Courier Business - Help Needed

[mrxtcz]

Hi guys,

This is my first time posting on this forum.

I have an idea, and i would like some insight to see if this would be worth my time and effort.

Im 22. I have a full time job. I live away from home.

I have $10,000 which i want to use to start making more money.

My idea:

Purchase a post 2000 year model van
(Mitsubishi Express 01-05)

The van will then be working for Go Logistics.

I will need to have a driver to work for me to work for Go Logisitcs ( Can you please provide me with the right wording here please, Contractor and Sub-Contractor? )

The driver will be paid an award hourly rate of $20 - $25/ph

I need to factor in a few things.

My friend currently works for Go Logistics, earning anywhere between $1200 - $1600 gross per week.

In my situation when i get paid the $1200 - $1600 per week, do i put money aside for my tax/gst(?) first or should i pay the driver first?

Now will the driver be paid a gross as a sub-contractor or should i have him/her as an employee of my business?

If the driver is a sub-contractor, does that mean i only have to pay him/her a gross amount and then they pay their own taxes etc ?

If the driver is an employee, that must mean i pay his PAYG tax and also super?

I know this is a little confusing, i have tried to word it as unscrambled as possible.

In regards to fuel, I will be paying for fuel, the person will just be employed to drive.
I will also need to put money aside for regular services on the van
Insurance would also be needed

In a rough estimate will this be profitable, or is this just a pipe dream?

Thank you in advance,

Vik.

[Linda Enever]

Vik I can see it working but when working with courier companies the hard thing is finding drivers that are reliable do you know of someone? Or are you looking to hire someone you don't know?

[mrxtcz]

Hi Linda,

I have done my research in regards to hiring.

I have a few people in mind who are close family associates who wouldn't mind working. And i have also looked through Gumtree/Classifieds and have seen a fair number of "Driver available" posts. Who i have contacted myself and researched what their expectations are from the job, also wage expectations and working hours.

Most replied back with $20-$25 per hour
Flexible hours
No penalty rates
Fuel provided by myself

[Linda Enever]

Cool and do you have a backup plan if they are unable to do the run?

[mrxtcz]

The backup plan for days when the driver cannot make the run would be that he doesnt get paid. That would be fair, i would have a back up driver just incase something does happen. Back up driver being a family friend etc (they have already agreed to it)

[Linda Enever]

Great sound like you have the staff area covered have you spoken to a business mentor/advisor or an accountant yet?

They would be my other key advise points

[AshleyWhiteBusiness]

Nice idea. It is nice to have family members at your side when your business is growing. Just take note that the bigger it grows, the more staff you will gonna need. For drivers, oit is important to hire people that are responsible and trustworthy. This kind of workforce is where the majority of movements will come from. In hiring new drivers, I suggest you pick up somebody who is professional and will not gonna leave you in the edge.

Goodluck.

[Dean@PeekWebDesign]

That's awesome that you're looking to do this and you're only 22! The earlier the better for taking such a risk in my opinion (I'm assuming you don't have kids or anything). I'm not clear on who Go Logistics are to you? You will be a sub-contractor to them? Have you registered your business? As to your employee/sub-contractor I think there are some issues with having someone working for you that is effectively an employee but not giving them their entitlements to e.g. sick leave etc. They certainly sound like they would be an employee. Also - if they are your employee - who are they to Go Logistics? There are all sorts of agency implications here - imagine he damages some goods - who is liable? Go Logistics, you or the driver? It's not as straightforward as you might think.

[JakeThomas]

Hi Vik,

My understanding of it is - if you are going to be your subcontractors major source of income, then the aren't treated as subcontractors, but employees and you are therefore required to pay their tax and superannuation. (And if you try and get around it now, it will come back to bite you in years to come).

I've just roughly gone over the figures on paper here, you wouldn't be making enough profit to justify the investment or turning this into a business.

The other thing to remember as well is, the reason the "owner / operator" model works on Go Logistics is because drivers are encouraged to pick up as many parcels as possible in a short period of time. If your drivers are being paid by the hour, they don't have this motivation. (I use Go Logistics for about 25% of my deliveries. They are literally IN AND OUT!!)

Overall, I don't think this idea will work, BUT the fact you are even thinking about this shows you have or are developing a business mind. The biggest key to success is knowing what ideas to invest your money in and what ideas not to.

[AshleyWhiteBusiness]

The biggest key to success is knowing what ideas to invest your money in and what ideas not to.

Yeah. That is why proper business research is important.