How to Start a Courier Business in the UK

The courier sector in the UK has grown dramatically post-COVID, driven by online shopping and a demand for on-demand courier services. 

This industry generates £14 billion each year, with signs of substantial growth over previous years. In 2013, the country’s delivery and courier industry processed around 1.7 billion parcels annually, while in 2021 this number changed to 4.2 billion and has grown even more since. 

Naturally, these statistics signal tremendous demand and appeal for starting a courier business. To help you get started, we offer an in-depth guide on how to start a courier business in the UK with practical tips and a step-by-step process. 

Step 1: Conduct Market Research

The first step to starting a courier business is conducting thorough market research. This process will help you understand the market, pinpoint industry trends, and identify gaps in the market. 

As a result, you’ll have the opportunity to differentiate yourself from the rest and offer a superior service that potential customers won’t be able to resist. 

To collect the information you’ll need, read industry reports and publications, monitor e-commerce growth, explore technology trends, track consumer preferences, and use social media to find out how people perceive your competitors. 

Understand the Courier Industry

When getting to know the courier industry, analyse the current position and trends, including growth areas like e-commerce and local delivery. Identify opportunities for niche courier services, such as handling hazardous materials or express delivery.

Unsurprisingly, the courier and delivery industry is directly influenced by e-commerce trends. In the UK, e-commerce sales reached a record £95.9 billion in 2024 – a number larger than the GDP of some small countries. Predictions are that the country will have over 62 million e-commerce users in 2025.

These staggering findings reveal that the industry is thriving with demand for parcel deliveries.

But what’s this market truly made of?

Courier companies can offer diverse courier services, which can be grouped together based on parameters like:

• Speed of delivery – same-day deliveries, next-day deliveries, or standard courier services;
  
• Nature of items – documents, parcels, freight;
  
• Geographic coverage – local, national, or international courier services;
  
• Specialist courier services – specialist handling of legal documents, medical supplies, hazardous materials, temperature-controlled products, or high-value items;

For example, standard business courier services mean collecting and delivering parcels over a specified time frame. On the other hand, same-day and express courier services provide urgent delivery, catering to clients with limited time. 

With players like Amazon Prime on the market, next-day delivery and same-day delivery are now a standard rather than a bonus. 

Other changes, like digitisation, have also created interesting trends pushing for adaptation. For example, digital solutions have resulted in a decline in traditional letter and document delivery. In response, UK couriers are creating premium services like express deliveries, tracking and proof-of-delivery facilities, and click-and-collect points. 

Study Competitors

Once you’ve understood the market, explore what other courier companies are doing. What market share do they have? What services are they offering? How are they attracting customers?

For example, there were 10,141 businesses in the courier activities industry in the United Kingdom in 2024. While this sector was once dominated by a single player, Royal Mail, it has now grown to include diverse major players. 

Some of the biggest and most successful courier businesses in the country include:

• Evri;
• DPDgroup; 
• UPS;
• Parcelforce;
• DHL;
• Yodel.

When researching other courier businesses, gather information on their services, pricing tiers, delivery times, fleets, and marketing. Identify gaps where your business can offer something unique, like premium customer service or advanced tracking features.

Define Your Target Market

Next, think about your target market:

• Who are your potential clients (age, gender, etc.)? 
• Will you be working with retailers, e-commerce businesses, pharmacies, or other businesses?
• What type of courier services are they likely to need? 
• What are their pain points (speed, affordability, reliability)
• What delivery speed will they require?
• How important is tracking for them? 
• How much are they prepared to spend? 
• Are they eco-conscious?

Answering these questions will help you build services that guarantee customer satisfaction.

According to Meteor Space data, in 2024, 81% of British nationals used courier and delivery services. As mentioned above, Amazon Prime has set a high bar for UK couriers. But that’s not all.

Here are a few important findings in the study:

• In 2024, 40% of online shoppers considered same-day delivery an essential service. 
• 55% of UK shoppers now require specific, two-hour time slots for their deliveries. 
• Returns policies are also a crucial factor, with 43% of shoppers indicating that this feature is a priority.

