news and information from Shed 5, the online logistics billboard for couriers and hauliers

10 January 2011

The courier’s research checklist

by Mike George

What is research?

Research is what you do to find out all the facts and figures you need for your planning, so that you can go into the business with a good idea of how it will work out.

Ask any established courier how you should start and they will tell you to start with research — but what? and how? and where will you find the information?

how long does it take?

Some people spend a couple of days looking into the business and others spend months doing detailed research and planning. It depends on how much detail you want to get, and how much of a risk you are willing to take.

For example, if you’ve got some money in the bank and you can afford to take a risk, you could just rent a van, get some insurance and ‘sub’ for a courier company to see if it works out. (But you still have to be committed — if companies think you’re just playing at it they won’t give you work.)

On the other hand, if you’re thinking of using your redundancy money to set up, and you need to be sure of a reasonable income, you’ll probably want to take a few months and get all the facts and figures before you take the plunge!

where to get the information

These are some of the places where you can find the information you need.

forums

There are some free forums on the internet, where you can pick up a lot of useful information before you start.

The courier owner driver forum (www.codforum.org.uk) is an independent forum for courier owner drivers and is friendly to new starters.
The Courier World forum (www.courierworld.co.uk) is another free forum which also has work listings.
Trucknet (trucknetuk.com) and the Professional Drivers Association forum (www.pda-uk.org) are both for truckers, but are good for learning more about the transport industry and life on the road.

other websites

Have a good look around the internet and you will find a lot of sites where you can get general information about transport and the courier business. Try a search on ‘courier work’, ‘courier sheds’, ‘transport’ and ‘logistics’ and see what you find. Here are some suggestions:

For information about all the different vans try the What Van? site (www.whatvan.co.uk).
Department for Transport
Vehicle and Operator Services Agency
HM Revenue & Customs (for information about VAT and other taxes)
The codforum links page also has lots of useful links for owner drivers.
books
There are several books and guides available online, most of which promise you can earn £250 or more a day! Don’t waste your money — there is plenty of free information available on the web.

couriers

Try ringing around your local couriers—both ODs and companies—and chat to them. They might be too busy to talk, but if you catch a friendly one in a talkative mood you’ll be able to get some good local information. It’s best to avoid Fridays — try Monday or Wednesday.

And remember when you’re talking to people that they might be busy, so try to stick to the important things and try to make it a friendly conversation, not a grilling — and don’t expect them to give away information about their own customers or finances.

suppliers

Suppliers are the people who will provide services to you — such as printers, accountants, banks, van hire companies, freight exchange sites, insurance companies etc.

Get some prices and quotes, find out what they offer and decide which ones you would want to do business with.

customers

Go out and speak to some local businesses that might become customers — find out whether they use couriers, how often, what kinds of loads, etc. If you can, find out how much they pay, and what is important to them — is it price? service? reliability?

Also, see for yourself — loiter on some industrial estates and business parks and look for vans going in and out.

personal contacts

Ask around among your friends and family — do their employers use couriers? Are they happy with the service and price they’re getting?

what to find out

When you do your research you will be looking for the information you need to fill in the gaps in your business plan.

So you should start working on your business plan when you start your research. Some key points to cover are:

costs
vehicle
equipment (phone, satnav, computer, etc)
stationery and advertising
insurances, subscriptions and fees
accountants
income
how much work there is, and what kind
what rates people will pay
other information
how many competitors there are locally, and what type
how many potential customers there are, and what types of courier service they use

how reliable is the information?

Generally speaking, if somebody takes the time to talk to you and answer your questions, they won’t deliberately give you bad information. On the other hand, it’s your future livelihood that’s at stake, so you have to be careful about accepting information at face value. So, what could be wrong with the information, and why?

optimism

It’s common for people to be a bit over-optimistic and paint a rosy picture of courier work, such as…

other couriers might exaggerate because they don’t want you to think they are doing badly, or you might catch them in a good month when business has been very good.
customers might exaggerate for the same reasons, or they might be expecting a lot of new business that doesn’t materialise.

lies

Sometimes people will tell deliberate lies, for example…

some books about courier work over–state the likely income, and how easy it is to get work, just to sell more books
a customer might lie about what prices they are paying, because they hope you are going to quote lower
a courier company might exaggerate the amount of work available, to encourage more ODs to sign up

misunderstandings

Another source of bad information is genuine misunderstanding, for example…

a customer might say they use couriers for ten loads a day, but they actually mean overnight or next day deliveries
someone in an office might tell you they don’t use couriers, but the post room or transport office will give you more reliable information.

what to do next

The next thing to do is to decide whether to carry on.

