We've been getting questions on a regular basis asking how to start up a small independant messenger company, from cities around the world, and thought it would be great idea to have a resource for people who are interested in doing so. What we're in the process of putting together is a list of questions commonly (and not so commonly) asked, and questions we thought people should be asking, and some answers from various people who've done it already, and have been successful starting a small company.
Note that some of these answers, especially things like tax advice, vary from country to country, state to state, city to city, etc... look into your local business laws and tax laws, and see how they apply in your area.
If you have further questions after this FAQ, you can send email to the following people for advice:
Justin Gullickson - Mercury Messengers, Calgary, AB, Canada
Jean Andre Vallery - Jean Vallery Bicycle Messenger, Sarasota, FL, US
Also check out Jim Gregory's book,Cycling for Profit: How to make a living with your bike, which covers a range of topics from messengering to pedicabs and more.
Shawn Farion in Calgary is establishing a franchise-type, Nextel/Mike-based network of indy couriers, called Kranq. May look complex and corporate, but is just a wider application of the same principles other indys have used to start their businesses.
All you really need to start is a cell phone, and a pager. A computer will help lots to do your billing, and invoicing. And.....oh yah, some clients! They're not real easy to get at first, but have patience and don't give up, they'll come in time. Just make sure you have a little cash saved up to get by on in the beginning.
Nextel phones are a great jumpstart. With their cell phone/radio capability, we used Nextels exclusively for the first eight months. When our volume increased to 60 or 70 tags a day, we had to buy separate radios, but the cell phones got us off the ground.
I run everything off my Nextel, but they are not 100%, so I also have a beeper. I leave the beeper # on my voice mail, so in case the phone goes down they have a number to call me if I don't call them right back. Usually the Nextels are pretty good about getting you your messages, and I really make it a point to call the clients back right away to let them know I got their call and was on the way. All of my clients are comfortable leaving a message now, so it's cool. Ideally, I'd like to have a real phone and pay someone to answer it & dispatch etc. It has happened to me once where I missed a whole bunch of calls one friday afternoon, and my phone blew up with all these messages at 2pm the next day. That's when I bought the pager.
I started with a numeric pager, then added a trunking motorola gtx radio which had a cell line capability, like a nextel. When my service provider changed my phone number without informing me (it took about 3 hours to figure out what happened) I switched to a standard cell phone, my clients have never been happier. It has also allowed me to huck the pager off the bridge, :my clients call me directly, i don't have to phone to check for messages, eliminating one phone call per delivery, cut my cell bill considerably.
I started with a cell phone, a bag and my bike. I soon bought a computer to make the incomes. ThatÕs all it takes. Later when i got bigger i switch my cell phone number to a fix phone line with is more secured.
After incorporating, I registered with revenue canada for a business number, gst number.
Just a registration to the local chamber of commerce. Some of my clients asked me for this registration, itÕs a proof youÕre a really a company, not just a goofy guy.
If a client asks why another companies rates are lower than yours, just tell them, that you can get a burger at McDonalds for 99cents, but does that make it the best place to eat?
If you don't have a problem taking clients away from the company you're quitting, you should QUIETLY spend the last month or so of employment cultivating personal relationships with those clients. The hands-down #1 way to get clients is through personal contacts. Corrupt as it may be, nepotism works. #2 way to get new clients: referral from old clients. If you have a good relationship with a client, you should ask them to reccomend your service to the companies they send stuff to. #3: be on the lookout for people unhappy with their current service. When you're dropping a package, you can ask casually, "How's your service?" Remember, if a client is happy with their service, they won't switch in order to get even better service; they will only switch if they're already disgruntled.
The best clients are those that come to you via word of mouth; one client refferring you to another. These clients are usually not interested in your rates, and often they are desperate. I don't know how it is in other cities, but in DC it is pretty easy to look good, especially compared to some of the rag-tag bums that get hired here. My philosophy is to be the best. There are always going to be clients looking for a cheap deal, and those who need really good service, and I want to target the later. Big companies can do a lot of things an indy can't, but one thing they can't do is gaurantee consistently good service. They have too much work, go through too many messengers, and eventually, they always screw something up.
I was able to start my company by taking some of the accounts from my previous employer which I had brought to that company, then I was offered a job with another company which I took in order to broaden contacts. I was always looking to switch accounts to my own company, but wary about being reported. The easiest to get were clients who were paying cash per delivery, as they were on the lowest priority with my former employers, and being gouged. I often heard the dispatch state "thats a cash account who cares how long they wait" they don't have to say that anymore and many word of mouth clients have been passed my way from them. Word of mouth clients have been the best so far, while yellow page ads gave me 1 deadbeat florist, and a music group that faded away. Curiosity from recievers and receptionists has also lead to gaining accounts as we ride in winter (it gets pretty cold in winnipeg), my company covers the entire city, so when i get to the extremes of town with a drop, they often can't help but ask leading questions.