As for your exact target market, the choice will depend on the type of services you plan to offer and the available vehicles you have in your fleet. 

As a courier company, you can target local businesses, e-commerce sellers, or individuals needing same-day delivery. You can also niche down by tapping into industries that require specialised handling, like medical supplies or hazardous materials. 

Step 2: Create a Business Plan

The second stage of starting a courier business is crafting a detailed business plan. This is an important phase for any business owner, as it can help uncover courier business opportunities, build an effective business strategy, and attract investors.

Although your courier business plan doesn’t have to follow strict rules, it’s advisable that it includes the following:

• An executive summary outlining your courier business, mission, and vision;
  
• A business description explaining your business model, legal structure, unique selling point, and ownership structure;
  
• A market analysis demonstrating insights you’ve gained from research, like trends, market size, competitors, target customers, and more;
  
• A services section, which describes how you plan to deliver packages, what types of items you’ll be delivering, and details on delivery speed;
  
• An operations plan, including information on logistics, package pick-up options, or partnerships with delivery networks;
  
• A management section explaining who your key members are, what type of training you offer, and practices for guaranteeing compliance with regulations;
  
• A marketing and sales page presenting your marketing strategy and methods for attracting clients;
  
• A financial plan featuring startup costs, funding requirements, pricing, and revenue projections.

Ideally, your goal is to be as detailed as possible. For example, in the business description section, mention whether you’ll be operating as a sole trader, limited company, or franchise, along with other information. 

Under the services section, apart from describing the type of service you’ll be offering, state whether you’ll be focusing on local, national, or international courier services. 

When making your financial projections, make a complete list of all startup expenses, including vehicles, fuel costs, storage equipment, insurance, marketing, and any other resources or assets you may require to run your business. Estimate your revenue considering delivery fees, target customers, and room for growth. 

Step 3: Register Your Business and Address Legal Requirements

A crucial part of setting up a courier business in the UK is going through the process of business registration.

Once you’ve chosen a business structure, you’ll need to register as a sole trader with HMRC  and become a self-employed courier or set up a limited company with Companies House to obtain a business license.

Most self-employed couriers choose this path as managing their finances will be a lot simpler. However, the downside is that you’ll be accountable for any business debts and liabilities that your courier company accumulates. As a sole trader, you’ll also need to file your tax returns and pay tax and national insurance on your earnings. 

On the other hand, operating as a limited company means that your personal and business finances are separate, offering protection for any personal assets. As a limited company, you’ll need to open a separate business bank account to make a distinction between business and personal finances. 

Also, keep in mind that depending on your turnover, you may be obliged to register for VAT. Currently, you must register for VAT in the UK if your taxable turnover exceeds £90,000. 

Obtain Necessary Business Insurance

Insurance coverage is another big part of running an uninterrupted courier business and staying protected in case of unforeseen situations. 

A lot of insurance companies offer dedicated courier insurance – a combination of different policies designed to shield couriers transporting goods. 

In most cases, the policies included in courier insurance are:

• Hire and reward insurance – a must-have insurance policy that enables couriers to transport goods in exchange for money. This type of insurance can also provide vehicle protection, public liability cover, and goods in transit. 
  
• Goods in transit insurance – offers protection for the items you’re transporting.
  
• Public liability insurance – protects couriers in case a driver accidentally injures someone or damages their property while delivering goods.
  
• CMR insurance – a requirement for couriers offering cross-border deliveries covered by the Convention on the Contract for the International Carriage of Goods by Road. 

But beware – a courier insurance policy can be an expensive asset. Given the fact that couriers deliver items to multiple drop-offs, operate with vehicles, and cover large distances, there are risks of failing to deliver on time, participating in accidents on unfamiliar roads, and more.

From the list above, only hire and reward insurance is obligatory. The remaining policies are recommended, depending on the type of work you perform, the type of goods you’re transporting, and other requirements. 