The information you have collected so far might make it obvious one way or the other, but you will probably need to do a simple business plan to be more sure about it.

Find more work at Shed 5 logistics billboard for couriers and hauliers.
Reliable owner drivers wanted with vehicles from motorbikes to trucks.

Technical courier work

by Mike George

“Are you going to plug it in?”
How many times have you delivered a new computer or component, and the customer has had to wait for an engineer to install it?

If you were a technical courier you would be able to do the whole job!

© Bruce Latto, 2006

Bruce Latto is The Ferryman, same day and technical courier based in Aberdeen.

What is a technical courier?

Every day, all around the country, couriers are delivering computer parts to offices, shops, and other commercial premises, and are often asked whether they will be installing them as well. Usually the answer is no, sorry, there will be an engineer along later. The next day the courier may well be back again to pick up the defective equipment and take it back for servicing.

In many cases, there is no other option, as quite a lot of technical expertise can be required to install and set up complex systems. What about simple replacements, though? All that is needed could be just swapping a monitor or printer, making sure the new one works, then taking away the old one, all in the same visit.

This is the work of the technical courier. These are men and women who carry out only “tech”, or “techy” work, or same day couriers, employed or self employed, who will take a normal delivery, or a tech job, as and when they come along.

could you do it?

How do you get into this kind of work, and do you need special skills or experience? Oddly enough the answer to the second question is usually no. With suitable training most of us could do it, at the basic level at least. A bit of experience is useful, confidence that you can do what is required will help, but the ability to ask for help when you need it is essential.

To achieve success in any business, you have to know that whatever question you are asked, the answer is always yes. Can you swap out a monitor, yes, can you change a pin pad on a supermarket checkout, yes!

does it pay?

Is it worth it, though? Well, you really need to get enough of it to make it pay. Individually, the jobs often don’t pay very well, but they may only take a few minutes, so if you are quick and efficient, it can be worthwhile, once you know what you are doing.

What does a technical courier do?

It may be helpful to have some idea of what sort of things you may be asked to do. Look at the computer on your desk in your office, or at home. You may be asked to replace anything which plugs into it, monitor, mouse, keyboard, printer, router, modem, etc.

Think of a point of sale system in a shop. Again, anything which plugs in can be replaced – pin pad, the little display unit which shows the item just scanned, till drawers, the receipt printer and the little monitor the operator uses.

At a more advanced level, some work may involve opening up the computer, usually to swap a hard drive. You are unlikely to be asked to do anything more technical, at least without some training.

technical courier or computer engineer?

So what is the difference between the technical courier and the computer engineer? They are still worlds apart, really. The tech guy is only replacing something known to be faulty, usually because it is a common fault and replacing the unit is usually the most cost effective thing to do initially. The engineer or technician is able to diagnose faults and carry out much more complex work on servers, networks, etc, although he will of course swap a keyboard if he finds that is why the system is not working.

Who uses technical couriers?

Several of the big computer suppliers offer installation services, which are usually contracted out to one of the national technical couriers, who in turn will sub-contract the work to a local tech courier.

Some of the large employers will install computers in their employees’ homes, either for business use, or as a staff purchase scheme. These are delivered by tech couriers, who take everything out of the box, connect it all up, fire it up, usually all the software is pre-installed, set up the dial up or broadband connection, and maybe provide some basic instruction in how to work it.

Getting into technical courier work

So, how do you expand your courier business to take in tech work? You do exactly the same as you do to find other courier work, just target different companies.

Look up the yellow pages and do a Google search, to find out which technical couriers have local depots. Ring them up, go in to see them , explain that you are looking to expand your services into this type of work locally, and will be happy to take anything they can offer you.

