Buying a limousine business


Pros and Cons of Starting a Limo Business

Are you thinking of starting a limo business? If you are, it's important to know all the ins and outs, and to know what you can expect. It's not all glamorous, mind you. If you are thinking you will be driving a high class clientele only, then you are mistaken. Most of the time you will be providing services for weddings, but also proms, graduations, bachelor and bachelorette parties - which always carries a certain risk of damaging or fouling your car during the ride. But let's see what it actually means to have a limo business, all its glorious and nasty bits. Without further ado, here are the pros and cons of owning a limo business:    


Pro: Demand

There will always be a demand for limo services and ground transportation, to an extent. If you are well positioned, and competition is scarce in the areas you service, the business could be booming. If you are doing it properly, there will always be a need for town car and limo services. And by properly, we mean that you put enough effort in providing a quality service, do SEO as it's supposed to be done, and make sure you market your services to the right audience.

Con: A lot of demand

We presume that at the beginning you will be the one who is driving your vehicle, and then as the demand increases, you should invest in expansion as well. Be prepared to work a lot, to work on weekends, to accept bookings during your grocery shopping, or morning coffee. Rising early one day, working late the next - your sleep schedule is about to get hectic.

Every beginning is a bit hard, and you should be prepared for that. It will be especially be tricky to juggle multiple clients, and there is also the rookie mistake of accepting all the bookings and the general trouble of saying no.

Pro tip: 
Don't burn out, sometimes it's okay to say you are absolutely booked, and to even refer it to other car services. Maybe you will establish a great working relationship so they will send their extra clients your way.

Pro: Various clientele

Limo services are used by a various lot. This is also largely dependent upon the area where you are providing your services. You have occasion-based users who rent a limo for special events like birthdays, engagements, weddings, bachelor and bachelorette parties, proms, even funerals. Then, you have corporate customers who are trying to impress new clients, conduct business deals, or simply squeeze more work and not wasting time while commuting. Then there are special area-related sights, or activities where you could also position yourself - for example offering exclusive city tours, wine tours, scenic drives, luxury shopping experience, and more.

Cons: The wild ones

Special occasions will be the cornerstone of your business. But with various clientele comes the risk of disorderly conduct. Clients will drink and party inside your vehicle, and sometimes they won't be able to hold that liquor down.

Pro tip:
Don't schedule rides neck to neck, always provide a little leeway for your drivers to take care of any potential mess, or take the ride to a thorough cleaning. Getting the smell out is a topic all on its own.

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Pro: It's Cyclical

You will be more busy during certain months in the year - proms, graduations always fall around at the same time of the year, and generally people love spring and summer weddings. You will have less work during Christmas and holidays. Knowing these peaks can help you prepare, mentally and financially, in advance. You can earn more in these times, and spread it out for months with less business opportunities.

Con: It's Cyclical

Even when you know the peaks and lows, it's a hassle not knowing how much will you earn in a given month. As opposed to fixed income, having your own business means that you can't make plans ahead and that saving is a good idea.

Pro tip:
It's good to have a nest to fall into if times get really hard and business goes slow.  

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Pro: Lucrative partnerships

There are also clients who require business accounts, with whom you could achieve mutually lucrative deals. You would get constant work and bookings while offering your services at a bit lower rates. You could form similar types of partnerships with various restaurants, wineries, casinos, hotels and clubs in the area. You could promote each other's businesses and reap the benefits, while sharing mutual clients.


Con: Not enough demand

Today's market is huge, so there is rarely a service that works based on "build it and they will come" principle. You will have to fight for your customers, offer better rates and/or better services than your competitors. Investigate the market - see if there is room for a ground transportation provider and see whether there is a real demand.

 

Pro tip:
Good SEO strategies can help you reach local potential customers, and will rank you higher on search engines.
Good practices can bring you to the first page of search results, get you more business, help you create more leads and lead to an increased demand.

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Pro: Driving cool vehicles

Again, assuming that in the beginning you will be running a one man show, that also means that you will drive pretty cool and luxurious vehicles at some point. Do you know anyone who can say he drives a stretch limo all day, powerful SUV, or a luxury sedan? Although, this can easily turn into a con if you spend a lot of time behind the wheel and generally start to dislike it.  Know the market. Some areas would do great with simple town car rides, and somewhere a party bus would be a huge hit. Consider offering executive travel around large business centers, etc.

