Package delivery businesses have become extremely popular over the past five years especially as companies like Amazon have taken to using third-party contractors to provide package delivery. The vast majority of package delivery services typically have low startup costs given the fact that the largest expense in developing these businesses is specific for the acquisition of delivery vehicles. In most cases, entrepreneurs and start new package delivery services typically seek to lease these vehicles in order to reduce their upfront expenditures.
As of most types of vehicle leases, a capital cost reduction is applied at the onset of operations, but this is usually a fraction of the cost that is normally associated with a down payment for a new vehicle. The gross margins that are generated by package delivery services are very high. One of the things that concerns most people when developing these types of businesses is that automation will eventually take over this industry, but this is not anticipated for at least another 15 to 20 years. Autonomous vehicles have begun to enter the market, but they are still very much in their nascent stage, and as such, this is a very limited risk at this time. Many package delivery services will continue to be extremely profitable and very lucrative for their owners moving forward.
There are numerous considerations that must be taken into account when an individual is learning how to start a package delivery service. For most, a qualified certified public accountant as well as an attorney should be hired in order to ensure that the business is able to appropriately secure all the necessary license to operate in this capacity. The US Department of Transportation as well as state-based departments of transportation always require that a numerous licenses are issued not only to the owner of the business but also to the delivery drivers. Each vehicle must be also be properly registered with federal and state government agencies especially if the business is going to be conducting a substantial amount of interstate commerce. However, these licenses are pretty straightforward to get in the paperwork required is considered a moderate. Most attorneys can assist an individual entrepreneur that is looking to start a new package delivery service with acquiring the necessary paperwork, filing the necessary documentation, and paying the requisite fees associated with launching this type of business.
As it relates to corporate structure, the vast majority of small businesses these days are started did by individual entrepreneurs that usually use a single-member limited liability company or S corporation. As always, a qualified certified public accountant should be retained in order to determine which corporate structure is most appropriate for this type of business. Each type of corporate organization whether it’s an S corporation, limited liability company, regular corporation, limited partnership, or related entity has its advantages and disadvantages. Additionally, each industry has its own issues as it pertains to overall legal liability and as such a qualified attorney in conjunction with a certified public accountant can ensure that the business is properly structured so that any issues down the road will be mitigated. The cost associated with developing a new corporation vary state to state but usually it’s in the $150 to $500 range. It should be also noted that unless the owner intends to use their address as their principal place of business than a registered agent may be hired in order to collect any official notices and documentation from state and federal government agencies. The cost on an annualized basis for registered agent typically range anywhere from $50 to $100.
Package delivery services always require significant number of employees to render services to businesses and the general public. These employees typically have a cost of anywhere from $20,000 to $50,000 a year depending on how much driving there doing. Usually, package delivery services that operate in a standard capacity can expect that they will have to pay an annual salary of $30,000 to $40,000 a year in order to have competent drivers on staff. Beyond just the driving staff, a package delivery service also requires administrative assistants, package management staff, logistics management, and a bookkeeper. Generally, these employees typically also cost around $25,000 to $50,000 per year. Many package delivery services, in some cases, will have their drivers treated as independent contractors rather than as direct employees. This can save a significant amount of money as a relates to the payroll taxes associated with having an employee on staff. However, a CPA should be hired in order to determine whether or not an individual can be considered as an independent contractor. There have been instances where income is reclassified as W-2 income rather than than independently contracted income. This is in a gray area and only a qualified accountant should be used to make this determination.
Returning to the capital structure of a business, package delivery services are again able to be started with a investment ranging anywhere from $20,000 to $100,000 depending on whether or not the vehicles are going to be leased or purchased. Expansion capital is readily available to most package delivery services once they achieve profitability. One of the nice things about this industry is that they are able to always generate income from the onset of operations. Companies like Amazon, UPS, FedEx, and the post office have all taken outsourcing certain portions of their ongoing delivery needs.
