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Thread: New to this site..I need advise of starting a limo company

  1. #1

    Default New to this site..I need advise of starting a limo company

    I'm looking to start my own business. I've thought of numerous ideas for businesses. I came up with the Limousine business because I see there is an establish market for it. I thought about how often I've seen limos at weddings, night out on the town, sporting events etc. I said, this must be a very profitable business.

    I've done much research regarding this business. My research continues. I found this website and thought this may be a good way to speak with others who are involved in the business.


    Im hoping you guys can give me some advise on things I need to know in starting my limo service. Things such as where to purchase the limos, what licenses are needs, How many limos should I start with?

    Is this a real profitable business?

    How many drivers should I hire?

    Best way to market?

    Or anything else you guys can give me advise on.

    I starting from the beginning.......

  2. #2
    Senior Member Limo Padawan Ali's Avatar
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    Default

    Welcome to the site. What state are you in? Each state has different regulations and permits required. Perhaps someone from your state can chime in.

    I also hate to break it to you, but the livery industry is not as easy as it seems. Especially these days are pretty rough. Some companies are doing fine, but others are on the verge of closing their doors.

  3. #3
    Senior Member J.Scott's Avatar
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    Default Welcome

    Welcome to the forum!

    Ah the limo biz! What state are you in for starters? Is this your only venture or do you have other sources of income? I own a real estate software company, a real estate lead generation company, a new real estate brokerage and a few other rat holes that I dig money from, one of which is the limo company. IT CAN BE PROFITABLE. But to make it profitable you need to do it right. I prefer the limo company to be a "sideline" for me. Lots of guys have started too big and tanked, and some never grew and well tanked. I got into this charade a few years ago because I owned a limo and I thought it would be fun. It is fun but it has its ups and downs. If you are serious about making a career move to the limousine industry go read wheels of gold, listen to most of Bill's input and jump in, if you still like it.

    There is a ton of talent in here that can help you, hope you enjoy the wealth of knowledge here.

  4. #4
    Senior Member MrQ45Limo's Avatar
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    Profit??? What Profit? I do it for the laughs and my mechanic, oh and let's not forget the Government. Welcome to the wonderful world of Limo's, as was stated before it ain't all Peaches and Cream my friend, alot of times it's rotten Apples and Sour Milk. Check out the Local Talent, see how many Limo companies are in your Area. If we knew where you were we could give you better advise 4 sure.

  5. #5

    Default

    Wheels of Gold is a good start, I agree. But the content is quite light and it will leave you with less than a full picture of the limousine business and operations. First, you need to get a really good idea of the local market you are in, whatever that is. Is there a local limo association? You can usually call them and arrange to attend a few meetings without signing up yet to see what is going on. Talk to the local limo operators. Find out what the market has been like for them, what has been hit hard, what has not, profitable niches to operate in, etc. The members and staff will also be a great resource for getting info on the state and local regulations, etc. This industry is full of a great bunch of guys (and gals) that I have always found to be friendly and helpful, even to the newcomers. With some luck you may also find a partner... a company that will use you as an affiliate and start sending you some overflow business.

    Whatever you do, this business is FULL of lawsuit potential, so I would recommend a good attorney and incorporating (personally I prefer the LLC structure, but that or a sub-S Corp is good).

    For what it's worth, the national companies average profit margin is only about 20%. Some limo companies do better, some worse. Overhead, office expenses, 24 hour dispatch personnel (usually a must for corporate operations) etc., all takes its toll. Will you be operating from home or an office? What will you specific markets be? Retail? That market has taken a big hit in a lot of areas because people's discretionary spending is not what it was even six months ago. Some of the party buses and similar large capacity limos may be doing better where many people share the cost. Corporate? Well then you may need several sedans. There are usually established companies out there will loyal customers. How will you get your client base ramped up? Where will they come from? With the decimation of the investment banking, banking, real estate, and retail industries, that is a key question.

