lowest level of income will be when you start out. Therefore you will need to work out your private living cost as well.
If you can’t make money or your personal expenses will not be covered by your earnings, you should not be considering this career move.

3.    You will need a suitable and reliable vehicle.

Utes and Vans are the most common vehicles required, however, larger trucks, motor cycles, passenger cars and bicycles have their place within the industry

4.    Most new contract Couriers need to finance the purchase of their chosen vehicle.

Courier Finance for a new contract courier driver is often difficult to obtain. If the option is still available to you, you should consider organising your vehicle loan or finance, while still in your current employment.

If this option isn’t available then you will need to show your intention to succeed, this will include, a business plan, a cash-flow projection for the first 12 months, a statement of your current assets and liabilities, a letter of offer from a prospective Courier Company, proof of a good credit history etc. If your profile is weak a cash deposit or trade in will assist in your finance approval.

5.    Setting up your business.

You can handle the traffic, you are going to make money and you have a suitable vehicle, you now need to set up your business correctly.
a.    Are you going to be a sole trader, partnership or will you set up as a company?
Talk to an accountant, in most cases a company will be the way to go. In setting up a company you will be able to limit your liability for debt if everything goes wrong.

b.    Register for GST
The courier company you choose will require you to provide them with an ABN No. to allow the correct accounting for GST.
You are only required to register for GST if your gross income generated exceeds $75,000 per annum. Given the expenses you will incur in running your business, if you are going to be turning over less than $75,000 per annum, you aren’t going to be making enough money and shouldn’t be considering this career.

c.    Insure yourself.
Your only source of income will probably be your contract courier business. What will you do if you get sick or injure your-self. If you don’t have substantial cash reserves and even if you do, you should look into Income Protection Insurance.

6.    Choosing the Right Courier Company
You are now ready to start working, but your research isn’t finished yet. Picking the right company to work for can save you money in set up costs and more importantly generate you additional income on a regular basis.
a.    Do they have an income guarantee for your initial working period
b.    Is there clear evidence of work available
c.    What is their reputation in the industry
d.    What costs will you incur at start point, e.g. radios, uniforms etc.
e.    What contract guarantees will you receive?

The Owner Driver and Courier Industry had literally thousands of contractors making a good living, in a business that they really enjoy. Make sure this is the industry for you. If it is? we wish you a prosperous future.

Author Profile:

Phillip Gruppelaar worked as a Sales Tax Inspector and Administration Manager before entering the finance industry in 1988. While working in motor vehicle finance he earned the “AIM Insurance, NSW Business Manager of Year 2000” award. He then moved to home loans and general asset finance including sourcing equipment finance. In 2007, he became General Manager of an online asset financing company, building it to be one of Australia’s largest and most successful. In December 2011, he returned to his own management consultant business and focused on improving client relationships and staff training for another of Australia’s large online finance brokerage firms.

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