In 2018, US businesses spent around $1.64 trillion on logistics and transportation. Besides the typical transport of goods, corporate transportation is increasing in precedence in the business world. The limousine is particularly gaining recognition due to its luxurious nature, which adds a touch of sophistication in an event.
If you’re enthusiastic about quality service provision, starting a limousine business can be your forte. While this enterprise is lucrative, you have to be resilient enough to break even. Other than registering your limo company, you should navigate through financing to purchase the vehicles and understand the regulatory environment.
Just like any entrepreneurial venture, you need to have a plan to make it in the limo industry. Here’s how to start a limo business.
Create A Business Plan
A business plan is a great guide when starting a new business. With a plan, an entrepreneur can map out some of the specifics in a company. In a business plan, consider to include your business name, target market, startup, and ongoing expenses and the period it will take you to start reaping from your business.
One of the main costs that you’ll encounter when starting a limousine business is purchasing the required vehicles. You might have to part with $50,000 at the minimum for a single limo. While a second-hand car might save you some bucks, tread carefully as a limo’s glamour depends on its newness and luster.
When establishing the cost, be sure to include the rate of insurance and marketing. Storing the limousines in a commercial yard will also necessitate you to dig deeper into your pockets. The ongoing costs are mostly payment of drivers and maintenance services.
The cost of corporate transportation varies between regions and the type of car you’re using. You might need to establish minimum requirements, such as the number of hours one can rent your limo. Additional services such as Prom or wedding packages can increase your revenue.
Define Your Target Market
The success of your limo company depends on the availability of clients. Often, limousine companies focus on corporate customers. Most of the corporate clients seeking to hire a limo understand the impacts of these luxurious vehicles on their image or business. As such, you might not experience hurdles charging the clients.
Considering special occasions can be a great way to expand your market. Getting a wedding or prom clients can be a great starting point. Nonetheless, you might need to focus on a specific market as your business continues to grow.
On the downside, people hire limos on occasion. Consequently, you might experience a low season, which can dent your business. It would help to have a more extensive customer base for your business to remain sustainable.
Decide On The Company Type
You need to choose a business structure that resonates with your venture. An LLC is one of the most preferred entities as it prevents you from liabilities relating to your business. However, there are no limitations on how you decide to run your business.
Depending on your financial ability, you can start your limo business as a virtual call center, where you’ll be the sole proprietor. At this point, you only need a website, toll-free number, and a business card. Once you get clients, you subcontract the limo services and get a commission.
The type of business structure you go for should be acceptable in your state of operation. You can check out the pros and cons of all the legal structures to determine what works best for you.
Take Care Of The Tax And Legal Matters
The legal structure you choose for your limo company determines the taxation. Whether you’re a sole proprietor or a partnership, you have to file your returns. A tax ID for your employees will be necessary.
You also need to obtain the necessary licenses and permits in your state, failure to which you might face hefty fines. Limousine services in each state have differing regulations on vehicle inspection, safety precautions, and the number of passengers in each limo.
A 2001 Ford Excursion limo crashed in upstate New York, killing 20 people in 2018. Limousine accidents are rare yet devastating. Having insurance is a sure way of protecting your business and your workers in case of such accidents.
Besides being a state requirement, auto insurance is an excellent resource for your company. Be keen when getting insurance as some policies don’t cover car hires.
Get Your Limo And Market Aggressively
Buying a fleet of limos when starting out is financially straining. You can decide to start with one limo and expand based on your business growth. Leasing a limo is another viable option.
Now that you have your car ready, you need to invest in marketing. Start by identifying other limo companies within your area of operation. Some of these businesses might need to hire your limos if a client wants more limos than they can provide.
It would also help to network with wedding planners, convention facilitators, and funeral home directors. These professionals often require limo services for their clients. You can link up with consumers directly through social media.
With this age of increased internet use, having a website will make your advertising easier and more fruitful. Take advantage of pay-per-click advertising. The right message can have a significant impact on converting clicks to sales.
Other than digital advertising, consider various forms of traditional marketing. Dropping your business clubs in high-end hotels and several other organizations will land you clients.
Starting A Limo Company Can Change Your Financial Status Within A Few Years
When you decide to delve into the limo business, you have to be ready to face risks. A limo company can be an expensive venture at first. However, it gets easier when you start getting clients.
With consistency, the return on investment in a limousine business will be evident. Don’t worry about humble beginnings. Buying limousines can be costly for an upstart, but with time, owning a fleet won’t be surprising.
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