Comply with Regulations

Don’t forget to research the legal aspects of running a courtier business and performing specific services. 

For instance, if you use goods vehicles above a certain weight, you’ll need to obtain a Goods Vehicle Operator’s licence. Those transporting goods in a lorry, van, or other motor vehicle need a licence if the maximum weight that the vehicle can have at any one time exceeds 3,500 kg or if the unladen weight is more than 1,525 kg.

On the other hand, if you’re transporting hazardous items or dangerous goods, you and your drivers will need to go through specialised training and certification for handling dangerous items. The integrationally agreed rules for transporting such items by road, for example, are covered by ADR. 

The requirements are different for transporting hazardous items by air and sea. This means that for every service you offer and every type of vehicle you operate, it’s crucial to confirm licensing requirements and to always adhere to vehicle maintenance and road safety standards. 

Step 4: Set Up Your Courier Operations

It’s now time to move on to the most interesting part – setting up your courier delivery business’s operations. 

Acquire Vehicles

To ensure your courier company runs smoothly, you’ll need a promising and reliable delivery. The best way to achieve this and guarantee delivery efficiency is to invest in the right vehicles for your courier fleet. 

Naturally, the vehicle types and models in your fleet will be directly influenced by the services you’ll be providing. For instance, green couriers aren’t likely to operate using high-carbon-emitting vans.

Here are some popular options you can explore and what you need to know about each.

Vans 

Vans rank first on the list of top-used transportation methods in the UK in the courier industry. Their size enables plenty of storage space for small and large parcels, while their versatility allows them to turn into specialist delivery vehicles if needed. 

If you’re using vans for making deliveries, here’s what you need to know:

• Make sure your delivery drivers are abiding by speed limits.
  
• Familiarise yourself with the Transport Act 1968 and parking regulations in different areas.
  
• Ensure that drivers operating vans with a Maximum Authorised Mass of up to 3,500 kg have a standard driving licence (category B). For those with licenses issued after the 1st of January 1997, additional tests for vans ranging from 3,500 kg and 7,500 kg may be required.
  
• Taxes and MOT certification – all vans must be taxed annually, and if there are any vehicles over three years old – an annual MOT test is a requirement.
  
• Insurance – courier van insurance is mandatory as a minimum.

Also, consider the prices of acquiring and maintaining your vans. At the time of writing, used vans in platforms such as Motorway.co.uk range between £7,500 and £10,000, commercial van insurance spans from £1,000 to £1,500 annually, while the average MOT cost is around £60 per year.

Bicycles or electric bikes

Bikes are perfect for couriers covering large cities as they offer speed in efficiency in traffic jams, decreasing delivery times, especially in peak travel hours. They’re affordable as they don’t require petrol and also come with the lowest extra costs for insurance, tax, and maintenance. 

In terms of regulations, make sure that your courier bikes have working lights, reflectors, and brakes. E-bikes that follow Electrically Assisted Pedal Cycle (EAPC) regulations don’t need to be licensed, insured, or registered. 

Motorcycles  

Motorcycles are among the quickest solutions for deliveries and are a preferred choice for busy cities. 

If you choose this option, consider the following:

• Drivers must wear helmets to comply with government standards, while visors and goggles must comply with British Standard (with a BSI Kitemark).
  
• It’s mandatory that drivers have Compulsory Basic Training and a provisional category A licence.
  
• Motorcycles in operation must be registered with the DVLA and must be taxed on a yearly basis.
  
• Third-party insurance is required for any possible liabilities. Motorcycles over three years old must go through an MOT test every year. 

Compared to bikes, they can carry larger packages and can still avoid traffic jams and manoeuvre better. From an expense perspective, motorbikes are more affordable to maintain than vans or cars, with average petrol costs of £558 annually. 

Drones 

Although drones aren’t a trend in the UK’s courier industry yet, they’re likely to gain more attention given the convenience and speed they offer. 

To fly drones in the UK, you must have a registration – an Operator ID and Flyer ID (after passing a Theory Test). 