Con: Paying for all the cool vehicles

If you spent time working as a chauffeur, as most ground transportation business owners did, don't forget that each vehicle comes with an extra price. Consider what are you going ti do with the storage area - renting those can get hefty. Maintenance for several vehicles, driver salaries, that's all on you. You have to make sure that your fleet is paying for itself.

Pro tip: 
Don't go all out, buying many vehicles and hiring a crew is costly and in the end the expansion has to pay itself. Otherwise, it's just throwing money in the wind.
Don't buy new cars, buy used ones which are in great shape.Think of it like this: both the new car and the used one will make the same amount of money.

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Pro: Owning a business

You will be your own boss and your success will largely depend upon yourself. You will be the only one deciding about where you will put in your hours and well, how many hours to put in in the first place. There is something in knowing that every day you work, you build your own thing, you work for yourself, not others. You set the rules, the limits, conduct business how you please.

Con: Well...Owning a business

You will have to become a jack of all limo trades. Especially in the beginning, you will have to deal with bureaucracy, maintaining your vehicle, cleaning, receiving bookings, making your own schedule, getting all the permits in order, taxes, being in charge of the marketing, social, getting a good website, consider what lead generation techniques to employ... You simply have to be on top of it.

Pro tip:
Outsource what you can, ask for help on the forums, and let other individuals who went through the same share a thing or two and help you out.
Use services by professionals, because wrong SEO can break your business entirely and deem you invisible on the internet.
Poorly looking and working website can lead to high bounce rates and less bookings. Some things are better to be left to the pros.


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Pro: Being there for your clients' happiest moments


It's perfect really - you get to be in the front row seats for people's happiest moments in their lives. You will be right there when they celebrate their birthdays, have fun with their friends, and you will be able to paint the city where you drive in your own words, to show  newcomers and tourists what you see. You will be there for engagements, for weddings, for proms and anniversaries... It's nice to know you are contributing to their once-in-a-lietime experience in some way.


Con: Ruining one of their happiest moments.


Well... Accidents happen. And you will surely witness a demise, whether of your own doing or due to unforeseeable events. Cars break down, and no amount of maintenance can affect a flat tire. As you go on in the business, sometimes errors will occur - wrong times, being late for pickups, wrong cars booked, those are all real-life, viable scenarios that can occur and there is a possibility that you may ruin somebody's moments of happiness.  

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So, to summarize: 


Starting a limo business can be very lucrative, if it's done properly. Pace yourself, expand slowly, offer services that are in demand and invest in Marketing - especially SEO. Be prepared to deal with stress on a daily basis. This is the business that takes a lot of money to set it up. And, the more luxury service you provide, the more it will be demanding.

Super pro tip:

All limo business offer same services and same rides. Sure, your vehicle must be impeccably clean and in near-mint condition. But that is all regarding the cars you provide. The rest is up to you, and the experience you provide.

Make it memorable, and they will do the loudest marketing of them all - social media and a word-of-mouth referrals. And... they will always come back.

 

Our advice? Work for someone, hone the skills, and see whether this could be your world.

 

How to start a Limo Service with a less than $2000 investment

Dear reader, my name is Vince Zogovich, I am the founder of W-Limo Inc, a Limousine company active in Chicago since 1998.

I would like to share my company experience spanning over two decades with young people and future colleagues who want to enter the Limo business.

First and foremost, what’s key to entering the Limo service is that you love to drive and that you are armed with patience!

Before you even question this piece of advice, think of how many times you have heard or read how vital it is to love what you do. The same goes for a Limo business.

If you enjoy driving, you have half of the job done. The other half of the success rate consists of hard work, making strategic decisions, wise investment and a constant desire for personal growth.

Having made the decision to enter the Limo business, your next step is buying a car!

Which Vehicle to choose as your first to start your business

I personally advise your first car to be either a sedan or an SUV. In case you have a good credit score, it pays off to get a new vehicle without a down payment.

