How to start a mail forwarding business

Mail forwarding is essentially renting out your address to another business. 

The business can list the rented address as their own and get all their mail, packages, and other kinds of correspondence sent there, where it’s received and sorted. Then, it’s either held for collection or forwarded to another address (like the business owner’s private home address). 

The fairly simple business model and potential for scalability make it an attractive choice for small business owners, especially if they already have a registered address in an internationally recognised city. 

In this guide, we’ll take an in-depth look at the services mail forwarding businesses provide. Then we’ll cover some of the key steps needed to start your own mail forwarding business, such as:

• Make a business plan.
• Choose a business structure.
• Register your business.
• Market your business.
• Budget for startup costs.
• Prepare for business bookkeeping.
• Open a business current account. 

A mail forwarding business can offer the use of an address, normally in a major city, to act as a registered business address. Businesses can then use that address to correspond with HMRC, Companies House, and their customers. In the UK, most mail forwarding businesses are London-based. 

Mail forwarding can be a valuable service for all kinds of businesses, including:

• Home-based business owners who don’t want to reveal their home addresses. They can also receive packages at any time of the day, which is more convenient.
• UK businesses based outside of London that want to use a prestigious centrally located business address. The address can make it easier to branch out internationally. 
• International business owners that want a virtual presence or a mail address in the UK.

There are different levels of service when it comes to mail forwarding businesses. First, there are the more traditional mail forwarding businesses, like Company Address, that can offer:

• UK registered office address which you can use to register your business with HMRC and Companies House.
• Mail forwarding.
• A business mail address.
• A service address (to protect your private address from public records). 

Then there are the more in-depth businesses, like Hoxtonmix, that offer an entirely virtual office. They offer all the same things we mentioned above, but they also have additional services like business phone diversions and meeting rooms for rent. 

Many of your customers will use your address to register their businesses with HMRC, with many mail forwarding businesses offering that as a paid service. 

So, first of all, you should be familiar with the process of registering businesses and companies with HMRC and Companies House. 

On top of that, you’ll also need:

• Organisational skills to deal with the logistics of mail forwarding. 
• Experience handling and managing property. 
• Discretion when dealing with customers’ information. 

As a lot of your business will come from abroad, it’s also a good idea to become familiar with some international customs when it comes to business. 

A good business plan will give you the best chance for success. Outline your general strategy and the resources you’ll need to make it work. You can split most business plans into seven key parts.

The executive summary is a general overview of your business, containing:

• A basic definition of your business.
• A list of goals.
• A list of products and services. 
• Your target customers. 
• Where and how you intend to sell your services.
• Your financial strategy.

The business overview is similar to an executive summary, but it’s about big picture stuff, including:

• The name of your mail forwarding business. 
• A description of your brand identity. 
• The legal structure of your business. 
• Your mission statement.

Your market research should include all of your research about the current mail forwarding industry. 

Think about how your business will be able to exist in the current market by conducting research. For example, look at your main competitors, study recent market trends, and work out why customers will choose you over other mail forwarding businesses. 

Maybe you have better prices, better service, or more options than others. Things like these will set you apart from the competition. 

Starting with the products and services list in your executive summary, expand on the specific services you will offer. You should include a pricing guide with reasons for your prices. 

For example, if a service is more expensive than your competitors’, explain why it’s worth the extra money. Likewise, if it’s cheaper, explain how you can offer the lower price without sacrificing quality.

The marketing plan explains where and how you’ll find your customers. Since the idea of a mail forwarding business is to attract business owners from different areas, you’ll probably want to focus more on online marketing than local marketing. 

Include your total marketing budget and where you plan to allocate your resources. 

The operations plan is where you outline the specific resources you need for the day-to-day running of your mail forwarding business. 

Figure out everything you need, how much it will cost, and where you plan to source it. 

When looking for outside funding, you’ll need to prove to lenders that you can handle the loan repayments. 

Financial plans are made up of:

• An income statement: How much money you’ll earn per week, month, quarter, or year (minus your business-related expenses).
• A balance sheet: A list of your business assets and liabilities.
• A cash flow statement: Your monthly income and outgoings. 

Most businesses register as either a sole trader or a limited company. 

As a sole trader, you’ll have complete control over profits, but you’ll also be personally responsible for any debts your business has. So, it can be a riskier business structure.

Setting up a limited company means you’re a legally separate entity from your business, giving you limited liability for debts. With limited liability, your personal finances are safe if the company goes bust. 

If you’re a sole trader, register as self-employed with HMRC to pay income tax on your taxable income:

• Personal Allowance: Up to £12,570 (0%)
• Basic rate: £12,571 to £50,270 (20%)
• Higher rate: £50,271 to £150,000 (40%)
• Additional rate: over £150,000 (45%)

As a limited company director, you should register with HMRC as an employer. If you want to take a salary, you must also sign up to PAYE as an employee of your business. 