    Most importantly, make sure you get answers to all this and plan it out in a real business plan. In today's market, I can't imagine starting a new business of any kind, much less a transportation business in a market where travel has been hit hard, without a good plan with the key elements in place and a contingency fund for the "what if's."

    As a specialty provider in the industry, our firm helps small and mid-size companies by enabling them to establish a professional low-cost, high-quality reservations and dispatch center for their limousine company without the costs and time investment required to do it in house. We have a lot of limo companies as clients. I can say that the most successful in these economic times are those that have specialty market niches that they OWN either through branding, contacts (it never hurts to know the right people) or marketing. Breaking into a new market when new customers are scarce (my personal opinion is that the market overall is continuing to shrink, so most of your customers are probably going to have to come from people dissatisfied with someone else's services) is not easy or cheap to do. That applies to the corporate "repeat" business... the retail business still has shoppers and if you can get in front of them and make your case, you probably can obtain business. Getting in front of them is a whole topic unto itself. Alliance with bridal shops? Hotels? Restaurants? Clubs? Hopefully you have planned out some good entry strategies and lined up your clients.

    As far as how many limos to purchase, that depends on a lot of factors. There are companies that started with zero and farmed out everything until they built up a client base. There are those that overbought fleet or bought the wrong cars and ended up going out of business. Know your market and what they need, buy good quality used vehicles first and only what you HAVE to have to support your business. Used cars are cheap right now and you can always pick up another one if you need it with little notice. Finally, I would make sure that you have cash reserves and are not depending on earning an income for a while since you will be investing in marketing and expanding. remember that the credit market is almost dead. Even finding loans for cars is difficult and the interest rates are obscene considering these banks borrow the funds from the Fed at damned near zero rates. Even credit cards are getting ridiculous. Capital One just doubled rates to most of their card holders, AmEx is instituting credit limits, credit lines are being cut due to all the defaults. The old days of financing the business with a second on your home and vehicle leases and credit card is as dead as Lehman Brothers.

    Well, that's at least some of my comments. That and a couple of bucks will buy you a cup of coffee, so take it for what its really worth. If I can help you with anything else, feel free to email me. I have written about 20 business plans myself, and been a chief acquisition officer of a venture firm where my primary role was to review business plans. So my emphasis is always to plan, over plan, be prepared and no matter what, never take your own assumptions too seriously. Costs always run over, time always doubles to get where you want, and sales never materialize to the level you think in the time you think they will. Welcome to owning your own business! All the best of luck to you!
    Cheers,
    Kurt von Strasser
    kurt@LimoLive24.com
    http://www.LimoLive24.com
    LimoLive24.com
    Phone: 800.676.9095
    Limousine Business Process Outsourcing
    Reservations Center, Web Chat,Text/SMS
    Customer Care & Marketing Services


  6. #6
    Senior Member DenverLimo's Avatar
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    Bad time to get into the business atleast in Denver !
    "Girls might be able to fake orgasams, but men can fake whole relationships"

    www.limoservicedenver.com

  7. #7
    Member Limo Padawan
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    Advice hmmm I wont give you advice but I can make a suggestion. Don't do it now. This is the wrong time to start a transportation Co. You will be shooting yourself in the foot, Waite at least till next year.

  8. #8

    Default

    You can do a search of this forum and find all the answers to all your questions. I think I spent 20 hours going through all the threads for research purposes. This would be a great place to start! Good luck!
    Lenora Bowman

    Johnny B's Limousine Service
    Charlotte, NC
    We have the only Pink Escalade Limo in the Carolinas!
    www.limojohnny.com



  9. #9
    Senior Member Cedar Mill Limousine's Avatar
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    I believe recessions can be the best time to get into new ventures. Just make sure you are business savvy and have done your research.
    Rich Rottier
    219.808.0976 | richrottier@gmail.com

  10. #10

    Default

    Quote Originally Posted by Ali View Post
    Welcome to the site. What state are you in? Each state has different regulations and permits required. Perhaps someone from your state can chime in.

    I also hate to break it to you, but the livery industry is not as easy as it seems. Especially these days are pretty rough. Some companies are doing fine, but others are on the verge of closing their doors.