The procedure of opening a company is a process that your bookkeeper needs to handle for you. He or she should be able to advise you whether to start with Corp or LLC, just as they should be able to offer advice regarding your checking account and opening a Square Up for card processing.   

You have bought a car and opened a company; your next step is becoming a member of the limo association of your country. Having payed for your membership and  your commercial insurance, inform yourself about the laws and necessary permits. Now you are ready to work!

How to get your first Client?

The million-dollar question! Every sale (finding a client) requires previous marketing activities. I remember being aware right from the start that marketing would not be a cost but rather an investment, but like all startups I didn’t have the means for a strong advertisement campaign.

You are most probably entertaining the idea of hiring a marketing agency, but my advice is not to rush it, and the reasons are not just financial, here are some things to consider.

For a successful marketing campaign knowing your target group is key.

The best thing you can do is stay independent for a while, get to know your clients, the way they think, what they enjoy, things you should by all means avoid doing etc. …it’s only when you have gained this personal experience that you should go to an advertisement agency to discuss the best marketing strategy for your business.

The best way, in the beginning, is to connect with local limo companies. Offer them long term partnership. Convince them that you can be their go to person when they are high in demand and don’t have enough of their own vehicles. Make a special price list that leaves a margin for their profit.

Without this no one will hire you.

It’s a fact that by doing this you will be earning less, but you would be giving quite a portion of your earnings to a marketing agency.

That’s simply the price you have to pay at the beginning.

The advantage of the first clause is that you will be getting direct experience and getting to know your competition, and this is exactly what will help you in the development of your company.

I advise you to remain in this phase for a minimum of a year. That is a long enough period to get to know all the good and bad sides of the limo business.

During this time, you can form a solid web of contacts that will be of use even when your business begins to grow and you have your regular clients.

Additionally, this is a time where you will gain insight into the demand of other vehicles, limousines for 10 or more persons, party buses and similar. And that brings you to your next milestone…

Buying another vehicle

Buying a bigger vehicle. My choice was a limousine that caters for over 10 passengers. This natural transition creates the need for the first employee. You need a driver who will take the car you were driving for the first year, while you drive the new car.

My advice is to find someone starting out or with a little experience. The last thing you want is a stubborn worker who thinks he knows better than you because he’s been a chauffer for longer. You may be able to learn from an experienced colleague, but don’t forget that your goal is to become manager and not driver, and that requires a different skillset and a different work ethic.

It is important that you train your new driver. Show him/her how you operate, the kind of communication that your clients are used to. What makes your service stand out from your competition. Share with your new colleague both your short term and your long-term plans. This can be especially motivational!

People want to be part of something that is advancing!

Now it’s time to let your coworkers know about the new workforce that you have and to offer them a new vehicle.

Now we can discuss further marketing activities.

Marketing in the Limo Business – How to find the right coworker?

Marketing hasn’t actually changed much if at all since 1998 when I started out. The advertisement channels an outlets have changed. Today you are not limited to television, radio and the papers. Everyone is on the internet, and my most genuine advice is to completely focus on digital marketing!

Why?

Because you can measure the exact results of your investment. You will know how many people have seen your advertisement, how many of them have reacted to the ad and visited your web page, and how many people have actually gone on to book one of your services.

Everything is completely transparent, which was unimaginable two decades ago.

When your activity starts generating results, you will it will become obvious to you where you should be investing the most time and money.

Limousine marketing is so specific that you can write a whole topic of its own on it (which we will soon do), but here I will put forth some of the first steps.

First you need a well-designed web site. Don’t obsess about making a masterpiece, because the point here isn’t to get a reward for the most beautifully designed page, but to get new clients.

Therefore, the website needs to be easy to navigate, to hold the attention of the user and to lead him/her to make that reservation!

The website needs to be available. You don’t have any use of a website if no one is visiting it. Actively work on you SEO (search engine optimization), trying to position yourself on the first page of Google when someone searches for a limo service in your city.

Your social media presence is very important. Create original content that attracts your target group. Facebook, Instagram, LinkedIn, Pinterest, YouTube…all of these are platforms that your potential clients visit a couple of times a day.

Try and make yours memorable!

Don’t be afraid to share with the world what it is that you’re working on or trying to make of your business…as your likes, messages and visits to your website grow, so you will too see a rise in the number of your clients which will also positively add to a change on your bank account.