As such, the contracts that can be acquired to render the services immediately once a vehicle is acquired and licenses are required is significant. These businesses can readily expand by simply acquiring additional vehicles as well as hiring additional drivers. Banks, financial institutions, and private investors are all keen to provide the necessary capital in order to get these businesses off the ground. The return on investment is substantial from a capital expenditure standpoint. The marketing costs associated with these types of businesses usually considered to be minimal. Most banks will require that a business plan is developed in order to showcase with the anticipated revenues of the business will be and that the company can satisfy all underlying debt obligations or lease obligations.
As it pertains to the marketing, this can be done somewhat on the minimal basis. The vast majority of these businesses are able to secure contracts even before they begin revenue-generating operations by enrolling themselves in standardized programs that instantaneously dispatch packages to be picked up and delivered to third parties. However, some package delivery services will maintain ongoing relationships with area courier services and moving companies in order to provide these services on ancillary basis. This can help with smoothing out revenues during times when the package delivery service moves a little bit more slowly such as summer. In busy holiday seasons, especially around Christmas, package delivery services operate near 100% capacity at all times. Most package delivery services will maintain a small website just to have a legitimize presence when people look up the business’s name.
It is also expected within this industry the companies like Uber, Lyft, and related ride sharing platforms will eventually integrate package delivery services into their operations. There are now numerous companies that all so provide food delivery services as part of their overall operation. This can be another one of the ways in which a package delivery service maximizes its return on investment. Again, one of the great things about the logistics industry is that there is a readily them large amount of business available that can be service at the onset of operations. This trend is expected to continue in perpetuity as more and more people to man on demand services like ride sharing, package delivery, and food delivery. Companies like GrubHub have dominated the market with the specialized types of services, and this presents a substantial opportunity for an entrepreneur that knows how to maximize the return on capital investments like delivery vehicles.
This is an exciting industry, and package delivery services are going to have a substantial resurgence over the next 20 years. As more and more people demand products and services immediately, these applications and services have become very popular. The access the capital is substantial, the gross margins are moderately high, the barriers to entry are low, and for seasoned entrepreneur this can be a very lucrative opportunity. As always, it is imperative that any entrepreneur that starts any business – whether it’s a package delivery service or related company – keeps a close eye on all cash flow given the fact that there can be a lag between the time the invoices are paid and the underlying expenses occur.
One of the most important things to first focus on when starting a new dialysis center is the type of capital that will be used in conjunction with the startup. One of the most important features to most people that are starting a new dialysis center is that they are able to acquire the equipment necessary to provide nephrology services to the general public either via a business loan or equipment lease. Given the very high expense of dialysis equipment, many people that are starting this type of business will typically turn to using leases rather than loans.
This creates a much cleaner balance sheet so that further growth via expansion capital can be readily obtained in the future. The startup costs are typically associated with the new dialysis center generally run anywhere from $250,000 to $1 million. It should also be noted that many startups of these types of businesses are done through private investment rather than the use of owner funds, leases, and business loans. It is important for the entrepreneur that is starting a new dialysis center to very closely monitor and track how they intend to use their startup capital given the fact that there are a substantial number of ongoing expenses that must be paid first before invoices for dialysis service are paid. Almost all dialysis centers receive a bulk of their money from private insurance companies, patient co-pays, as well as through Medicare and Medicaid. The capital structure of a new dialysis center can be determined by a certified public accountant or related professional. In fact, most entrepreneurs are thinking of getting this field typically will retain both a CPA as well as a qualified attorney to determine which laws are applicable and how the business should be structured.
As it relates to corporate structuring, most dialysis centers are usually started via a limited liability company or S designated corporation. However, there are some instances where a regular corporation is the more preferable method of developing this type of business. Only a certified public accountant and qualified business attorney should make the determination as to what corporate structure is most appropriate. Some states do have certain rules and regulations as a relates to medically focused and healthcare businesses. As such, a qualified attorney can make the determination as to what corporate structure is most appropriate and they can make the appropriate filings with the state. The cost associated with using an attorney or a CPA to complete a incorporation typically is around $500-$1000 depending on the work that is needed.