Rather than income tax, limited companies pay corporation tax (19%) on all of their taxable income.

In this section, we’ll cover the basics of marketing your mail forwarding business, focusing on online marketing and branding. 

First, you need to build your brand. Decide on a particular look, feel, and set of values. After that, all the business decisions you make need to maintain a consistent brand identity. 

There are also some legal implications to consider. All of your intellectual property, like logos, slogan, and company name, must be in line with the copyright, designs, and patent act.

As a mail forwarding business, your customers are going to come from outside your city or country, so they’ll probably find your business online. Build your online customer base with a combination of:

• A business website.
• Social media marketing.
• Email marketing.

Creating your own business website isn’t as difficult as it used to be. There are loads of beginner-friendly website builders that are suitable for all budgets. 

After building your website, you want people to find you through search engines, like Google. You can improve your online search rankings by:

• Paying for Google ads.
• Improving your SEO (search engine optimisation).
• Using online directories like Google my business.
• Encouraging Google reviews from customers.

There are loads of social media platforms you can use to market your business. Sites like these are full of potential customers:

• Facebook 
• Twitter
• Snapchat
• LinkedIn
• Instagram
• TikTok
• YouTube 

Here are some general rules for social media marketing:

• Post content often and regularly. 
• Post content that’s interesting to users, not just sales pitches for your business.
• Engage with users by replying to comments, taking polls, making quizzes, and running competitions. 
• Switch between written posts, videos, and photos. 
• Always link back to your business website in your posts. 

With email marketing, you can send newsletters and promotions straight to customer inboxes. You can also automate emails to send at certain times. 

The biggest challenge for a new business is building up a mailing list. If you need some advice, try our article, “How to build an email list for a startup”.

As part of your business plan, you should make a detailed list of your startup costs and budget. 

Because a mail forwarding business essentially sells an address, the most significant expense will be your initial property. Smaller businesses can get by with one small registered address, but larger virtual office businesses will need to purchase office space. 

Aside from the property itself, other startup costs to consider are:

• A PC or Laptop.
• CMS software/website builder.
• Staff (if you’re running a virtual office). 
• Insurance.

When it comes to insurance, you’ll want to look into these policies:

• Public liability insurance. 
• Professional indemnity insurance. 
• Employers’ liability insurance (if you employ staff). 
• Business contents insurance. 

Part of running a business is doing your own bookkeeping. You’ll have to record and organise your business transactions to create financial reports. 

It can take some time to get the hang of, especially if you don’t have much accounting experience, so we’ll cover some essentials here:

• Cash flow.
• Profit and loss statements.
• Recording business expenses.
• Invoicing.

Cash flow is the actual cash moving in and out of your business account. Tracking cash flow is important if you want an accurate picture of your business’ immediate financial health. 

The tricky part about tracking cash flow is getting your hands on the latest, most accurate information from your business account. 

Countingup is currently the only business current account that lets customers view their cash flow in real time. It comes with built-in accounting software, allowing you to check cash flow straight from the app with no data lag. 

With accurate financial data, you can create profit and loss statements that show how much you’re spending compared to how much you’re earning, 

Accurate profit and loss statements can show you how your business is performing over time and how each transaction affects your long-term projections. They can also be used to make tax estimates and apply for loans.

In order to bill your clients, you’ll need to get comfortable with sending and managing invoices. 

While fairly simple, it can be tedious, and you might find yourself spending a lot of time creating invoices, recording them, organising them, and chasing up payments. 

There are accounting tools, like the Countingup business app, that can make this a whole lot easier.

With the Countingup app, you can: 

• Create an unlimited number of customised invoices.
• Add a logo to invoice templates.
• Send invoices to customers.
• Receive a notification when an invoice is paid.
• Match a payment to an invoice.
• Duplicate an invoice.
• Change an invoice’s due date.

There are inevitable costs that come with running a business. Luckily, you can claim a lot of those costs as business expenses, meaning you deduct them from your taxable income. 

To get the most out of your business expenses, you need to get into the habit of recording your business expenses, such as:

• Office costs.
• Travel costs.
• Clothing expenses.
• Staff costs.
• Things you buy to sell on.
• Financial costs.
• Costs of your business premises.
• Advertising or marketing.
• Business-related training courses.

Recording every transaction can take time, but it’s another thing that the Countingup app can help with. 

The Countingup app’s automatic expense categorisation and receipt capture tool make it easy to keep accurate, digital records of your business expenses. 

Whenever you pay for a business expense, just snap a picture of the receipt, then they’ll be saved on the app and automatically sorted into HMRC approved categories.

When running your own business, you should keep your personal and business finances separate from day one. If you don’t, it’ll lead to more time-consuming financial admin later on. 

When you sign up for a Countingup business current account, you’ll receive free accounting software with a range of time-saving tools. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here and start your three-month free trial.