You need a couple of hours a day of actively working on your advertisement and marketing, and don’t even try to do this on your own. Your focus is on maneuvering with the processes within your limo company, taking care of old clients and communicating with new ones. Try your best to keep and not lose them.

The marketing you should leave to the marketing professionals, regularly monitoring your budget and results. It is important that you find someone with marketing experience within the limo business. This is to ensure easy flowing communication, an exchange in experience…etc.

Quality Marketing generates new clients, and new clients means a larger fleet!

An organic growth in your fleet is one vehicle a year. The kind of vehicle will be determined by the demand of your target group who you reach out to most. As your business grows, you will slowly start driving less and handing the wheel over to someone else.  

If you think that’s it, then you are most certainly mistaken, for this is only the beginning!

Considering the fact that a limo service must be available 24/7 you will have to have really good customer service! A great deal of your acquired reservations will depend on this!

This is an ideal moment for the iconized film excerpt from

ABC BABY, ALWAYS BE CLOSING!

You have to create an atmosphere that everything you are doing you are doing because of the client. Obviously, you are trying to make a profit, but the client needs to feel that everything is for them, from the site and the communication on it, to the communication with the operator in the dispatch center.

So long as this all runs smoothly, the potential client will already subconsciously be thinking ‘this company offers amazing service, they treat me like a VIP, I will surely get that treatment during my ride.’

Now we come to the key to success, like in every business but maybe more so in this one, the following comes to the forefront:

What’s has the quality of the communication been before you were contacted by someone? What is the quality of communication when a potential client contacts you? What is the quality of the communication during the service? What is the quality of the communication after the service has been provided?

If you are constantly paying close attention to this, you are sure to become one of the top 3 leading companies in your city.

I tell you this out of personal experience!

 Now that you are aware of the role and importance of the dispatch service, it is essential that you carefully select the persons who will be answering the calls, emails and messages.

Keep reinforcing to them that 99% of the time the dispatcher has to form a friendly relationship with the client!

Every client needs to be treated a certain way. The client should not feel like they are just one of many. People shouldn’t be made to feel this way in the supermarket, not to mention when booking a limo.

It can be detrimental to the business!

Just like the importance of marketing, which we will elaborate on in one of our next blogs. To close this chapter, read what makes a good operator in a dispatch center…

Politeness. There can never be too much of this. Offer it in abundance. Speed. Whether that be answering an email or giving information over the phone, the client is by no means allowed to be made to wait. Transparency. You should by no means be withholding information from your clients. Especially when it comes to paying. The client must know before they book what to expect from the service, what the potential problems are, how they can be solved and how much everything will cost in the end. In case a mistake has been made, never ask the client to make up for it, it is not their responsibility but yours. Responsibility. A good operator in a dispatch center will check everything with the driver before they pick the client up. They will give the right instructions and inform the driver about all the demands and enquiries of the client. They will do everything they can so that there is no misunderstanding during the providing of the service. Attention and Care. Last but not least, a good operator in a dispatch center will call or send an email to the client after the service has been provided to ask whether everything was  as agreed upon, whether the client was unsatisfied with anything, or if they have some suggestions, that they can feel free to contact the company. And make sure to let them know it was a pleasure catering to them and that you will always be happy to provide for them again.

If they client is satisfied, make sure the operator kindly asks the client to leave a comment on social media and your google account!

Developing a business is the same as reaching the mountain peak!

To end on a positive note, if you have come this far in your business endeavor, I can tell you are a successful businessman.

You have proven your passion for what you do, patience, the ability to bring strategic decisions and the ability to bring across your energy and knowledge to your coworkers. You have an organic yearly growth, that looks like a geometric progression.

I have to say that this is only possible in the beginning, just like reaching the mountain peak.

In this phase of business, it is a great success if you are making a rise of 507% on a yearly level. It’s not realistic to expect to double your results every year, that is only possible between the first and fourth year of operating. After that you can safely attach a big part of your business to luck. Because you simply cannot control everything in life.

It is in your power to take care of the position you have reached, to control the processes of your company and to try to prevent potential problems, and learn to enjoy your success, the view from the top is amazing!