How to Start a Cargo Van Business: A Comprehensive Guide for Beginners

Are you a business owner facing a boom in your delivery orders but failing to handle them with your fleet of delivery vehicles, including two-wheelers or sedan-style cars?

Do you find it hard to increase your deliveries per journey due to low payload capacity, space constraints, weak engines, and lower horsepower?

If yes, it’s time to consider cargo vans.  

Cargo delivery vans form an ideal fit, especially for small transportation businesses as they have a considerable load capacity, are easy to drive and park on busy streets, and cost a fraction of a box truck, making them affordable. 

If you are wondering how to start a cargo van business, this blog is for you. It guides you through the steps involved, the checklist you must follow, and the benefits of this business.

Steps to Start a Successful Cargo Van Business

To start a cargo van business, you can follow these steps:

1. Develop a solid business plan

Starting a new business requires planning things such as banking/funding options, licenses and permits, and insurance policies, as well as keeping everything well-managed.

A proper cargo van business plan will help you turn thoughts into action at the right time. You can include the following things in your business plan:

• Keeping your budgets in check.
• Identifying your competitors and target market.
• Strategic marketing techniques and business goals.
• Pricing strategy as per your requirement.
• Operational plans and challenges that can come along.
• Skills and expertise required in your delivery drivers or other team members.

2. Acquire the right cargo van

As every business is different, the type of van you would require depends on the number of packages, weight, and dimensions of parcels you would be carrying. Budget is another factor when it comes to buying a van, depending on your business type.

Depending on all the above factors and the features you need in your van, you can opt for a top cargo van that gives the best result within the budget. You can choose one from the link or visit the nearest dealer. As discussed earlier, you can ask the dealer about upfitting your van with the required parts during the purchase process.

3. Register your cargo van business

Before registering your cargo van business, you may need to come up with a business name and logo that you like based on their availability (keeping your name and logo unique will save you from any sort of copyright infringement). You can then have a proper website and list your cargo van delivery business on Google so that people can find you.

Depending on your requirements, you can register your van delivery business entity as an LLC, corporation, or partnership. A lawyer will help you set up the entity and explain more about the usage, terms, and conditions. 

You may also want to open a banking account for your cargo van delivery business. It will help you keep your personal and business finances separate, give credibility to your business, help you organize things, and pay taxes on time.

4. Obtain necessary licenses and insurance

Although you don’t need a CDL (Commercial Driver’s License) for your van business, you may need to get the required permits, licenses, and cargo insurance coverage plan based on your business type (flower delivery, courier, or any other transportation business).

For instance, if you offer moving services, you may need a license depending on state and local laws. A lawyer can help you understand licensing requirements and cargo insurance so you acquire the appropriate license to start delivering fantastic customer experiences.

Moreover, you must also have commercial auto liability insurance (often called commercial auto insurance) to cover accidental injuries and property damage.

5. Brand and market your delivery services

Branding helps your business stand out and attract customers. A clear and enticing brand voice builds trust and awareness, making it easier for potential clients to recognize your services. Steps for branding and marketing include:

• Create a strong brand identity: Design a logo, website, and social media presence that resonates with your target audience.
• Vehicle branding: Consider wrapping your van with your company logo and contact information to increase visibility.
• Marketing strategy: Use digital marketing strategies such as SEO, Google Ads, and social media campaigns to attract customers actively searching for delivery services.

Strong branding and effective marketing are key to building credibility and growing your customer base.

6. Optimize operations with delivery management tools

As your business grows, managing deliveries manually can become overwhelming. To simplify operations and enhance efficiency, consider using delivery management software like Upper. These tools offer features like:

• Route optimization: Efficiently plan the best routes to minimize travel time and fuel costs.
• Real-time tracking: Keep an eye on your drivers and update customers with accurate delivery times.
• Proof of delivery: Collect digital signatures, photos, or notes upon delivery to ensure accountability and professionalism.

Using delivery management tools can significantly improve your overall operational efficiency, reduce costs, and even improve the customer experience.

A Comprehensive Checklist for Launching Your Cargo Van Business

Now that you’re familiar with the essential steps to kickstart your cargo van business, having a comprehensive checklist can significantly simplify the process for you. 

Below is a detailed checklist that you can refer to when you’re ready to launch your cargo van business:

1. Define Your business model

Identify the type of cargo van business you want to start (e.g., delivery services, moving cargo van company, mobile services).
Determine your target market and understand their needs and preferences.

