How To Start a Cargo Van Business: 9 Steps to Success

Launching a new business is both exciting and stressful. One minute you’re up and it’s all going your way, the next minute you’re back at square one again! For many people, a cargo van business is a great first business to own — you can make decent money quite quickly, while learning the ins and outs of being a business owner. 

This step-by-step guide from Routific will help you navigate the startup process, whether you're in the initial research phase or ready to hit the road.

Step 1: Define your business concept

Starting a new business is exciting, but take some time up front to slow down and think through your business idea clearly. It's guaranteed to save you headaches later, and will help you spot opportunities you might miss if you just rush into action.

Business owners can’t afford to act impulsively. 

What should you be thinking about?

1. Identify your niche: Decide on what specific services you want to offer (e.g. local moving services vs delivery services vs hauling services).
2. Conduct market research: Understand local demand, competition, and potential customers. Look for areas of high demand in your region. 
3. Set clear goals: Define short-term and long-term objectives for your small business.

Step 2: Develop a business plan

Anyone can have a good business idea, but turning that idea into reality takes planning. Think of your business plan as a map that shows you where you want to go and how to get there. It doesn't have to be perfect, but it must give you a clear direction.

Here’s what to include in your business plan:

1. Executive summary: Provide an overview of your business concept and goals.
2. Market analysis: Detail your target market and competition.
3. Services offered: Describe your cargo van services in detail.
4. Marketing strategy: Outline plans to attract and retain customers, including social media and SEO tactics.
5. Financial projections: Estimate startup costs, pricing strategy, and revenue forecasts. Consider profit margins and cash flow.
6. Operational plan: Describe day-to-day operations, including how you'll manage real-time logistics.

💡Get started quickly with Routific’s free business plan template.

Step 3: Handle legal requirements

Nobody loves paperwork, but setting up your business properly from the start is the foundation for future success. The good news is that these steps are straightforward, and there are plenty of resources available to help you.

Here’s what to do:

1. Choose a business structure (e.g. a sole proprietorship, LLC, or corporation).
2. Register a name for your cargo van delivery business.
3. Get an Employer Identification Number (EIN) from the IRS.
4. Apply for necessary licenses and permits, including a business license and potentially a Commercial Driver's License (CDL).
5. Register for state and local taxes.
6. Check if you need to get operating authority from the Department of Transportation (DOT) for interstate operations.

Check out these resources for more information:

• The Small Business Administration Guide to Business Licenses and Permits
• The IRS Guide to Employer ID Numbers
• Your local public library will have links to more information. 

Step 4: Get financing

Starting a cargo van business shouldn’t break the bank, but you will need some money to get started. Whether you're using savings or looking for a loan, knowing your costs upfront will help you make smart choices about spending your startup money. 

If you’re currently employed, it’s worth keeping the day job while you’re still setting up. The startup phase often takes longer than people expect, and it’s good to have some income in the meantime. 

Here’s how to set up the financial basics of your cargo van business:

1. Calculate total startup expenses (van, equipment, insurance, licenses, etc.).
2. Explore financing options: personal savings, loans, investors, or crowdfunding.
3. Open a separate business bank account for effective cash flow management.

Check out these resources for more info:

• SBA Loans
• Crowdfunding Platforms: Kickstarter, Indiegogo

Here’s a useful video from cargo van business owner and YouTuber Tony Ruiz that offers a real sense of the startup costs and what you can make in your first year of operations: 

Step 5: Acquire your cargo van and equipment

Choosing a van is one of the most exciting parts of starting your business. While it's tempting to go for the newest and biggest delivery vehicles, remember that many successful businesses start with something modest and upgrade as they grow. Be thorough — the right cargo van is make or break in the beginning. 

• Research cargo van models: The Ford Transit, and Mercedes Sprinter van are both popular, but they’re not the only options. Check out Car and Driver’s detailed reviews for more info.
• Consider new, used, or leased vehicles. Factor in fuel efficiency when making your choice.
• Research the average load you’ll be carrying in the niche you have selected.
• Purchase any equipment you might need like dollies, straps, shelves, or a GPS system.

Cargo van vs box truck: which is better?

Let’s start with a simple question — why a cargo van and not a box truck?

