HOW TO START A PROFITABLE COURIER BUSINESS IDEA IN KENYA

*HOW TO START A PROFITABLE COURIER BUSINESS IDEA IN KENYA*

Delivery service is a booming business in Kenya that gained momentum from the onset of the COVID-19 pandemic. Individuals, entities and businesses relied on delivery services to bring documents, parcels, and goods to their destinations, minimizing movements.

The business is accelerated by trends in technology, youthful population and increased disposable income from a Kenyan middle class growing at an average annual rate of 5%.

There is no doubt that Kenya‘s business environment has improved over the years and many investors have set up shop in all major towns across the country. This has further created fresh demand for speedy delivery of goods and packages – a need that has not been properly met by the national postal service.

The few big courier companies that rule the industry on the other hand have not been able to match the efficiency that most clients are looking for.

According to research, clients are looking for courier companies that are small enough to offer personalized services and big enough to provide same day deliveries even at odd hours. Very few of the big companies meet these criteria – and here lies a modest opportunity for you to invest in.

Time has always been a luxury—one that many people cannot afford. Most people lead extremely busy lives these days—between a crazy 8-5 job, caring for the kids, attending social events, and carving out some time for the family. There’s hardly time for trivialities.

Smart people have learned to outsource some of the time consuming activities to other people so that they can concentrate on other tasks that they cannot outsource. Why should you drive down five kilometers to the grocery store and risk being held in traffic when you can simply order for a grocery delivery service?

There is a huge demand these days for delivery services and the sweet fact is that starting a delivery service business is extremely easy. If you have a mobile phone, a delivery vehicle or motorbike, and a website (optional), you already have all the tools you need to set up a delivery business. 

What you do need however, is the perfect delivery business idea. Here are some delivery business ideas that you could work with:

*1. ‘Mboga’ delivery*

I already mentioned grocery delivery, so I guess it is okay to start with it. The ‘mboga’ delivery business is quite easy, and it’s one of the most lucrative forms of delivery business yet people haven’t really ventured into it.

There are two ways to run this kind of business. First, you can either own a mobile mboga store where your vehicle would be used to stock different grocery items that you could sell as you move around or deliver on demand. 

Second, you can focus on delivery alone—meaning that you would only purchase and deliver pre-ordered items. In short, you advertise yourself and customers call you to order.

*2. Parcel delivery.*

From time to time, people need to send and receive parcels. E-commerce has even made this function more important because businesses regularly need to send products bought by their customers online. You can start a courier service that picks up and drops off packages for people without stress.

*3. Food delivery service*

Starting a food delivery service is another great idea. Many people want easy access to food when they are at work or when they are too busy to make their own meals. With your own food delivery service, you would be helping to solve a major need and smiling to the bank at the same time.

*4. Errand services*

Another good idea is to start an errand service business. You can help people complete tasks or make purchases on their behalf and deliver it to their homes.

*5. Dry cleaning delivery*

Another great delivery business idea to consider is to help people drop off and pick up their dry cleaning especially in posh estates. Sometimes, people there get so busy that we cannot even afford the time to pick up our official laundry. Wouldn’t it be a huge relief to have someone pick it up and drop it off on our behalf for a token?

*6. Taking kids to school*

You can also help busy parents to pick up their kids after school and drop them off at school every morning. A lot of parents would appreciate and be readily open to such services as it offers convenience and safety for their kids.

*7. Drug delivery business*

No, I don’t mean illegal drugs. Here, I mean prescription drugs. Some sick people usually need assistance with refilling their prescriptions. Old people also face this challenge, especially when they have serious health issues that reduce their physical strength. 

This is another delivery business opportunity. However, you might need some special licensing for this kind of business, depending on where you want to operate. This is because you will be handling drugs, some of which may be prone to illegal abuse. 

*The steps you should take to start a Courier Delivery Business in Kenya*

The most important asset you will need is a reliable customer-base and a good reputation.

Gathering a good customer-base should not be a big issue provided you give good value proposition and honest services. It is a simple business to start and operate, and you do not need any training to get off the blocks.

*Step 1: Acquire Transportation Machines*

You can start with three motorbikes and a small stall (office) in town. A brand new motorbike will cost you at least Ksh.100,000 and a leasing a decent stall will cost you about between Ksh.5,000 and Ksh.15,000 per month depending on the town. 

Alternatively you can buy a small used car (Toyota vitz, Suzuki alto or Toyota Passo) and one motorbike.

*Step 2: Choose a location for your office and register your business*

Since this business does not largely depend on walk-in customers, you can look for an office in upper storeys or in places outside the CBD. That might help you avoid paying good-will charges and high rent prices.

Also, take this opportunity to register your business at the Attorney General‘s office or nearest Huduma Centre.

*Step 3: Invest in equipment*

A bit of preparation will go a long way in ensuring you are ready for the market. First you will need to soup up your motorbike (or van) by attaching a small parcel‘s compartment to it. You may also do a bit of branding e.g. labeling the bike, printing out a few fliers, business cards, delivery notes etc.

*Step 4: Obtain relevant licensing*

Courier services in Kenya are regulated by the Communications Authority of Kenya. For starters, you can apply for the intra-city license that goes for Ksh.30,000. This will enable you to deliver parcels across (and within) all major towns in Kenya.

Those using motorbikes may want to consider going for a ―town operator’s license which also costs Ksh.30,000. Bigger companies can apply for regional license which costs Ksh.50,000. 

Add the cost of a single business permit (around Ksh.20,000 per year). 

Apart from licenses you will also need to think about acquiring liability insurance cover.

*Step 5: Start marketing your business*

One of the cheapest yet effective methods of getting new clients is prospecting. This involves cold calling and knocking on potential clients` doors seeking to build a network. Assure your potential clients that you will provide more personalized services than the big boy companies. Give them your business cards.

Also, liaise with busy retail joints in your area so you can leave a stack of your company`s fliers for regular customers to pick. 

A bit of social media marketing such as facebook and twitter can also help you to build links with online sellers.

*Step 6: Expand*

When it comes to courier business, your company will need to grow as big as possible while still maintaining the handiness of a small entity. Think of investing in a simple website. Think of getting a few branded t-shirts. Hire a few more riders and buy a few more vans. 

You can as well incorporate the business of running errands to the initial model in order to attract more customers.

*Step 7: Focus on wholesale contracts*

Having your loyal clients sign contracts with your company is the easiest way to stabilize your market and guarantee your existence even when business is slow. 

Contract clients are much better than one-off clients – and it‘s therefore wise to give them a price discount to get them to agree to a wholesale contract deal where they will be paying either monthly, bi-annually or annually.

*How Much To Invest*

In order to succeed, you will need to start really small so that you can build a solid bond with your clients as you go up the rungs. Generally, a budget of Ksh.500,000 can be enough to simply get you off the ground.

But it may not be sufficient to guarantee you of sustenance and for that reason you will need to keep re-injecting your profit so that you can grow the business up to the take-off point. The breakeven period for courier businesses is 24 to 30 months.

*How Much To Expect*

Your returns will depend on the type of clientele you attract and your pricing formula. Small letters can be priced at Ksh.250 and bigger parcels for Ksh.500. Sensitive documents and delicate cargo can be priced at over Ksh.1,000. Bigger and heavier luggage can attract even more charges.

A small courier service business serving up to 50 clients per day can deliver average sales revenues of Ksh.1,200,000 per month.

*Final Word*