So You Want to Start a Limo Service?

A limousine service seems like easy money, doesn’t it? Once you come up with the capital to purchase the limo, you can rake in the cash every weekend, driving major party animals to their soiree of choice and getting them back home safely.

Besides the car, you just need to be friendly, discreet and have a working knowledge of your city, right? Well, not exactly.

Let’s expand on some of the things you need before turning the key and accepting clients:

The car

Not just any luxury ride will do. The most-requested automobiles are the Lincoln Town Car and a stretch vehicle that will hold at least 10 passengers. Yes, that’s a big upfront expense, but you’ll need to please the customers if you want to have any.

The next question: Lease or buy? Given that huge cost, leasing might sound like an attractive option. But think again. Leases often come with mileage limits and heavy fees.

Marketing costs

You have to think about how customers can find you. You might not have problems attracting clients while barely trying during wedding season or while local high schools are having proms. But to really make a go of it and justify the cost of your fleet, you’ll need year-round business. That means a website: You’ll need to hire a designer and copywriter, preferably one with experience writing for the web, to make sure you reach your audience.

Some potential partners: Wedding planners, funeral homes and maybe even the largest companies in your area.

Legal and financial

Chances are you’ll want to set up a corporation for your business to reduce your personal liability. You likely will need legal representation to make sure you’ve addressed all the business and legal issues that could arise. The lawyer will also know whether there are any relevant state regulations that you might not be aware of.

You’ll also need to set up a way to accept credit card payments as part of a separate banking account for the business.

Parking

You might not have thought about this one. But you need a safe and secure place to park your vehicles when you’re not using them. Remember, you need them to be in mint condition, safe from dings from other vehicles and damage from poor weather.

Insurance

As with any commercial venture, you’ll need general business insurance policy. The largest need, of course, is for liability insurance in case one of your drivers is at fault in an accident. It will pay for property damage and medical treatment. Many experts recommend at least $1 million in liability coverage.

The best advice is to talk your business insurance needs over with an agent, preferably one who specializes in what’s called livery insurance.

Even though it may not be as easy as you might have thought, a limousine service can be a lucrative endeavor. It’s important, however, to make sure you go into it after fully considering the ongoing costs of it as well as what you’ll have to shell out upfront for the vehicles. Is it the right choice for you? Make sure you have all the information you need to answer that question.

Source: AutoInsurance