    I am in New York State.

    Do you know why some of those companies are closing?

    And the companies that are doing well, what are they doing right?

  11. #11

    Default

    Quote Originally Posted by Kurt@LimoLive24.com View Post
    Wheels of Gold is a good start, I agree. But the content is quite light and it will leave you with less than a full picture of the limousine business and operations. First, you need to get a really good idea of the local market you are in, whatever that is. Is there a local limo association? You can usually call them and arrange to attend a few meetings without signing up yet to see what is going on. Talk to the local limo operators. Find out what the market has been like for them, what has been hit hard, what has not, profitable niches to operate in, etc. The members and staff will also be a great resource for getting info on the state and local regulations, etc. This industry is full of a great bunch of guys (and gals) that I have always found to be friendly and helpful, even to the newcomers. With some luck you may also find a partner... a company that will use you as an affiliate and start sending you some overflow business.

    Whatever you do, this business is FULL of lawsuit potential, so I would recommend a good attorney and incorporating (personally I prefer the LLC structure, but that or a sub-S Corp is good).

    For what it's worth, the national companies average profit margin is only about 20%. Some limo companies do better, some worse. Overhead, office expenses, 24 hour dispatch personnel (usually a must for corporate operations) etc., all takes its toll. Will you be operating from home or an office? What will you specific markets be? Retail? That market has taken a big hit in a lot of areas because people's discretionary spending is not what it was even six months ago. Some of the party buses and similar large capacity limos may be doing better where many people share the cost. Corporate? Well then you may need several sedans. There are usually established companies out there will loyal customers. How will you get your client base ramped up? Where will they come from? With the decimation of the investment banking, banking, real estate, and retail industries, that is a key question.

    Most importantly, make sure you get answers to all this and plan it out in a real business plan. In today's market, I can't imagine starting a new business of any kind, much less a transportation business in a market where travel has been hit hard, without a good plan with the key elements in place and a contingency fund for the "what if's."

    As a specialty provider in the industry, our firm helps small and mid-size companies by enabling them to establish a professional low-cost, high-quality reservations and dispatch center for their limousine company without the costs and time investment required to do it in house. We have a lot of limo companies as clients. I can say that the most successful in these economic times are those that have specialty market niches that they OWN either through branding, contacts (it never hurts to know the right people) or marketing. Breaking into a new market when new customers are scarce (my personal opinion is that the market overall is continuing to shrink, so most of your customers are probably going to have to come from people dissatisfied with someone else's services) is not easy or cheap to do. That applies to the corporate "repeat" business... the retail business still has shoppers and if you can get in front of them and make your case, you probably can obtain business. Getting in front of them is a whole topic unto itself. Alliance with bridal shops? Hotels? Restaurants? Clubs? Hopefully you have planned out some good entry strategies and lined up your clients.

    As far as how many limos to purchase, that depends on a lot of factors. There are companies that started with zero and farmed out everything until they built up a client base. There are those that overbought fleet or bought the wrong cars and ended up going out of business. Know your market and what they need, buy good quality used vehicles first and only what you HAVE to have to support your business. Used cars are cheap right now and you can always pick up another one if you need it with little notice. Finally, I would make sure that you have cash reserves and are not depending on earning an income for a while since you will be investing in marketing and expanding. remember that the credit market is almost dead. Even finding loans for cars is difficult and the interest rates are obscene considering these banks borrow the funds from the Fed at damned near zero rates. Even credit cards are getting ridiculous. Capital One just doubled rates to most of their card holders, AmEx is instituting credit limits, credit lines are being cut due to all the defaults. The old days of financing the business with a second on your home and vehicle leases and credit card is as dead as Lehman Brothers.

    Well, that's at least some of my comments. That and a couple of bucks will buy you a cup of coffee, so take it for what its really worth. If I can help you with anything else, feel free to email me. I have written about 20 business plans myself, and been a chief acquisition officer of a venture firm where my primary role was to review business plans. So my emphasis is always to plan, over plan, be prepared and no matter what, never take your own assumptions too seriously. Costs always run over, time always doubles to get where you want, and sales never materialize to the level you think in the time you think they will. Welcome to owning your own business! All the best of luck to you!