Think of a cargo van as the perfect middle ground — it’s not too big, not too small. These vans are easy to drive and park, especially in tight city spaces where bigger trucks would struggle. Plus, they pack a surprising punch when it comes to carrying stuff.

On the other hand, a box truck is trickier to drive and park. But it can carry larger loads thanks to its straight-sided construction and rolling rear door. It’s also possible to get a box truck that can be refrigerated.

Depending on which van you pick, you can haul anywhere between 500 and 4,000 pounds of cargo, and some of the bigger vans can even tow up to five tons! That's plenty of muscle for most jobs. 

The best part? If your business takes off and you need something bigger later, you can always upgrade to a larger truck. 

Many successful transport companies started with just one cargo van and grew from there.

Here are some places to get more information:

• Check new and used prices at Kelley Blue Book
• Leasing vs renting vs buying

Step 6: Get insured

Don’t get on the road without the right insurance coverage! Think of it as a safety net that lets you focus on growing your business without worrying about losing everything if you’re in a crash or your vehicle is stolen. 

There are four types of insurance you need to research and understand. 

1. Commercial auto insurance to cover loss or damage to your vehicle.
2. General liability insurance to protect you from lawsuits. 
3. Cargo insurance to protect the goods you transport. 
4. Workers' compensation, if you hire delivery drivers or other employees. 

Getting the best insurance can be complicated, so it’s probably a good idea to work with an insurance broker to find the right coverage for your needs. 

Step 7: Develop your brand and marketing strategies

Your brand is how customers will remember you. It's not just about having a fancy logo — it's about showing people why they should choose your business over others. Good marketing doesn't have to be expensive, but it does need to be consistent. This list is a great way to get started. 

1. Think about what makes you and your business stand out. Will customers remember your friendly attitude, or your get-it-done professionalism? Decide your values, and build your brand around them. 
2. Design a logo and select your brand colors.
3. Create business cards and vehicle signage.
4. Build a simple website or e-commerce page. 
5. Establish a social media presence to connect with local businesses and potential clients.
6. Plan local advertising (online and offline).
7.  Implement SEO strategies to improve online visibility.

Here are some great resources to get you started:

• Canva makes it easy to design eye-catching business cards and flyers — and you can order printed materials right from their site!
• Use a free website builder. 

Step 8: Set up operations

Having good systems in place will make running your business much easier. Build good habits early on. The time you spend now setting up simple ways to handle bookings, payments, and scheduling will save you tons of time once you're busy with customers and out on the road. 

1. Create a scheduling system for bookings and dispatches.
2. Set up an accounting system for tracking income and expenses.
3. Develop standard operating procedures for your services.
4. Consider using apps or software for route optimization and customer management.
5. Explore load boards to find additional job opportunities, especially for long-distance or interstate transportation.

Here are some resources to help you with the next steps:

• Check out QuickBooks for small business accounting.
• See how Routific can help you plan the most efficient routes.

It’s always useful to hear how others have done it, so here’s another video from Tony Ruiz explaining  how it all started for him. 

Step 9: Launch and grow your business

This is where everything comes together and your business becomes real. Remember that every successful cargo van business started exactly where you are — with their first customer. Focus on doing great work, and word will spread. Let’s go!!

1. Start marketing and networking to find your first clients. Ask around friends and family to see who needs transport services. Maybe you know someone who is starting an e-commerce business and needs a last-mile delivery service.
2. Provide excellent service to build a positive reputation.
3. Ask for reviews and referrals from satisfied customers.
4. Continuously evaluate and adjust your business strategies.
5. Stay informed about industry trends, such as the growing demand for expedited shipping and transportation services.
6. As you grow, consider expanding your fleet or diversifying your services to meet specific needs in your market.

Starting a cargo van or any transportation business is a learning process. It’s so important to remain flexible, be prepared to adapt your business model, and don't hesitate to seek advice from experienced entrepreneurs or business mentors. 

Whether you're aiming to become an independent contractor for companies like Amazon or build your own client base, there are many opportunities to make money in this industry.

By following this comprehensive guide and providing reliable, efficient services, you'll be well-positioned to build a successful cargo van business. Best of luck with your new venture!