2. Develop a business plan

Create a detailed business plan that outlines your executive summary that summarizes it. Moreover, it should list your goals, strategies, financial projections, and operational plans.
Conduct market research to understand your competitors, their fleet sizes, market trends, and customer demands,
Your business plan must also include identifying potential customer segments, understanding their delivery needs, and noting them down.
Understand the barriers to entry and regulatory requirements.

3. Secure financing

Calculate your startup costs, including vehicle purchase or leasing, cargo insurance, marketing, operating expenses, licenses, and permits.
Explore funding options such as loans, grants, investors, or personal savings to finance your business.

If you’re curious about the startup costs of starting your cargo van business, check out this video. It’ll give you a clear idea of what to expect and help you secure the financing you need to get started.

4. Choose the right cargo van

Research and select a suitable cargo van based on your business requirements, including size, capacity, fuel efficiency, and features.
When deciding whether to buy the van or lease/rent it, consider your budget, long-term plans, and financing options.
Invest in necessary equipment (e.g., dollies, straps, blankets).

5. Register your business

Choose a unique and catchy business name, and register your business entity (e.g., LLC, corporation) with the relevant operating authority.
Obtain the necessary licenses, including the general business license, applicable, and cargo or liability insurance certificates. This will help you operate your cargo van business while preventing legal issues.

6. Hire and train staff

Recruit skilled and reliable staff, such as drivers, dispatchers, and administrative personnel, to support your cargo van operation.
Conduct background checks and screening processes.
Provide comprehensive training and ongoing support to ensure your team is well-prepared and aligned with your business goals.

7. Set up operational systems

Establish standard operating procedures for pickup and delivery.
Implement efficient operational systems for route planning, scheduling, dispatching, and customer communication.
Develop protocols for handling and securing cargo.

8. Invest in technology and software

Invest in route optimization and dispatch management software
Implement GPS tracking and vehicle monitoring systems.
Set up invoicing and accounting systems.

9. Establish partnerships and networks

Build strong relationships with suppliers, vendors, and industry partners to access resources and support for your business.
Network with other businesses, associations, and organizations to explore collaboration opportunities and expand your reach.

10. Brand and market your business

Develop a strong brand identity with a memorable logo, professional website, marketing materials, and promotional strategies.
Define your unique value proposition and key selling points to differentiate your business in the market.
Develop a well-defined marketing plan to promote your cargo van services to your target audience.
Utilize a mix of online strategies (e.g., social media, website, SEO) and offline tactics (e.g., networking events, local advertising) to reach and attract target customers.

Key Benefits of Starting a Cargo Van Delivery Business

If you are new to the cargo van business, you might be amazed to see that they can help you in numerous ways. The reason why local businesses are switching to cargo van delivery is its capability to lower the hassle and boost revenue. Here are the 3 main benefits.

1. More number of delivery orders

A cargo van is your go-to option as it allows you to manage higher order volume and raise your total deliveries. There are three key ways it helps you with this.

• Offers more space: The main purpose of cargo vans is to carry a huge amount of packages. So, you can add more deliveries if you have a plethora of orders, but are unable to fit them in the delivery vehicles due to their size, you can definitely go for sprinter vans.
• Offers more payload capacity: Along with more space, a cargo van can also deliver heavier parcels due to a huge payload capacity, unlike normal cargo vans or box trucks.
• Offers area for lengthy packages: Although vans offer appropriate spaces for long packages, you need a cargo van if you have to fit large building materials like plasterboards.

2. Space to fit in multiple packages

A cargo van is normally a large box on wheels. Though slightly different from box trucks, people sometimes use cargo vans and box trucks interchangeably. 

These vans offer ample space to carry various items, including packages, tables/chairs/furniture, equipment/tools, and food items. The cargo space at the back of the van is measured in cubic feet, and it has a significant load capacity. You can choose a model from manufacturers that provide different roof heights and wheelbase options based on your requirements.

As cargo vans are supposed to be spacious to carry more packages, they only come with two front seats. However, if you require more workers to fulfill your business needs, you can opt for other models that offer seating upgrades, such as a passenger van.

