From Point A to B: How to Raise the Capital You’ll Need for Your Limousine Startup

There’s permits, licenses, fees – and don’t forget about the car or van. How do you manage all these costs and get down to the business of driving? Here’s how successful drivers get started in their own limousine business.

Making A Business Plan

Before you even think about buying any equipment, vehicles, or hiring employees, know how you will make money at this, and how you will get customers. That’s the reason you’re in business, after all. You want to solve problems for your clientele and get paid for doing it.

In the limo business, the problem is simple: your customers want to get from “point A” to “point B” but do it in style.

Now, specific problems differ for different people. For example, if you’re driving someone to and from the prom or a wedding, the need is an elegant form of transportation to and from what amounts to an elaborate celebration. If you’re transporting someone to and from the airport, the problem is a little simpler and straightforward — businessmen usually like to be chauffeured around in something a little more upscale than a taxi, and they want peace and quiet during their trip.

If you’re chauffeuring someone for a funeral, you are providing peace, solitude, and privacy during a sensitive and emotional time.

Each scenario is different, and deserves its own consideration. And, you want to focus on how you would serve each market, what markets you may not be interested in serving, and how best you can solve their problems and provide your unique take on the solution (which is providing a limo service).

Figure Out The Marketing Angle Early

Once you understand your market, you need to have a marketing angle. How will you be different from your competitors? There are a lot of limo services out there, each one vying for the attention of the marketplace. You need to know how you will fill a gap, an under served market, or otherwise provide value in the marketplace.

It’s not enough to cut your prices and claim you’ll have better service. First of all, customers are highly skeptical. They’ve heard it all before. You need to provide elements of proof in your marketing.

If you can’t provide a unique selling proposition, point of differentiation, or some way that you stand out from the competition, then you should probably reconsider going into business.

Getting Your Fleet

Lease or purchase your limos. You can find more at BuyLimos.co/Limousine-Inventory/. Long-term, buying a limo is cheaper than leasing one. It may not be necessary to purchase initially, however, and in fact might be cost-prohibitive. But, eventually, you will want to buy.

Have the vehicles checked to make sure they’re in peak performance, and keep up on the maintenance. Invest in professional-quality cleaning and reupholstering services, GPS, and keep paper backup maps in the glovebox.

One of the things that you’ll quickly find is that limos are expensive. Getting financing for them isn’t always possible. But, if you have a good relationship with your bank, you may be able to get the financing you need to build up your fleet quickly.

Otherwise, it may be better to lease the vehicles you need.

You can also split up your fleet, buying some and leasing others. If you take this approach, keep track of the costs for both, and pay extra attention to the mileage you’re putting on leased vehicles, as they are subject to strict mileage limitations as part of the lease agreement.

Apply For Your Licenses

You should probably do this early on in the process of setting up because you can’t run a business without licensing. Your limo business license, tax ID number, and liability insurance need to be in order before you accept any passengers. Check with the city government for any additional regional documentation needs.

You may need for-hire livery insurance. This can take several weeks to secure. During this time, set up your company’s legal structure — a proprietorship, corporation, partnership, or some other legal entity.

Network

In most cases, it’s possible to cooperate with other limo businesses in town, especially if they’re small businesses. Because some events require a large fleet of limos that exceeds one company’s ability to provide, it may behoove you to partner up with other local limo companies in the area.

Conclusion

Starting a limo business isn’t easy, but it can be very lucrative. This is especially true over the long-term after the initial capital costs and expenditures have been recouped.

Sam Riley started his livery service a few years back. He’s now actually thankful that he was made redundant from his delivery job as otherwise he would never have taken the leap. He shares his tips and experiences with other budding drivers.