Originally Posted by
Kurt@LimoLive24.com
Again, my posts state that it depends on what you want to use your Limousine Business Plan for... that is the first question you have to ask yourself. An internal operational plan is much different from an external plan used to set the groundwork for a loan or investment.
However, ask yourself one key question BEFORE you invest your own money in your own company... If you are not able to layout a plan in enough detail to provide a convincing argument that your idea has a better than 50/50 chance of succeeding, that you know where you are going, how you are going to get there and when, and what the business model and profit is going to look like when you do, then why are you investing in this business?
Don't get me wrong... I am sure that there are a lot of successful limo companies that were started with no plan and a car. But I would bet that there are far more that started that way and are no longer around. In today's unusually competitive and difficult market, having a plan and making sure you have thought things through is essential, if you want to keep your money. After all, why are you starting a limo business? Is it because you just love the idea and the flashy cars? Or is it to make money? To improve your lifestyle? To provide an above-average income for you and your family? To send your kids to college? If latter more identifies you then you are a businessman first, and your choice of a limousine business is merely the road to get you where you want to be. So making sure you plan for success is paramount, the same way as you should thoroughly review any potential investment.
Business people are a bit different. Their focus is certainly on trying to be the best operator they can be, to expand the business and improve it, but it also means that the recognize that they run the business.... the business does not run them. They know that a plan means they understand where they are going and have contingency plans and reserves in case things are not perfect. They understand that working 24/7 is not a solution, it is a death sentence. That knowing how the business is structured and makes money and what staffing levels are needed and cash flow required is just as important as which vehicles are used, how they are outfitted and how they will market their company. In the end after all, it will come down to whether this investment will pay off as intended, both in lifestyle and in money returned. Just investing so you can have a job which works you to death, gives you nightmares due to the responsibility, requires you to give up your life and pays you what you would make as a VP somewhere else, is probably not going to indicate a truly successful business for the business-focused operator.
How long does it take to write a plan? Well that is a good question and depends a lot on the experience of the person writing it. That is why I recommend a program that helps you along, forces you to answer key questions and gets you thinking. Some things will require outside counsel too. There are also companies that will help you to write a plan. They ask a lot of key questions and then get it all down in the proper and complete format. In the end though, it is never done. We usually dust them off every six months and see what has changed and how we have to revise it, at least for internal purposes.
If you work on it every day, you can get it done in a few weeks I would say. If you use a service to write it, plan on 30 days or more as you will have back and forth question and answer sessions. If you do it part time, it may take months. Some of this will depend on how complete it is and a lot will depend on what kind of operation you are building. A plan for a one car operator and a sedan is probably very simple, but don't count on any investor to put up money to buy you a job. A set up for a three year plan to build a 20 car operation is going to be more appealing and take more planning and time.
As to raising capital... yes you can raise debt and equity... but both are much harder today after the economy fell off a cliff. Raising capital from people you know or referrals is probably a better bet for a small limousine operation, but capital from banks is still available if you have the right relationships and mix of key components. Raising capital from friends, family and referrals still means you are going to need to show them the care you took to come up with a viable plan, and how that will benefit them. So a good business plan would, in my mind, be important to you and to them. There are still some very active groups that are full of professional investors that typically place $50,000 - $500,000 (or more as syndicates or groups) in private companies and start ups. There are ways to reach these types and many prefer this kind of investment to investing in the stock market, where they cannot get the same level of comfort and continuous feedback from their investments. If you want more on this subject, let me know. Our venture firm operates specifically in this niche.
Would you hand your wallet over to someone that just walked up to you on the street today, in this market, and said "I have a great idea for a limo company and I know it is going to work... How much cash will you give me?"
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