Once you have contacted the local ones, then try all the national companies who do not have a local depot. They will have work in your area and will have someone, often working from home, doing their work for them. The usual method is for a trunk or overnight service to drop off their parts in the morning, or the tech courier may pick them up from one of the depots of the national couriers.

Doing the job

When going off to a job there are some basic questions you can ask, which won’t make you sound too daft, such as do you have to get the user to power down the system before you replace the part, or can you just “hot swap” it.

Do they want you to change the cable, leads, etc, or just try the new part first, then change the cables if that doesn’t work. Sometimes the new part comes as a complete kit, including all fittings, but in many cases you don’t have to replace everything.

getting help

If it is something you haven’t done before, you can often get someone to talk you through it when you pick up the part, or there may be instructions in the box. For example, you have probably never serviced a photocopier before but when you do you will find instructions inside the box of parts, starting with how to remove the new drum from the box!

Then in the box there is a big sheet with pictures, which shows you exactly what to do. There is a diagram inside the door of the machine, which shows you where everything is, with coloured markings on the parts which need replacing. Finally, if all that wasn’t enough, the little display screen on the copier will show a fault if you haven’t seated the parts in properly!

Always be prepared to ask for help, including when you are on site, there is usually someone you can ring to talk you through a problem. Don’t swap a mouse or keyboard without powering down the system, unless they have usb connections, you can cause damage. If something has no screws visible, and no obvious means of getting a panel off, it usually just pulls off, but be careful!

give it the boot

The most useful tip for anyone working with computers is if something isn’t working, restart it. Whatever you are installing may have to picked up by the operating system before it will work. If restarting doesn’t work, power down the system, wait for thirty seconds, then switch on again. Remember, computers work by magic, so you sometimes need to know a few special words, like ***&* and $$%** to get them to work!

equipment

Carry a couple each of flat and Philips screwdrivers and a knife (for opening the cartons!) For most jobs that is all you will need, although occasionally a hammer is tempting!

satisfaction

Finally, job satisfaction plays a big part in this. All couriers have known the delight of customers when they are handed whatever it is they have been waiting for to get on with their lives and their businesses.

Tech work means more of this, the smile of the shopkeeper who can process phone cards again, the relief of the garage owner who can print test certificates again, and delight of the kids when you ask them to stick in a CD to test the surround speakers which came with the new family super duper computer system.

Technical courier work – try it, I think you’ll like it.

© Bruce Latto, 2006

Bruce Latto is The Ferryman, same day and technical courier based in Aberdeen.

Find more work at Shed 5 logistics billboard for couriers and hauliers.
Reliable owner drivers wanted with vehicles from motorbikes to trucks.

21 June 2010

How to get paid and avoid bad debt

by Mike George

Why don’t they pay on time?

So you got some work as a subby and business is looking good, but why is it always a struggle to get paid?

There will always be bad payers, but there are things you can do to make it easier to get paid on time, so read on …

Before you start …

Before you even set up in business as a courier, there are things you can do to reduce the problem of bad debts. If you plan your business properly before you start, and take control of your finances, life will be a lot easier.

remember you’re a business!

This one is obvious, but can be easy to forget — as a subby you will provide a business service to other couriers, so they will be your customers not your employers.

That means you should expect to get paid on normal business-to-business terms, and using normal business procedures like invoices and statements.

learn about credit control

Before you go into business for yourself you should learn how credit control works, how to lay out an invoice and what a statement looks like.

have a credit policy

How much will you allow each of your customers to owe you, and for how long?

This will tell you what credit limits to set, and when you should get credit references, and what payment terms to set.

Your business plan and cashflow projections will help you answer these questions.

expect the worst!

When you write your business plan, make an allowance for bad debt. Five percent is probably about right.

spread the risk

You should spread your business over at least six different customers, so if one doesn’t pay you can still survive.