In addition, drones must only fly up to 120 metres high and must be at least 150 metres away from residential, recreational, commercial, and industrial areas. Moreover, it’s forbidden to fly a drone within 5 kilometres of an airport or airfield boundary. 

Invest in Technology

Another factor for setting up efficient logistics is investing in the right technology. Such solutions are also a great way to take some weight off your courier drivers and keep them motivated to perform your services. 

Courier companies are actively spending money on technology to minimise environmental concerns, deliver faster, and offer convenience. 

For example, GPS tracking systems are an incredible solution to guide drivers across unfamiliar UK roads. Some of the top vehicle tracking software providers include Verizon Connect, Samsara, and Teletrac Navman. 

AI software can now calculate the fastest routes between addresses. Meanwhile, automated sorting facilities can eliminate the need for human workers when processing packages. 

Explore different options that can help you streamline operations, track deliveries, and manage drives. Where possible, find out what solutions your competitors are using and what tools are currently trending in the market. 

Establish a Pricing Structure

Being your own boss and running your own courier business also means you’ll have to make decisions related to pricing. 

When choosing a delivery service, nearly 70% of UK consumers admit that cost is the most important factor. 

One of the best ways to get an idea of market prices is to place orders with other courier businesses in your area. Although you should aim to offer competitive rates, consider factors like delivery distance, speed, and package size when creating your pricing structures.

Try to be as flexible as possible and consider offering flat rates, distance-based rates, weight-based pricing, subscription plans, and even on-demand premium rates. 

Step 5: Accept Payments and Manage Finances

When offering business courier delivery services, having a smooth, secure, and reliable payment system is just as crucial as delivering packages on time.

Modern customers, no matter whether they’re small businesses or individual senders, expect quick, flexible, and cashless payment options. The days of “cash on delivery” are slowly being replaced by payments via mobile phones, online invoicing, and contactless card transactions. 

For couriers, adopting the right payment solutions can help get paid instantly and reduce late payments, boost credibility, make record-keeping simpler, and most importantly – support multiple services and delivery models. 

Some of the suitable payment options for UK courier businesses include:

• Portable card machines or Mobile POS systems – perfect for on-the-go couriers who deliver door-to-door, allowing debit, credit, and contactless payment methods. These systems are ideal for couriers who offer same-day deliveries and one-off deliveries as they enable quick transactions, less cash handling, and instant receipts.
  
• Unattended POS systems – suitable for those operating at drop-off kiosks, parcel lockers, or collection hubs. These self-service payment terminals eliminate the need for staff and are great for 24/7 parcel drop-off or return locations.
  
• Online payments and invoicing – recommended for courier businesses targeting other companies or e-commerce retailers. Invoices, bank transfers, and payment links make the most sense here.
  
• Subscription or account billing – if you offer regular weekly or monthly services, a subscription-style payment model can make a difference. Local retailers, florists, pharmacies, or meal-delivery clients often prefer this type of payment system. 

Make sure you provide multiple options, including bank transfers, credit and debit cards, and direct billing for corporate clients to meet the needs of different customer groups. 

Use accounting software to track income, expenses, and outstanding invoices.

Automate payment reminders for overdue bills.

Step 6: Market Your Courier Business

Once you’ve laid the foundations of your courier business, it’s time to consider marketing and sales. 

Craft an effective marketing strategy by prioritising the following:

• Build an online presence – create a professional website with service details, pricing, and integrated online payment options. Invest in SEO and Google Ads to make your courier brand visible and recognisable and to attract businesses and individuals searching for courier services. Be active on social media channels that are preferred by your target customers and share stories about your brand, happy customers, delivery information, and more. For those targeting individuals, Instagram and Facebook are ideal, while couriers seeking business clients should concentrate on building a presence on channels like LinkedIn.
  
• Network locally – partner with e-commerce businesses, retailers, and other local companies needing delivery services. Attend local business events to build relationships and promote your services.
  