I also stress environnmental benefit to potential clients, and this has been successful for green oriented business, but the law firms couldn't care less, and can be outright skeptical at a bike messenger handling the responsibilities of their affairs.
I was the first cycling messenger service in town so the differance between us and the other compagnies makes it easy to get clients. But one important thing is to make your client to talk about you. If they thing youÕre have a good service theyÕll share with theire clients. And that goes on until it get back to your first client.
I feel it is important to be consistently more expensive than the average companies I am competing against. Everybody knows that you get what you pay for, so as long as you concentrate on doing a really good job, eventually you will find a niche in the market. If you give better service, then you should charge more. I heard how in Europe somewhere, these guys started their own company by undercutting the big company they were working for. It worked great at first because they were earning much higher commisions working for themselves, but their company was quickly so successful that they hired all the best messengers from the old company and took all the big accounts as well. The only problem is that now the people who used to work at the big guy are now doing the same work for the same percantage of a lower rate. They actually drove the price of tags down, and the big guys had to lower their rates as well.
We copied the rates from our old company, almost verbatim. In general, we try to keep our rates just a little higher than standard. We find that the clients worth having understand the concept of quality service, and they don't mind paying a little more (but not too much more).
I set my rates competitevly with the industry standard, offer slight discounts for daily runs and I'm flexible but won't undercut below industry minimums. I had one account ask a competitor to lower their rates to mine in order to switch; when I found out, that client's rates were increased so he could choose from either of us at the same price, the higher one. Don't let yourself get pushed around by clients trying to save cash. Yes, you get what you pay for.
First iÕve set rate just below the other compagnies prices. Then IÕve realized that clients dont care about a few cents off. What they want is quality. Someony said : quality is long time remembered after price is forgotten.
I sell BMW delivery service not Nissan trash, so clients are paying the prices. One more things, clients who want low low price are in general the oneÕs who are not paying there bill on time. So dont bother with those guys.
I try and run almost like a co-op. I only want enough to cover my time entering trips, billing, etc. and cover some of my insurance costs etc. I offer around 80%. 20-25% higher than any other companies in Calgary. And that's why all of the best and most experienced couriers in Calgary have asked me for a job. I'll never have to look for good couriers, they find me.
It seems like standard commission rates vary dramatically from city to city. We pay 50% of the tags, which puts us around the top of the scale in S.F. Some indies pay out 60%, but some of those don't have Workers' Comp, and I don't think any of them offer health insurance.
Right now I am paying my contractors 75% of my rate before tax. That is 25% more than the DC standard, and my rates are higher than most companies to begin with. My base rate for a d/t regular is $6. That makes it very profitable for messengers to work for me, and it leaves a fine amount for the company. Couriers come to me asking to do work. Word gets out about the rates, so I have no problem getting rid of work.
I pay 80% because I'm not trying to get rich off the backs of the riders who work for me, also I refuse to hire anyone until there is enough work for them so I don't give them my trips.
WeÕre paying juste like avrage euro compagnies around 40% !
We are all veterans of free-call dispatch. I'll toot my horn a little here and tell you that our old company was the first in the U.S. to operate free-call, and that we were the model for other free-call operations that came after. We're all very devoted the system and I can't really reccomend any other method of dispatch, but I will caution that it takes time to master, and it requires smart, experienced, and very ATTENTIVE messengers.
We don't have so many calls that free dispatch is an option, rather we line our riders up with directional routes, so they don't ride side by side with the same calls. Also we are a smaller company so when I hire somebdy they have always the right to say no to a trip that they don't want. The best riders I've had work hard all day rarely or never refuse work, seem as commited to getting it done rather than sitting by the river drinkin' and puffing. Malcolm, Hacksaw you are always welcome back.
I takes the calls in the office then i dispatch the run to the courrier. IÕm making the dispatch courrier just take what iÕm giving them. I know the clients, the times, and I want to keep the contole of delays.
Our company is owned by five equal partners. One partner is a General Manager who dispatches and takes care of most of the clerical duties; the other four partners all work on road. In addition to the partners, we have four employee messengers.
We started the company with myself and Ben Cowan, as partners after a year or so, Ben wanted out and our incorporation had a clause stating any shares must be sold from one partnner to the other or at the consent of both partners to a third party, so it was agreed that he would sell his shares to me. Now I am the sole proprieter.
I own 100% of the compagny. As I staded the business, IÕm the only one who in charge. I have around 10 employees. But only from2 to 4 are working at the same time.
We supply radios. We are planning to get some custom bags and jerseys as well; I think it's reasonable to expect a company to supply some useful clothing so you don't have to trash your own. We don't supply bikes, but we do have accounts with parts wholesalers for our employees to order from.