Before you do the job…

Before you take on a job as a subby, these are the things you can do to help improve your chances of getting paid on time:

agree terms

Be clear about the payment terms for the job. If you agree terms like ‘30 days’ is that 30 days from when you do the job, or when you send the POD, or the invoice, or from the end of the month?

know who you are dealing with

Get a full business name, address and contact name and number. This will make sure you send the invoice to the right place, and make it easier to chase up payment if you need to.

get full job details

Try to get a job number, consignment note number or other reference for the job, so you can put them on the invoice and make it easier for them to pay you.

If you are dealing with a one-person business they might not use job numbers.

After the job…

After you have delivered the load, these are the things that will help make sure you get paid with no problems:

the POD

The subber will tell you how they want the delivery confirmed, usually by text or phone call (remember they are your customer, so they are always right!).

But that is just the first step, and the usual rule is — “no POD, no pay” so you will usually have to send a hard-copy POD by post.

If you don’t send the hard-copy POD they will not get payment from their customer so they won’t be able to pay you.

the invoice

Send an invoice which includes your invoice number and date, with full details of each job — dates, places and reference numbers.

Also include your payment terms as agreed, with the expected date of payment. And don’t forget to include your business name and who the cheque should be payable to, or your bank account details if you are expecting payment by BACS.

Before payment is due…

You should now expect to wait anything up to 2 months for payment, depending on what terms you agreed. But don’t just file your copy of the invoice and forget about it.

watch the credit limit

When you start getting a few jobs from one customer it’s easy to ignore the risks and let their debt build up.

Keep an eye on how much they owe you, and if it gets close to the credit limit you have set for them you should:

  1. politely decline any further work until you have received some payment from you early invoices, or
  2. ask for a couple of credit references from their other suppliers (as long as your credit limit is reasonable and you are professional about it they won’t mind — it is normal business practice), or
  3. you can pay for a credit reference from a specialist agency like Direct Route or Experian

give them a call

If it’s the first job you have done for this courier, give them a call a few days after you sent the invoice.

This will keep your name fresh in their mind in case any other work comes up, and you will be sure you have sent the invoice to the right place and they got it.

Reasons for not getting paid

Most couriers are honest and are not trying to cheat you. The most common reasons for not getting paid are:

  1. misunderstandings about payment terms
  2. the subby didn’t send a hard-copy POD
  3. the subby didn’t send an invoice
  4. the invoice doesn’t show all the information about the jobs
  5. the invoice doesn’t show the subby’s correct business name and address, or payment details
  6. the subber is disorganised and hasn’t got around to paying yet
  7. the subber has a cash flow problem and is dragging it out

Those are the easiest problems to put right, and you will get your money eventually. Some other more serious reasons are:

  1. the subber is dishonest and is deliberately dragging out payment for as long as possible
  2. the subber is dishonest and has no intention of paying the subby
  3. the subber has a serious cash flow problem or financial difficulties and is going bust

When payment is overdue…

Here are some things you can do if your payment is overdue:

  1. double check that it is really overdue — check the dates against the agreed terms
  2. check whether it has been paid — check your record of cheques received, and check your bank account to see if it has been paid by BACS
  3. give them a friendly phone call — this will sort out most payment problems (you will need to tell them the date you sent the invoice, your invoice number, and the reference numbers of the jobs)
  4. send a statement listing all outstanding invoices, with a polite letter requesting payment
  5. put them ‘on stop’ and tell them you have done it — this means you will not do any more work for them until they make payments to bring them back under their credit limit
  6. send a letter asking for payment within seven days or you will apply a late payment charge and put their debt in the hands of a collection agency
  7. give it to a debt collection agency

What NOT to do…

It can be very frustrating when somebody owes you money, and you might be tempted to take drastic action, but it is not a good idea. Here are some things you should definitely not do:

  1. harrass or threaten them — you will probably end up getting arrested
  2. ‘name and shame’ them on a forum — you should not do this because:
    • it doesn’t work
    • you could be banned from the forum
    • you could be sued
    • if you get your facts wrong you will look like an idiot
    • even if you are in the right, it is very unprofessional and other couriers will avoid you
Find more work at Shed 5 logistics billboard for couriers and hauliers.
Reliable owner drivers wanted with vehicles from motorbikes to trucks.

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