It should be noted that in many states a limited liability company must have an accompanying operating agreement that is submitted when a new corporation is filed. And it attorney can develop the operating agreement specific for dialysis center. This is especially important to note especially when they’re going to be a number of partners at the onset of operations. Now that all states allow for single-member limited liability companies, the operating agreement for these types of businesses is pretty straightforward. However, when there are going to be a number of partners involved especially when certain members are going put up capital while other members are going to provide services – this can get far more complicated. As such, a properly developed dialysis center operating agreement can reduce any of the potential risks that are associated with developing a business with a number of partners.
A number of employees also need to be hired at the onset of operations for any dialysis center. In the event that the owner-operator is not a nephrologist, and this business is going to have to hire a qualified medical director. This can be a very high expense as most medical directors have a minimal base salary of around $250,000. Additionally, if there are going to be a number of staff nephrologists than the owner can expect that they are going to spend at least $200,000-$300,000 per year per employee on base salaries. Many dialysis centers will provide their staff nephrologists with profit-sharing programs, health insurance packages, 401(k)s, and other benefits that are normally associated with providing medical services. There is currently a saturation of nephrologists in the market given the substantial amount of people within the United States that require dialysis. As such, it is relatively easy to source a new nephrologist that could potentially work at this dialysis center.
Beyond having staff nephrologist, these companies also require to have a number of specialty nurses on staff. Nurses typically have a yearly annual salary of $65,000-$100,000 depending on the specific market in which the business is going to be located. It should be noted that certain nurse practitioners that have extensive experience in the field of dialysis can be hired as well and typically have an annual salary of $150,000-$200,000. As with all types of employee planning, a thorough and well-developed employee handbook needs to be produced as well. This handbook not only showcases the procedures and protocols regarding each aspect of medical services rendered, but also provides the rules and regulations that guy just the general business operations. Each employee should review and sign this document in order to ensure that any legal liabilities from employment practices are kept to an absolute minimum. An attorney can also assist the new dialysis center with determining which liability insurance policies issued acquire including Workmen’s Compensation insurance. Beyond the medical staff, most dialysis centers also have extensive support staff that includes administrative assistants, scheduling managers, patient liaisons, as well as support staff for company executives. Generally, these individuals have salaries that range anywhere from $30,000-$75,000 depending on their experience and their role in the company. It is important to note that the most expensive thing about owning and operating a dialysis center is a substantial amount of skilled labor that is required.
Marketing a four dialysis centers pretty straightforward given the strong demand in most local and regional markets for the services. Owner-operators of dialysis centers typically have extensive relationships with area physicians including primary care doctors, other nephrologists, hematologists, and internal medicine physicians. In some cases, referrals may be required from these physicians in order to be able to provide dialysis centers services to patients. As such, the foremost way in which these businesses can be marketed is through ongoing extensive use of physician referrals. Many of the staff nephrologists that are employed by dialysis centers also have admitting hospital privileges at area hospitals and medical centers. As such, by retaining staff that already have extensive relationships with these entities – the ongoing costs relating to marketing can be reduced over time. Almost all dialysis centers also maintain a website that showcases the services rendered, insurance is accepted, hours of operation, and how to contact the dialysis center in order to make an appointment. In some cases, the company’s website will have a online portal where a appointment can be scheduled directly to the website. This can substantially reduce the cost of maintaining a customer service call center where patients need to interact with another human being. However, medical billing specialist should be available on staff in order to answer patient questions when they submit invoices to insurance or if there is an issue with reimbursement.
A qualified attorney should also be hired in order to ensure that the dialysis center means all the appropriate licensure not only with the federal government both state government agencies as well. There are a substantial number of licenses as well as regulatory permits are needed in order to operate a medical or health care facility. As such, ate an attorney that is very familiar with healthcare businesses will ensure that the business is operating within the letter of the lot all times. A certified public accountant or related professional can also assist the dialysis center with obtaining the licensure required by the federal government in order to receive reimbursement from Medicare and Medicaid programs.
