This is the fourth of six ‘business plan' posts in our 31 Day Courier MBA series. In the first three, we talked about the Who, the Why, and the Where. Today and tomorrow we'll get more into the… ummmm…. I can't find another W question for this one. We'll have to go with the “How Much?”
We're talking about the money people. Show me the money!
Including the money in your planning
When I asked the “why are you doing this?” question a couple days ago, I know the answer for most people starts with money. I'm earning money for this or that. Maybe it's full time, maybe it's a side hustle. When you dig into it, your reason is always deeper than the money, but here's the reality – we need the money to fulfill those reasons. The money has to be in the planning, in your foundation of what you do going forward.
Two days ago, I asked why you are doing this. Back then, we dug deeper into the reasons behind your why, but for most of us the initial answer is the money. We need to earn money – either full time or as a side hustle. You need to figure that money into your planning, your foundation. You need to know going in what you need to earn to make it worthwhile, and have an idea if the potential you can earn can meet that target.
Wait a minute… we’re doing two money topics here… isn’t this all part of finance? Yes, but it’s also pretty foundational stuff here. Today we’ll talk about the opportunities that are out there, evaluating what those opportunities are, and tomorrow we’ll talk about setting goals. When you are starting and planning a business, you really need to understand these things. Today it’s more about what CAN I earn, tomorrow it’s doing the soul searching: Is it enough?
What is the potential?
In some ways today kind of digs a bit deeper into parts of yesterday’s topic. Yesterday we talked about understanding your market. Today it’s about digging into what the potential for earning is in your market.
The importance of diversification
Here’s an important lesson for anyone in business: Don’t rely too much on any one customer. If you have been in the on demand delivery space for very long, you can see that things change, sometimes very quickly.
There are a lot of people who are signed on with only one company. Don’t do this. Have options. I strongly recommend that you have multiple options available. It doesn’t mean you have to work them all equally – currently I get about 75% of my revenue from one company. However, there are times when things change and the numbers can shift dramatically.
Things happen. Payment plans change. Bad PR can slow the market down for a particular delivery company. The technology can take a crap on the company – I’ve been through some major outages with Grubhub and Doordash during peak delivery times, and if there hadn’t been other options I’d have been stuck without earnings. Every once in awhile a driver can lose the ability to drive for a platform for things that are outside their control. Keep your options open.
I don’t think you need to work all the options equally, but it is good to pay enough attention to each of the options to have a pulse on what’s happening. There are times where the promotions are much better with one company than with others. That same company might have saturated their market later down the line and orders are harder to find.
Know your options in your market.
It is good to know what the options are and have an idea of the earnings potential. Understand the way that they pay. Understand when the differences between the platforms work to your advantage. Know the strengths and weaknesses in your market. As an example, I’ll give you a brief rundown of the four platforms that I work in my market. Remember, these are just my market – it may vary where you are.
Grubhub. Grubhub has been the most consistent in providing offers in my area that pay well. They have been busy enough that you can easily keep working deliveries with just their platform. Their best strength is in encouraging tipping. Lately in my market the dispatching is getting wonky with a lot more offers being further away.
Doordash is busy enough that you can keep rolling. Their pay model which only pays a dollar in delivery fees does mean they often pay out less than similar orders from other platforms. When things are very busy, Doordash has some of the best incentives in the market and for bursts of time can be the best paying option out there.
Postmates has been a rising star for me. They seem to be the best in my market at having the food ready when I get to the restaurant. I actually average more per hour on Postmates deliveries than anyone, however they don’t seem nearly as busy or constant in my market.
Uber Eats can be all over the map. They probably have the best delivery fees in the market but far and away the worst tipping. Deliveries with them depend heavily on when they have boosts and other promotions. They don’t provide enough information on their offer screen for me to use them often.
This is just a sample of a quick breakdown. I do keep a history of how much I actually earn with each one, that’s something we’ll get more into later on. The thing here is that each platform can provide good earnings potential depending on where and when and what’s going on.
If you’re not sure how well some platforms pay, chat it up with other drivers. Ask how they like their platform, how busy it is, when it seems to work well. Most major markets have social media groups for drivers for one or more platforms within the community and some of those are more active than others. Always take any one response with a grain of salt, but keep an eye on what’s happening with the different apps.
Keep an eye out for non delivery revenue opportunities
In some markets, you may find plenty coming in to satisfy your requirements. Other markets may be busy only during certain times. You may want to look at other revenue opportunities.
Is there an opportunity for referral revenue? Sometimes you can receive money for referring drivers, other times you can receive money for referring customers. Keep an eye out for opportunities that can add revenue.
What about other gig economy options? You might prefer doing some ride share at times. You might look into dog walking or lawn care apps and opportunities. You may find some work from home options that can supplement income. Several youtube creators have built up ad revenue from sharing their experiences and thoughts about courier work.
Be creative. Identify where the revenue possibilities are the strongest, and where the payment for your effort is the strongest, but understand your market and understand other opportunities enough to know when you can make switches. Know what the potential is for earnings in your area.
Once you understand your earnings potential, then we can get into tomorrow’s topic: Is it enough? We’ll dig into setting a target and making sure it’s a target that earns what you TRULY need in tomorrow’s episode.