Introduction to Start a Limousine Business
The limousine business has grown at an annual rate of 2.7% for the last 15 years and provides profits of more than $ 12 billion in the United States alone.
While this also means there is more competition, it also indicates that there is more money to be made in the correct market. If you are a social person and don’t mind working long hours, starting a limousine company might be the ideal option for you.
However, you must do some careful planning, market yourself effectively, and vary your services to ensure success. Read on to find out how to start a successful limousine business in America.
Understand what it takes to start your limousine business
This business is not for everyone. It is based on customer service and availability. If you are not a social person, look for another option. If you want a job from 9 am to 5 pm, think twice.
People rent limos at any time of the day, and the most lucrative jobs happen on the weekends. Make sure you are comfortable with the idea of working unpredictable hours and for several hours before starting your business.
Evaluate the costs of starting your own business
If you want to start with your own car, insurance and website, you will have to invest between $ 50 and $ 100,000 plus the monthly costs of fuel and maintenance.
If you want to start a virtual phone call centre, with just business cards, a toll-free line, and a web page, you can start from $ 500 to $ 5000, depending mainly on how much you spend on your site.
Decide what type of company you will start
You don’t need a limo to start a limousine business. Depending on how much you are willing to invest, you can start by building a customer base such as a virtual phone call centre by purchasing a vehicle or two or having an entire fleet.
Virtual telephone call centres. All you need in this case is a business card, a website, and a toll-free number. You will answer calls or requests through the travel internet and you will outsource limousine services, absorbing up to 20% commission. This is an inexpensive way to build a customer base and accumulate capital.
Drive a vehicle. You will start with a black sedan (usually a chauffeured car) and a limo (white is best at first). Both require a significant investment. On the other hand, driving your own vehicle will allow you to increase your earnings significantly.
Fleet. Having a fleet is the riskiest way to start your business, as it requires a significant capital outlay to purchase multiple sedans and limos. You will also need to hire operators and drivers, who will generally pay a flat rate to use your vehicles (between $ 75 and $ 150 a day) or give you a percentage of their rates (usually one third). More vehicles on the road can mean more money, but also bigger losses if the business is slow.
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Write a business plan
Regardless of the type of limousine service you decide to launch, it will be useful for your business that you have a strategic plan to guide you to achieve your goals. You can find more details about how to write a plan, but basically you should include the following:
Business concept. This represents what you offer, your strengths and weaknesses, your long-term goals and performance indicators, beyond the balance line, that will let you know which areas are successful or which are not. The latter can include important measures such as the number of repeat customers and the number of requests that turn into sales.
Market research. It’s about the nature of the industry, who your customers are (entrepreneurs, airport trips, weddings, etc.), who are the companies that compete with you, what are the prices that are charged, etc. Remember that the goal is to sell a service. This is a luxurious business, so being an inexpensive company will not be a good business model in this case.
This includes how to communicate with customers and grow your customer base.
Operations plan. Identify the individual projects that will lead you to achieve your most important goals. To get started, they can include things like hiring a designer, registering your domain and finding a web server to build your site, or finding leased vehicle insurance, buying cars, and choosing billing options to prepare your vehicles to offer the service.
Financial projections. This includes a list of assets before starting your own business, such as start-up costs (such as building a website, obtaining insurance, obtaining permits, and purchasing a vehicle), marketing costs, and profit projections.
You will have to know how much your business should generate and at what price to make a profit, and how long you can lose.
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Consider hiring an advisor
There are consultants specializing in the limousine business who can help you identify the most lucrative markets, set rates, and the most effective promotional campaigns. Especially if you are new to the industry, an advisor could help you make money in the long run, despite the initial cost.