Given that many people that are on dialysis often receive Medicare or Medicaid, it is imperative that these forms refill correctly so that reimbursement time is kept to an absolute minimum. One of the primary issues with owning a healthcare businesses that they typically have a lag between the time services rendered and the time that they get paid. Usually, this can be anywhere from 90 days to 120 days. As such, a substantial amount of working capital needs to be kept on hand in order to ensure that the employees and expenses a business can be paid while the company is waiting on its reimbursement.
The outlook for the dialysis center industry is tremendous. As more and more people from the baby boomer generation enter their later years and have kidney issues, the demand for dialysis and nephrology services is going to continue to increase significantly. As such, more and more of these companies are being started each day. One of the key things that can be done in order to remedy the risks associated with competition is by establishing numerous locations and having a streamlined methodology of ensuring that payment is acquired very quickly. In some cases, in order to reduce the risks associated with these businesses the industry as a whole has seen a number of people use outsourced medical billing companies in order to cost-effectively receive payment. It is expected that at least 500,000 people year are going to require dialysis within the next five years. As such, the industry outlook for the dialysis center business is tremendous.
One of the best things about these types of businesses is that they are wholly immune from negative changes in the economy given the fact that this is a medical business and people are going to get sick and require the services at any time. While the barriers to entry and start up costs are very high, once accomplished this creates a very strong degree of economic stability for these types of businesses. More and more people are turning to the specialty of nephrology in order to meet the anticipated demand over the next 5 to 25 years as people from the baby boomer generation continue to age. Any entrepreneur that has in the extensive understanding of the healthcare industry is in a strong position to receive the capital they need in order to develop these types of businesses.
Given the need by construction businesses, roll off container services are able to provide a very important service to contractors on an ongoing basis. One of the most important strengths of these businesses is that once they establish ongoing relationships with general contractors, subcontractors, real estate developers, and construction management companies – they are always able to remain profitable and cash flow positive in any economic climate. Any time construction is being performed, whether it is on a residential building, commercial building, or industrial building, these services are in demand. Almost all human municipalities and state governments have laws that dictate how construction refuse is disposed of from any specific work site. As such, roll off container services serve a very important function for these businesses as they can ensure that construction refuse is properly removed and dealt with in accordance with law. The barriers to entry for a new roll off container service or considered to be moderate. The startup cost typically range anywhere from $50,000 all the way up to $500,000 depending on the number of initial containers that will be provided to the general public. Most importantly, the underlying operating expenses of these businesses is considered to be moderate as well given that once the roll off container is dropped at the work site – there’s very little ongoing costs associated with operating these businesses.
As relates to weaknesses, in any of market there is going to be a number of other providers that render the service. Additionally, many contractors in real see developers have turned to developing a number of the services in-house. As such, the primary weakness faced by roll off container service is the ongoing competitive issues that these businesses face on a day-to-day basis. The operating costs are again are considered to be moderate.
Roll off container services, as it relates to opportunities, can quickly expand their operations by simply acquiring additional vehicles, furniture, fixtures, equipment, and roll off containers that are provided to the general public. These businesses can often expand by developing ongoing contractual relationships with municipal agencies, state agencies, military branches, real estate developers, and general contractors. This ensures a continued flow of orders on a weekly basis. All financial institutions are willing to provide any startup and expansion capital needed given that most all of this capital is typically allocated towards tangible assets. Some wants trimmers will often take to acquiring third-party roll off container services in order to integrate their customer base and operations into their existing infrastructure.
For threats, there is really nothing is going to impact the way that these companies conduct their operations. Construction is always going to occur and the demand for the proper removal of construction refuse will remain strong in most economic climates. During times of economic recession, a roll off container service may have a slight decline in the revenues given that construction may wane slightly. This is also true during times of very high interest rates. However, outside of these threats there is really nothing that would impact the way that these companies conduct their operations. This is going to be one of the businesses that remains in profitable operation in perpetuity. However, some aspects of automation technology may impact the way that these companies conduct business in the future.