• Leverage customer reviews – encourage satisfied customers to leave reviews on Google and social media. Use testimonials to build trust and attract more clients.

The truth is that a successful marketing strategy for one courier won’t deliver the same results for another. It’s all about understanding your specific market and target audience, and ensuring that you’re putting in place practices that will help you position yourself in front of these groups as an expert and authority in your field. 

Step 7: Deliver Excellent Customer Service

To attract and retain more customers, offering outstanding customer service is absolutely mandatory. 

First, prioritise reliability and make sure you’re delivering packages on time and in perfect condition. Nothing can ruin your reputation more than a negative review of a client who is displeased with your service. In case you have parcels that won’t be delivered on time, make sure you communicate proactively with customers about the delay or the issue.

Offering customised solutions can also make a difference. 

Tailor services for specific client needs, such as recurring deliveries or after-hours availability. Provide flexible options like drop-off points or contactless delivery.

For example, in the UK, delivery passes are quickly gaining traction, particularly among younger generations. Research shows that around 63% of Gen Z and millennial shoppers now have an active delivery pass, drawn by perks such as:

• Free shipping;
• Priority delivery;
• Flexibility to choose convenient delivery slots that fit their schedules.

Finally, build a loyal customer base to ensure that your new courier business quickly grows and scales. Create loyalty programs or discounted rates for repeat clients. Make sure your communication is flawless to ensure high customer satisfaction. 

Step 8: Scale and Expand Your Business

Finally, explore different ways to scale and expand your business, whether it will be by growing your team and services, or concentrating on new markets. 

Expand Your Fleet and Team

If you notice that demand for your services is rising, expand your fleet and hire additional drivers. Train staff to perform specialised courier services and maintain high service standards and don’t forget to keep an eye on market trends, regulations, and opportunities.

For example, zero-hour contract workers are a dominant theme in the UK’s courier space.   

On the other hand, when it comes to courier fleets, electric vehicles represent the future of sustainable delivery services, where battery-powered vans can minimise carbon emissions in British cities. For instance, London’s Ultra Low Emission Zone encourages courier businesses to choose electric fleets. In addition, the government offers support for companies transitioning to cleaner transport options.

Explore New Markets

At the start of your business journey, starting slow and small is recommended. However, as you build confidence in your services and your drivers, you can explore new markets.

In the UK, London holds the largest share of the courier and delivery market geographically, with a 20% market share and 3,101 courier companies, followed by Manchester with 6% market share and 967 companies. 

You can explore other UK locations or even consider expanding internationally. However, keep in mind that international delivery regulations have become more strict after Brexit, meaning that you’ll have to perform detailed research to ensure you’re complying with all requirements.

Post-Brexit, Certificates of Origin have become essential paperwork for UK exporters, helping goods move smoothly through international trade agreements.

Conclusion

Overall, starting a courier business in the UK can seem like a challenging endeavour at first. Luckily, with the right step-by-step process and information on legal aspects and regulations, you can successfully enter a competitive, yet rewarding industry. 

With promising growth projections due to a thriving e-commerce sector, the courier sector can offer attractive opportunities. Enter this space with confidence, applying all that you’ve learned in this guide. 

Frequently Asked Questions

What’s the ideal target audience for a new courier business in the UK?

The right answer depends on the services you can offer. A lot of companies focus on marketing a courier service for small business owners, large e-commerce retailers, or companies in niche sectors.

How can I find customers for my courier business?

Start by targeting local small businesses, online retailers, and food delivery companies that regularly need transport services. Use flyers, social media, local partnerships, and Google Ads to build awareness. Listing on delivery platforms or collaborating with e-commerce stores can also generate steady work.

How can I make my courier business stand out from competitors?

Focus on speed, reliability, and customer service. Offering real-time tracking, flexible delivery options, transparent pricing, and answering customer inquiries promptly can set you apart. You can also stand out by using eco-friendly vehicles, investing in fleet management software, and integrating cashless payment systems to create a seamless customer experience.