Business Report: Entrepreneurial Analysis of a Courier Service

This report provides a comprehensive analysis of the entrepreneurial aspects of starting a courier service. It begins with a venture description, outlining the nature of the business and its operational requirements. The report then delves into management strategies essential for the smooth running of a courier service, including transportation management, human resource retention, and the implementation of management software. The marketing plan section details effective strategies to increase sales and attract new clients, emphasizing the importance of social media presence, cold calling, and competitor analysis. A thorough competitor analysis is included, using Porter's Five Forces to assess the competitive landscape. The financial analysis covers both initial and ongoing costs, projecting potential profit and loss. The report also addresses potential risks and challenges, such as accidental risks and theft, and suggests mitigation strategies. Overall, the report serves as a guide for aspiring entrepreneurs looking to establish a successful courier service, covering crucial aspects from planning to execution.

Running Head: ENTREPRENEUR AND INNOVATION
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Executive summary
This report is on the entrepreneur of starting a courier service. This report states the clear
understanding of the new business process and the requirements before starting a new business.
Then its venture description, management, marketing planning, competitor’s analysis, financial
planning, risk and challenges faced by this industry.

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Table of Contents
Introduction..........................................................................................................................3
Venture description..............................................................................................................4
Management........................................................................................................................4
Marketing plan.....................................................................................................................6
Competitor analysis.............................................................................................................8
Financial analysis.................................................................................................................9
Risk and challenges...........................................................................................................10
Bibliography......................................................................................................................12
Appendix............................................................................................................................14

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Introduction
A courier service is a service where one is allowed someone to send some parcel or
consignment from one location to another. Whereas a courier company is the one which delivers
messages, packages, mails and many other things. It can be done through different options like
speed, security, specialized and many other options which is dependent on the customers.
Courier service offers faster and secured alternative to provide delivery services. It has taken the
place of the traditional mail services which was slow and expensive. If the product that is
required to be deliver is heavy then the courier service is the best alternative. Courier service got
more popular with the arrival of the online shopping where consumers orders verities of item.
This increase of requirement led to the need of the specialized delivery services which could be
able to deliver the goods. Services that are provided by a courier services are delivery of large
items, safe and secured transportation, and delivery of important items, worldwide delivery, fast
delivery and ability to track the delivery. Some of the courier services offer extensive delivery
services to fulfil the need of the customers. Courier services got the popularity due to its superior
speed delivery and tracking capabilities. Ecommerce business led to the spread of courier service
more as some of the ecommerce operates has their own courier services or some make contract
to different courier partners to perform their tasks. Courier service operates in all scales and
some of the leading courier companies like DHL, TNT, and FedEx are worldwide known
companies. Over the past five years the industry are growing at a rate of more than 30 percent
and they seem to be keep on increasing. It is forecasted that the courier service industry are going
to grow more than 20 percent within two years.

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Venture description
Companies operating as a courier services provides land, air and sea services to deliver
the items. Global courier services has struggled a lot in last few years while the economic
slowdown in the recent period has led to the rapid growth of this sector. In the recent period, this
industry has seen huge growth with the rise in the business activity while demand for the goods
is increasing. Increase of internet access and smart phone there is also increase in revenue in this
sector. There is also increase in e-commerce websites which created a greater need for the
courier services. This industry is projected to grow at the rate of 3 percent every year. Courier
service require moderate to low capital investment. There is need of aircraft and truck for bigger
cargo with packing material required according to the destination and items to be delivered.
While there is, also need of technology to track the package while in transit. There is also
requirement of manual labor and latest technology. Entrepreneurs who wants to start this type of
business whether in a small or big scale should ensure that a proper market survey is done.
Overall there is need of low amount of capital to start a courier service as it is a profitable
industry and open for all aspiring entrepreneurship. They can choose any scale of operating
whether it could be delivering in cities or providing service at both national and international
level.
Courier services is the perfect solution for many needs like whether delivery of light
items, delivery of heavy items, transportation of any fragile items and many other type of
services. They offer a large number of services and currently it is spread to a vast area. Currently
courier services offers both national and international service.

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Management
In the current scenario courier service plays an important role by providing service and
making the business easy and ensuring a successful business. Courier service struggles a lot to
manage to meet the consumer demand. So the management in the courier service plays an
essential role as its necessity led to the simplification of the business. Different management
software is introduced to make the management in the courier service easy. With the proper
management, business performs with the flexibility and transparency. Management is need to be
customized which will suit the need of the customers and for the betterment of the company. To
run the business smoothly there must be effective and smooth transportation system. While the
transportation cost need to be managed. With the increase of fuel price it must be added to the
freight rate. Ways to overcome increase in transportation cost is by using bio fuel truck. Proper
retention of the human resources is the backbone of this business. Courier services require
skilled and efficient work force to work effectively. Proper management to provide right service
to the customer at the right time is necessary while managing the multiple supply chain. With the
help of proper management performance of the business can be improved. Some of the
management tips that would be effective in the courier service are as follows:
 Courier and consignment details
 Payment module
 Administrative module
 Customer management
 Consignment receipt generation
 Notification module
 Bill generation