Ideally, I'd like to make it an option to work as either an employee with benefits and set hours at one commmission rate, or an IC without benefits or fixed hours for a slightly lower rate. Realistically though, it is much simpler to employ messengers as IC's, and if you treat them right and keep them paid without working them to death, it works out fine. Right now I am small, so the only advantage to working for me is significantly higher $/job. In the future, I would like to be able to pay for my riders' phones, pagers, outfit them with cool jerseys and t-shirts, caps and whatever else. I want to make tons of stuff... As far as uniforms are concerned, I don't believe in them, but I feel that if I can provide some cool, quality merchandise, and promote a real sense of pride about working for me, then people will wear it because they want to.
I believe the company should provide all papers such as waybills and manifests free of charge to riders, but the riders should have their own bikes, bags, other personal items. I was providing the radio, without the cell option on, but since I sold the radios, I've never had to to hire anyone who didn't have their own cell phone already. also I have had t-shirts, toques, hoodies, made with my logo on and have given them to employees free of charge, or charged them cost only, and lots of the other guys in town have bought the rest of it. I will never make a mandatory uniform, I don't always wear my own logos every day anyhow.
We provided a lot things, but I feel that corporate ID is a importent things thoses days.(check out UPS FedExÉ) so. Jersey (short, long, wet and dry) bags, shorts, helmets, radios, cell phones, waybills, stickers, post-cards and stuff for advertising. Everytime they enter in an office everybody knows they come from my company, and thatÕs very important.
For cell phones, Nextels are reliable, clear, and they have incredible range. For courier bags, I gotta go with a good old, no frills Timbuk2. For radios, after trying various Kenwood and other systems, we've had good luck with Motorola 900mHz trunking radios.
I'm using a roach bag which has lasted really well, I stuff large, heavy objects in it often. My next bag will be a r.e.load, as they impressed me alot when we visited their shop in philly during cmwc 2k. Since then David and Suzanne at Natural Cycle have ordered these bags for a few people here in Wpg, They sold them all straight away use and swear by them.
The Motorola 900mhz worked fine but my clients hated the radio style phone conversations, so when the one of two service providers changed my phone number without telling me, the others rates were almost double, I switched to a fido phone, which I'm thrilled with, as are my clients.
Phones : Nokia (iÕm european)Bags :oertlieb for sure. And radio we use motorolaÕs
At Mercury, everyone has a cell phone, pager, and radio. Each person has their own client that they deal with most of the time. If the client phone in their trips, they call THEIR courier, who then handles the trip, or asks over the radio if someone else could take it. If a client pages a trip, the page shows up on everyone's pager, and it is basically free call on the radio. This on-the-fly-self-dispatching works well, as long as you don't plan on having too many people working at the company. I think more than 5 would start to get bad with this system.
We do have a base station, although we didn't even have an office when we started. When we reached about four people, 60-70 tags a day, we had to get a dispatcher and base station. Initially we all rotated through the office, but we learned quickly the value of consistency and continuity, so now we have one person dispatching full time, though we may switch off in six-month intervals or so. As for computers, none of us are programmers, but we were able to tailor Filemaker Pro to practice paper-free computerized dispatch.
Just my Nextel. [Before getting a base station,] I'd like to have 4 or 5 guys doing as much work as they can comfortably manage, each earning $150+ every day before I start thinking about an office. If anything, I'll get a solid land line at my apartment and work out of there (cell phone reception is definitely not 100%). I'd forward the phones to myself when I have to go out to do work.
I had an office in dowtown wpg. since '97, when the rent was $133 cdn. Since then the landlord has moved the rent to $250 so I moved into Natural Cycle, which is a bike shop with a smaller courier company than mine. We all use fido phones so we text message each other, or phone with work. so far so good.
We have an office, for the dispatcher and for riders to rest. But most of all for the bags jersey and all of this thing. We had an office from the beginning. But if you have a flat near the center, that weÕll do !
We dont have programm for dispatch. My brain works just find !
We bill monthly, net-30 (payment due 30 days after invoicing). We use Filemaker Pro -- the same program we use to book and dispatch tags -- to produce bills and track account balances.
Using a manifest for my clients to track their calls, I simply fill the rates in as the trips are done. There are roughly 30 lines to a sheet, I bill them by totalling the "call record" that is in their office. These sheets are 80% recycled paper become the invoice when completed, or when i ask for payment. I'm flexible with my clients as to the time of month that they would prefer to pay, but state that payment is due upon reciept of the invoice. Deadbeats don't last long this way, so far I've only been screwed over by 2 businesses, for about $100 total. Generally it takes about a week or two at the most to recieve a check.
We bill every month net-30. We have a file maker pro programm made by a friend.
[for invoicing] Proventure Invoices & Estimates, used in conjunction with a database, works well, and won't cost an arm and a leg. (I paid $15 for both programs) as long as you have a little knowledge on how to customize it to fit your needs. If anyone wants to use this sort of software, and wants tips on how to set it up, just email me.