    Wow, that is some great information there. To start, I have counted 14 limo companies in my Area ( Im in upstate New York) in the phone book. I'm not sure if there is any local limo association( to be honest, I never knew the existed).I'll have to look for any in my area.

    As far as speaking with other limo operators, I've thought about that, I didn't think people would be willing to give info to their potential competitor.

    I will have a attorney for sure. I plan on operating from a office.


    I plan on providing service for weddings, companies, night out on the town, sporting events etc.

    I dont plan on starting this company until next year. Maybe spring/summer of 2010. When weddings, and proms are in affect.Hopefully, the market will improve by then.

    As far as getting clients, I plan on marketing through billboards, phone books, fliers, word of mouth, and my website.Maybe even radio ads if I can afford it.

    Also, where should I apply for the loan? credit union or banks? and how much should I request? I was thinking $50,000 should get me 2 or 3 limos, right? is that enough? where should I look to purchase the limo?

    I plan on saving my contingency fund now, so by next year, It will be available.

  12. #12
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    Amilli,

    What part of New York State are you in. I am located in New Paltz, NY which is hour and a half north of New York City, and a hour south of albany. Right now is definately not the right time to get in this biz. I can tell you we are all hurting right now, business is nothing like it should be. All i can tell you is do your homework before you start. If you need any advice give me a call 845-255-8800.

  13. #13
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    Exclamation start limo business today

    Quote Originally Posted by amilli View Post
    I'm looking to start my own business. I've thought of numerous ideas for businesses. I came up with the Limousine business because I see there is an establish market for it. I thought about how often I've seen limos at weddings, night out on the town, sporting events etc. I said, this must be a very profitable business.

    I've done much research regarding this business. My research continues. I found this website and thought this may be a good way to speak with others who are involved in the business.


    Im hoping you guys can give me some advise on things I need to know in starting my limo service. Things such as where to purchase the limos, what licenses are needs, How many limos should I start with?

    Is this a real profitable business?

    How many drivers should I hire?

    Best way to market?

    Or anything else you guys can give me advise on.

    I starting from the beginning.......
    In todays times limo busines is going to disapear or become something else because there is no business not even to pay or just to pay bills, you get in this business today without eny regular clients and without eny corporate contracts which will keep you bussy 5-7 days per week with one vehicle you will go broke in a couple of months, stay away from this business this is definately the wrong time for it.

  14. #14
    Senior Member PhillyLimoGuy's Avatar
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    I have a suggestion for you. Instead of opening up a business with cars, insurance and tons of overhead, setup a website and some advertising. Monitor your hits to your site, and how many trips you book. Find a local company that will do your business for a six month period. If, in the six month period you see many trips come in with you advertising, start rolling your own fleet. If you don't see the profit flowing in the door, go and put an application in at another company. At least you can work out a deal with the owner of that company for any additonal work you bring from the outside.

    Philadelphia Limousine Guy

  15. #15

    Default

    Quote Originally Posted by tony35 View Post
    Amilli,

    What part of New York State are you in. I am located in New Paltz, NY which is hour and a half north of New York City, and a hour south of albany. Right now is definately not the right time to get in this biz. I can tell you we are all hurting right now, business is nothing like it should be. All i can tell you is do your homework before you start. If you need any advice give me a call 845-255-8800.
    Im in Buffalo. Im looking to start this business next year. Maybe next spring or summer. Right now, Im looking to get information, do my research.

    What I type of licenses do you need?

    What are the steps you took to start your business?

    What the slowest season for the limo business?

    What type of loan should you get? I was thinking of getting a $50,000 business loan. Should I get it from a bank, credit union?

    I know I need my DBA, business license, Tax I.D., is there anything else Im missing?

    I will need insurance, full liability , good attorney.

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