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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on February 26, 2022
Investment range
$4,250 - $9,600
Revenue potential
$80,000 - $470,000 p.a.
Time to build
1 – 3 months
Profit potential
$55,000 - $140,000 p.a.
Industry trend
Growing
Commitment
Flexible
These are the critical aspects you should evaluate when launching your non-CDL delivery service:
First of all, let’s clarify what being a non-CDL driver means. Driving vehicles with less than an 8,000-lb payload, such as mid-sized U-Hauls and UPS trucks, does not require a CDL. So there are a lot of possible truck sizes to choose from for your new business, including a box truck.
Before you jump all the way, it’s a good idea to weigh the benefits and disadvantages of this line of work.
Trends in the non-CDL business delivery service industry include:
Challenges in the non-CDL business delivery service industry include:
Startup costs for a non-CDL business delivery service range from $4,200 to $9,500. The largest expense is for a down payment on a van or truck. If you already have a sufficient vehicle, you can start for about $2,500.
You’ll need a handful of items to successfully launch your non-CDL business delivery service, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Down payment on a van or truck | $2,500 - $5,000 | $3,750 |
| Dollies, straps | $200 - $500 | $350 |
| Total | $4,250 - $9,600 | $6,925 |
Your prices will vary based on the size of the load as well as the distance and could range from $100 to $200. Longer distance deliveries are usually based on mileage and can be $1.50 – $2.00 per mile. These calculations will assume an average delivery price of $150. Your profit margin should be about 70% after fuel costs.
In your first year or two, you could work from home and deliver 10 loads per week, bringing in nearly $80,000 in annual revenue. This would mean almost $55,000 in profit, assuming that 70% margin. As your business gains traction, deliveries could climb to 60 per week. At this stage, you’d hire delivery drivers, reducing your margin to around 30%. With annual revenue of nearly $470,000, you’d make a tidy profit of $140,000.
There are a few barriers to entry for a non-CDL delivery service. Your biggest challenges will be:
Now that you know what’s involved in starting a non-CDL business delivery service, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research non-CDL delivery services in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a local medical supply delivery service.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as retail deliveries.
This could jumpstart your word-of-mouth marketing and attract clients right away.
Your services will be making deliveries for businesses. You just need to determine if you want to work with all businesses or specialize in a particular type of business. You’ll also need to decide if you want to just deliver locally or do interstate loads.
Another option is to be an Amazon delivery service partner.
Your prices will vary greatly based on the size of the load and the distance. You should estimate your time for each delivery route and charge about $40 to $45 per hour. Your main cost will be fuel, so you should aim for a profit margin of about 70%.
For long-distance loads, prices are generally based on mileage, at a rate of $1.50 to $2.00 per mile.
Note that you should use delivery route optimization, making your delivery route as efficient as possible, to maximize deliveries and minimize fuel costs.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will depend on the type of deliveries you choose to do. In any case, it will be small business owners of some kind, who you can find on LinkedIn, Google Maps and Yelp!
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to non-CDL business delivery services.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your non-CDL business delivery service will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a non-CDL business delivery service.
Starting a non-CDL business delivery service requires obtaining a number of licenses and permits from local, state, and federal governments.
You’ll need a Department of Transportation number and a Motor Carrier Authority number, both of which you can get by registering with the Federal Motor Carrier Safety Administration (FMCSA). You’ll also need to complete a unified carrier’s registration, and if you plan to drive to other states or Canada, an International Registration Plan tag and an International Fuel Tax Agreement decal.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your non-CDL business delivery service as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of
your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Work Wave, NetworkON, or GOTRACK, to manage your deliveries, routes, dispatching, and invoicing.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your business delivery service meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your non-CDL business delivery service could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a non-CDL business delivery service, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in non-CDL business delivery for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in business delivery services. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a non-CDL business delivery service include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
If you don’t want the hassle of going through the process to be a CDL driver, starting a non-CDL delivery service offers a world of opportunity. It takes an investment to get a vehicle, but you can get in on a $130 billion industry and make good money. You can run your business from home, and someday expand your business to have a fleet of trucks and a whole delivery network.
Now that you’ve got some business savvy, it’s time to start driving your way to entrepreneurial success!
Yes, it can be very profitable. Delivery services for businesses are in high demand right now, and you can have a nice payday with each delivery you make.
Your target market will be business owners, so you should try to connect with and market to them on LinkedIn. You should also call on them directly to offer your services. You can find local businesses on Google or Yelp!
To differentiate your non-CDL delivery service, you can focus on providing exceptional customer service, implementing efficient and transparent tracking systems, offering specialized delivery options (such as same-day or eco-friendly deliveries), or targeting specific niche markets.
Yes, you can start a non-CDL delivery service on the side as long as you comply with local regulations, obtain any necessary licenses or permits, and manage your time effectively to ensure both your main job and the delivery service receive adequate attention.
The types of vehicles necessary for a non-CDL delivery service can include vans, SUVs, pickup trucks, or even bicycles, depending on the scale of operations, the size and weight of the packages being delivered, and the geographical area you plan to cover.
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