Yaneek Page, Contributor
QUESTION: It's always a pleasure to read your articles and your advice to various people about small businesses. I am a chartered accountant and would like to start a bearer business. I would welcome any advice you have to go about this. I also need to know the best way I should go about getting customers, etc. Please do keep up the very good work you're doing.
- Mr C
BUSINESSWISE: Big profits, low barriers to entry and small start-up costs! That's a common perception of the courier service business which has made it a very attractive proposition for new entrepreneurs - but perception can vary widely from reality.
I'm assuming that as a chartered accountant you have already done the major financial projections, such as profit and loss, and cash flows, and are convinced that this venture may be lucrative.
I also hope that the assumptions on which those projections were made were realistic. Sometimes as entrepreneurs we get so carried away in how wonderful our ideas are that we neglect to seek answers to key questions like: 'Is there a sizeable market?', 'How will I stand out from the competition?' and 'Can I make enough profit?'
If you're a regular reader of my column, you will know I'm obsessive about doing credible financial projections before spending a cent on product or service creation.
As best as possible, follow the basic business start-up steps such as concept validation, service and business model refinement, in- depth research and planning and company registration.
These processes are detailed in my article of January 27, 2013: '7 Essential Steps to Business Start Up'.
There are a myriad of services you can offer, such as mail and package delivery, lunch or food deliveries, bearer rental, and others. But don't be fooled by the options. This is a very competitive industry with some large established companies and many small players competing fiercely for a share of the market.
Other industry dynamics you should note are that the mail-delivery market will decline in the future as more companies push electronic mail and bill delivery.
On the upside, the package delivery market is expected to grow exponentially as ecommerce expands.
'CHEAP' BUSINESS START
I got valuable information from an emerging leader in the courier business, Erica Wynter, CEO of C&E Innovational Services and vice-president of the Young Entrepreneurs Association of Jamaica. She notes that, at minimum, this business can be started with J$100,000, assuming you already own a computer and would be operating from home. This amount would cover business registration, branded shirts, business cards, logo design, a mobile phone and recruitment of bearers with their own bikes, etc.
There is no mandatory certification or qualification. However, basic business knowledge, an appreciation of customer service, strong management and organisation skills, and familiarity with our road network/areas/addresses will give you an edge.
Wynter says new players are constantly entering and exiting the market, and in the last few years many competitors failed because they didn't sufficiently differentiate their offering and could not attract enough customers. This is why you must specify who you are targeting, the needs you will satisfy, how you're different and why you are better than your competitors.
Getting clients will not be easy. You will need to do a lot of networking, cold calls, emails, letters and other customer lead generation strategies. But even then, that won't be enough.
To get a foothold in this industry you will need to offer a powerful value proposition and game-changing services. Quite frankly, the market is so mature that you will need to woo your competition's customers with very compelling offerings.
Faster, easier, cheaper, safer are just some of the improvements the market will welcome. Do some research on the latest global trends, service innovations and new technologies related to the industry for insights and ideas.
Integrity, trustworthiness and reliability are critical for success in this business. As such, you have to be strategic and proactive in building your brand around these factors.
Now this is important - there are some major risks you will need to manage to reduce possible losses and damage to reputation. These include delivery delays, theft, breach of confidentiality and data security, and injuries/liability from road accidents.
These risks can wipe out your business. Wynter strongly recommends doing due diligence when recruiting bearers and getting police clearance and accident history. Good luck, and thanks for your kind words.
Yaneek Page is a trainer in entrepreneurship and workforce innovation. Email: firstname.lastname@example.org. Twitter: @yaneekpage; website: www.theinnovatorsbootcamp.com