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 Invoice details
 Data storage and rate management
Cost Reporting requirement Registration
$ 650 company registration Company tax returns need to
lodged with the ATO
Registration with the
Investment commission
$ 70 business name Register to get the ABN
Register for GST
Marketing plan
For offering the best courier service there is always need of a proper marketing strategy.
A proper marketing strategy can increase sales and new clients which is vital for running the
business. A marketing plan for a business defines as the process of marketing activities which
will help in increasing the revenue and customer base. It helps in taking the marketing decision
while targeting the marketing plan. It will also help to create objectives for the business to
expand and improve the courier services.
 After naming your business, it’s high time to market your business.
 Start communicating your services to friends and family and social media such as
Facebook, Twitter and LinkedIn.
 A business page on social media must be created which will help to know other courier
business. After this, cold calling and emailing prospects can be done to aware my
business plan.

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 Potential customers based on keywords can also be used. Craigslist can also be used in
order to post free ads.
 Marketing plan must include the feature and advantages of the service which is provided
by the courier company. It must include the delivery options and the pricing structure
which company offers. All discount related matters and offers available for sale is also
required to be provided.
 Research the targeted market which will help in increasing the business profit.
Determining the motive for delivery may also increase the sales. Targeting the customer
during a specific period is also applicable.
 Marketing plan will help in knowing the competition in the area while making direct and
indirect way of delivery so that they can compete with other similar types of business.
 Choosing the advertising method is also important which could be television, radio,
posters and many other methods. Marketing in the company website to make advisement
with proper method so that it can attract new customers an also maintain the relation with
the old customers.
 Determining the budget for the market planning especially for the new business is also an
important task. A business can use 20 percent or less of its sale on the marketing
activities during the initial startup while it will decrease with the increase in sale.

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Reasturant Hotels Online stores Manufacturer and
Distributors
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Target Market
Target Market
Competitor analysis
Every business especially an entrepreneur, must on a continuous basis need to examine
their competitor so that they can provide better service to its customer than its competitors. A
good marketing strategy cannot be completed without the competitor analysis. Competitor
analysis helps in taking opportunities by applying proper business strategies by analyzing the
competitors. It also helps in launching new services with better features and technology which is
better than the competitors. A proper competitor analysis helps to know the strength and
weakness by comparing the competitors so that they can improve their marketing plans and other
strategies to bet the competitors. With Porters five forces a courier company can determine their
competition which are as follows:

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 Threat of new entrants – Anyone who have capital with little bit of skills and knowledge
in the courier service can start this business. New entrant like amazon had made the
agreement uses taxi and bikes to deliver the products.
 Threat of substitutes – Substitute refers to the other industries providing the similar type
of service. Like non-courier service, providers are entering in the market by seeing the
growth of this industry.
 Rivalry – This factor is the important factor in the courier service industry as it depends
on the factors like growth rate, service or product difference and brand value. Courier
services are seeing growth due to increase in the e-commerce and usage of internet.
Companies with huge brand value like FedEx, DHL and many other are the main
competitors in this industry. While there is no switching cost expenses which the
customer has to bear which make it easy for the customer to move to other service
provider at any time they want.
Financial analysis
Financial analysis helps the company to navigate the current and future income and
capital requirement. This industry is a capital and labor intensive industry as it totally depend on
this two factors. Some fixed or variable expenses includes labor expenses, advertising,
depreciation and insurance. Labor expenses include salaries and wages to the package
department, drivers and other operators which are required for the business. Initial expenses can
be in huge or low depending on the scale of the industry. Some fixed expenses will be more in
the initial stage but it will keep on decreasing as the time goes and with the increase in sales.
Cost Amount
Marketing expenses 20 % of the gross annual sales

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Operating expenses $ 200000 per annum
Labor expenses 30 % of the total annual revenue generated
Insurance $10000 per annum
Depreciation Diminishing balance method
The following table shows the projected profit and loss of a courier service:
Risk and challenges
Courier service is not an easy task as it has different process which is required to be
implemented in order to reduce the spoilage or accidents. They need to be extra careful from
loading to driving until the delivery is completed. Insurance is the only option to save some of
the loss up to some extent. So this industry requires skilled employees to prevent any unseen
events. Some of the risks that can be faced by the courier service providing industry are as
follows:

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 Accidental risk – Driving is the major part of any courier service. Drivers has to travel a
lot for a long distance on a regular basis which increase the chance of accident and
breakdown. Which results in damage of the product in the delivery car and damage to the
company properties.
 Theft – It is the major problem that the courier service is facing today. Thrives finds the
opportunity for theft which is a serious issue for the business as they have to incur loss.
There is chance of theft in vehicles, parcels or any products in the courier industry.
 Damage of goods – Damage of goods that are needed to be delivered is always in risk of
damage. It needs to be properly handle with care until the product is delivered to the
customer.
Challenges that a courier company majorly faces are as follows:
 High competition in the market as there is increase in number of competitors
 Dependent on the market demand
 Requirement of skilled staffs
 Customer satisfaction

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Appendix