7 Pitfalls to Avoid When Starting a Limousine Service Company

7 Pitfalls to Avoid When Starting a Limousine Service Company

  • By Neil
  • June 3, 2019

Starting any business can be a daunting task and the limousine business is no different. Every business needs a strong foundation to succeed otherwise you will end up broke, unhappy, and with a business that is circling the drain. Here are seven pitfalls to avoid when starting a new limousine or shuttle company.

1. Scale as You Grow.
When you’re starting out in the limo business, it’s a very good idea to start small. To begin with, a used Town Car and a 120” stretch limo are all you really need. The blinged out Hummers and party buses shouldn’t be purchased until you have a very strongly branded company and a steady revenue stream. Expensive purchases can sink a new company fast.

2. Marketing is the First Step.
Marketing should always be priority Number One when starting a new business of any kind. Simply buying a fleet of vehicles is not enough to succeed. First, you need customers that will actually rent the vehicles. Again, you should refer to my first piece of advice: start small. Ideally, you will only buy new vehicles when the demand warrants it.

3. Be Diverse.
While the prom scene might be the big profit arena for limousine companies, airport trips are the bread and butter of this business. Creating revenue streams in multiple areas will help keep a company afloat during a struggling economy. In addition to proms and weddings, successful limousine companies will also cater to funerals, airport trips, events, road shows, and as secure transportation. A fleet should be operating seven days a week.

4. It’s Not All Glamour.
If you want to start a limousine business because you have good memories of being in a limo for a party or a wedding, but operating a limousine service is a completely different experience. This is not a glamorous business. It’s taking people to the airport, consoling grieving loved ones headed to a funeral, or cleaning up puke after prom night. This is a service industry and it’s a good idea to keep that in mind when dreaming up what owning your own business will be like. Limousine companies require a great deal of precision and professionalism to run smoothly and effectively.

5. Be Ready to Train Your Employees
Unlike other industries when you can hire students after graduating, the ride service industry doesn’t have a secret university pumping out trained hires. Generally, you will need to train your own employees yourself. It’s a good idea to look to other service industry professions to find employees that are confident and have a good demeanor and positive attitude. Employees that already know how to work with the general public at 90 percent of the way to being good chauffeurs.

6. You Get What You Pay For.
The companies that can offer rock bottom prices are also usually the companies that aren’t licensed and don’t have insurance. Do not drop your prices to compete with such place. Instead, raise your standards to offer an immaculate experience to create lifelong clients that will keep coming back again and again. A lot of limousine companies don’t make it because their pricing structure isn’t enough to cover their overhead. Those companies suffer a slow death.

7. Hire a Consultant.
If all else fails, hire a consultant that knows the business. He or she can help you with mundane, everyday questions as well as larger umbrella questions. While starting a business can be an expensive venture, a good consultant can help you make money in the long run so it’s a good idea to splash out for one if you do not have very much industry experience.