Filemaker Pro is pretty good for this; if you use a PC, Microsoft Access is probably even better. As for accounting, Quickbooks is excellent; you could run a Fortune 500 company off of it.
I use a program called Courier Service Toolbox. Their phone # is 1-407-679-1539, and I think it does help to have their stuff. It keeps track of all the work, making it easy to print bills, driver reports etc. Its a program that they licensee to you and pay for every month, sort of like a phone bill, based on how much work you do (I think the most you can pay is like $85/month). There is a $30 or $40 start up cost, but other than the hassle of monthly billing, it is rather easy, and way cheaper than some of the other programs I have looked at. To buy one, you are looking at probably $5000 just for starters. Fuck that. If you know a bit about computers, it is not too hard to make your own database using Access or Excel. I have thought about getting a friend to custom design me a database. One day...
File maker pro work just find. And you can link the billing part to the client list part and everxthing else.
My cell phone & my PC. That's it. I do it all. Really, CST takes care of all that for me. I just have to do the taxes quarterly, but they send you all the forms you need, and the numbers are all in the database. [It takes] about 30-60 minutes a day, the time it takes to punch in the work into the database. Really it is set up to be a live dispatch thing, but I just keep track of the work on a manifest during the day because mostly I'm on the road.
First, make an appointment with an accountant, just as a consultation, ask them a million questions, and take very good notes; second, try to save as much as possible to pay taxes, but don't stress too hard if you're not 100% on top of it right from day 1 -- the government allows an unofficial grace period of 6-12 months before you have to be on track with that stuff.
Yes, we do. This is not something we really have set rules for. We all have our own rates, zones and service deadlines so it can get a little complicated. We are considering closer standardization of the rates, but nobody really wants to be told what to do. Basically though, none of us really care what we get paid for each other's work. If we can help each other we do, just for the fact we want to support one another, and take away as much work from the big guys as we can. We all agree however that our services should always cost more than the average if we are to promote ourselves as superior in service (which we are, by far) compared to the big guys.
In wpg we were the first indy company, our office was open to all bike-couriers in town. we had help offered from almost all these guys who worked for other companies. The way i looked at it was if your an ic, your indy by definition. Now almost everybody has a cell phone and there are 4 independants in wpg. But they all work with other companies except me, due to lack of accounts, and 2 of these indy's are new as of 2001. I am working out of Natural Cycle, which is a bike shop/courier company. We exchange calls every day so we don't end up riding the same direction together. I'm a lot busier than they are so I'm giving them more than I get, but they are great to work with and the work is getting done more efficiently. Also there are those already employed guys who have cell phones that help out when they can. I pay 80% to whoever does the work of the rates I charge, Natural pays me 80% of their rates (slightly higher).
At this point we don't offer insurance, such as liability, but it has been brought up at bma meetings, and put down as the individuals responsibility. It is pretty costly here, and we don't have to pay hospital bills here in canada yet, we are taxed quite a bit more however and these social programs have been crumbling away. In conservative strongholds such as alberta, two tier health care is already a reality.
Health and accident inurance for everybody !
When I was deciding whether to use manifest [full paper sheets with lines for each delivery - ed.] or waybills [single sheet for each delivery -ed.], I checked into prices, and I found out to print (nice high quality professional looking) manifest sheets (enough for 7500 deliveries) costs about $25-40. Whereas an equivalent amount of waybills would cost $250-300. Quite a large difference. There are some things I like better about waybills having used both systems over the years, however the significant difference in price makes it an easy choice. One thing I might suggest, that I have done with a lot of great response is: My first manifest was plain Jane, yet functional. (it got the job done), however one night I had some free time, and I dabble in graphic design a bit, so I designed a new manifest sheet that looked really cool, with some nice fonts, and my company name and phone number in large print at the top, and my logo as a large watermark covering most of the page. I did it just for fun, but found out it was well worth it, because now when people sign my manifest, they notice it. Every time!!! And they say "Mmmmm Mercury Messenger, I hadn't heard of you guys before, are you a new company? What are your rates like?" So take some time and make a nice manifest sheet. People will notice. It just makes you look that much more professional.
Commit yourslf to what you're doing, don't grow too fast that you can't complete the the work you accept; be honest with your clients and realistic to yourself about work you can or cannot do. Stay out of the bar! (personal experience) You can make some great connections, but you can also piss it all away. Make time for yourself away from the job, it can be easy to succumb to stress, burnout, going to the CMWC2K did me a world of good, it really did! Get connected with people who can help where you need it, offer help to those who need your help. I welcomed the other indy companies from the get go, answered any question I could to help these friends of mine do what I thought was a good idea, there's enough work for everyone, so we don't solicit each others accounts.