Cargo Van Business Plan
For most solo cargo van operators, a 1-2 page lean plan is enough as a thinking tool. For operators applying for financing on the vehicle or starting an Amazon DSP operation, a more formal plan is required. This article walks through both. It's part of the Cargo Van Business guide.
When you need a formal plan
You need a formal plan if you're applying for:
- An auto loan on a commercial cargo van (most lenders ask for at least basic projections)
- An SBA loan for vehicle and working capital
- Amazon DSP application (Amazon wants to see your financial commitment and operational plan)
- Equipment financing on a van conversion or upfit
For a cash purchase of a used van plus modest setup costs, the lean version is enough.
The lean plan (1-2 pages)
1. The pitch
"Sandhill Delivery is a solo-owned cargo van delivery and courier business operating in [city/county], offering same-day local delivery, courier service for small businesses, and contracted route delivery. The business uses [year] [make/model] cargo van and operates as an LLC."
2. The customer base
Who hires the van and what for? Be specific:
"Target customers include: (1) gig delivery platforms (Roadie, Uber Connect) for variable supplemental work; (2) local businesses with regular delivery needs (florists, auto parts stores, medical labs); (3) one-time moving and hauling jobs through Facebook and Nextdoor referrals."
3. The pricing
| Service | Rate |
|---|---|
| Hourly courier rate | $50-$80 |
| Same-day delivery (per stop) | $25-$60 |
| Moving and hauling (per hour) | $80-$150 |
| Routes (per route, by contract) | varies |
4. The startup costs
| Line | Cost |
|---|---|
| LLC, EIN, banking | $250 |
| Commercial auto insurance (year 1) | $3,500 |
| General liability insurance (year 1) | $600 |
| Used cargo van (if not owned) | $0-$25,000 |
| Vehicle inspection and minor maintenance | $300 |
| Shelving, hand truck, straps, blankets | $500-$1,500 |
| Vehicle decals and signage | $100-$500 |
| Initial fuel and float | $300 |
| Buffer | $500 |
| Total | $6,050-$32,450 |
5. The year-1 revenue projection
| Months | Estimated revenue |
|---|---|
| 1-2 (ramp) | $1,500-$3,000/month |
| 3-6 | $3,000-$5,500/month |
| 7-12 | $5,000-$8,000/month |
| Year 1 total | $36,000-$72,000 |
6. The year-1 operating costs
| Line | Annual |
|---|---|
| Fuel | $8,000-$15,000 |
| Vehicle maintenance | $2,500-$6,000 |
| Insurance (commercial auto + GL) | $4,100-$6,000 |
| Vehicle license, registration, fees | $200-$600 |
| Software, banking, fees | $300-$800 |
| Marketing | $200-$800 |
| Total | $15,300-$29,200 |
7. The year-1 profit estimate
Revenue $36,000-$72,000 minus costs $15,300-$29,200 = $20,700-$42,800 net before self-employment tax.
After 15.3% self-employment tax,1 roughly $17,000-$36,000 take-home before federal and state income tax.
If you also have a vehicle loan payment, subtract that. A $25,000 used van financed over 60 months at 9% APR is roughly $520/month or $6,240/year, which would reduce the net by that amount.
8. The risks
"Main risks: (1) vehicle breakdown taking the only revenue-producing asset out of service; (2) inconsistent delivery work in the early months; (3) fuel cost increases compressing margins; (4) gig platform pay rate cuts; (5) liability claim from a delivery accident or property damage."
That's the lean plan.
Amazon DSP application requirements
If you're applying to Amazon's DSP program specifically, the application package is more elaborate:
- Personal financial statement showing $10,000-$30,000+ in liquidity
- Background check
- Interviews with Amazon's selection team
- Detailed business plan covering operations, financial projections, and management approach
- Demonstrated leadership or management experience
Amazon's published expectations for DSP operators include managing 20-40 vans, hiring and managing 30+ drivers, and operating with thin margins on high volume. This is fundamentally different from the lean operator path.
Next steps
- Cargo Van Business: How It Actually Works - the four types
- Cargo Van Business Start Up Cost - the cost side
- Best Cargo Vans for Small Business - the vehicle decision
Or back to the Cargo Van Business guide for the rest.