You can also upfit your cargo vans through service professionals or check if your manufacturer provides upfitting services during purchase. A van upfit is an upgrade that makes it versatile and involves installing customized accessories and parts without altering the van’s design. It includes:

• Shelves 
• Bins
• Refrigeration 
• Coolers
• Wall hooks 
• Wall pockets
• Hand-washing stations
• Ladders
• Racks, drawers, and cabinets
• Cargo tie-downs

3. Increases delivery speed and gives branding opportunity

A cargo van can help you improve your delivery time and make your customers happy without the stress of a speeding ticket.

• Compared to freight trucks, cargo vans are smaller and easier to move. So you can drive across your routes quite conveniently. Moreover, driving a cargo van doesn’t require a commercial driver’s license (CDL) and requires less parking space. So, it is better than a giant truck because it increases delivery speed. The Sprinter van business model is prevalent for its speed and efficiency.
• A vehicle with more horsepower offers more speed to carry heavier payloads. A cargo van can be your best bet if you have been struggling to carry heavy packages on a vehicle that slows down.
• While you can glam up your new cargo van with graphics, taking advantage of the blank space on the sides can increase your brand’s awareness. Such advertising on your cargo vans can target the public eye in the locality.
• According to the American Trucking Association (ATA), a vehicle wrap on a local delivery van is recorded to make around 16 million impressions yearly. So, cargo vans can also give you a good return by simply moving around the roads and promoting your business.

What Can You Use a Cargo Van Delivery Business for?

Businesses that require to deliver or transport highly loaded and multiple packages can use a cargo van to fulfill these demands. Cargo vans are similar to passenger vans, but they have large back doors that help delivery drivers to load and unload packages. So, it is also crucial to hire professional delivery drivers and give them the training to perform their jobs with ease and expertise.

Depending on your preference and market demand, you can use a cargo van business for services including:

• Deliver Furniture (or moving services)
• Last-mile delivery services
• Catering services
• Flower delivery
• Medical transports
• Mobile pet grooming business
• HVAC technicians
• Cleaning services
• Mobile auto detailers

Recommended Tools and Resources for Cargo Van Businesses

Starting a cargo van business involves more than just having a vehicle and customers. To set yourself up for success, it’s essential to leverage the right tools and resources. 

Here are some recommendations to help you get started.

Upper Route Planner for efficient route optimization

Managing multiple deliveries can be time-consuming and burdening without the right tools. That’s where Upper route management software comes in handy. 

Upper is designed to help you plan the most efficient routes, saving you time and fuel costs. 

• You can easily import your delivery stops, and the software will optimize the best route for you. This means less time driving and more time delivering, which directly impacts your business’s bottom line.
• With features like real-time driver tracking, proof of delivery, and automatic customer notifications, you can ensure your deliveries are on time and your customers are happy.

Upper is simple to use and requires no advanced technical skills, making it perfect for cargo van businesses of any size. Plus, it scales as your business grows.

Online training courses and industry certifications

Building a successful cargo van business isn’t just about getting a van and starting deliveries. You can benefit from learning new skills that can improve your service and give you a competitive edge. 

Many online platforms offer training courses and industry certifications that focus on logistics, delivery management, customer service, and business operations.

Here are some recommended platforms and courses:

• Coursera: Offers courses on logistics and supply chain management from top universities. You can learn at your own pace and earn certificates to boost your credibility.
• Udemy: Features a wide variety of courses related to delivery management, customer service, and business fundamentals. Many are budget-friendly and taught by industry experts.
• LinkedIn Learning: Provides courses focused on enhancing business skills, including project management and customer service. You can also earn certificates to showcase your skills on your LinkedIn profile.

These courses help you stay up-to-date with the latest industry practices and ensure you’re providing top-notch service. Certifications can also make you look more credible in the eyes of your customers.

Conclusion

Since online orders are increasing, you can take advantage of this time and make money by starting a cargo van business. Plus, getting extra cash for a growing business isn’t bad! On top of that, if you already have sprinter vans, you can follow the steps and begin your journey immediately! Although it may take some time to set up and get going on your first order, you need to take the first step toward a profitable business!

While you would be busy making your business plan and strategy that ensures your growth, you can leave the extra work of route planning for your cargo van business to a reliable route planning tool like Upper! With features like optimizing routes, one-click dispatch, API integration, and many others, you don’t need to waste another minute. Get Upper Route Planner as your business buddy and enhance the quality of your buying experience for your customers. Try the 7 days free trial today.