Many considerations need to
be made when thinking about starting any business venture. A professional limo company comes with its
own set of financial considerations and operation obligations. Below are some of
the expenses a Professional Limo Company can anticipate when in operation.
Payroll: Drivers, Staff, Maintenance
Payroll: When owning any business, payroll will be your
biggest expense. In the instance of
running a professional limo company, your biggest expenses are going to come
from paying your staff who deal with you customers face to face. A Driver who operates your EXPENSIVE limousine
might make out well with tips- but consideration should be taken if you would
like a “low-wage” driver in your company’s biggest asset every night, against
paying the extra buck to have a more seasoned professional. Don’t forget any
auxiliary staff you may need – Secretary, Accountant, and/or Maintenance
Personnel. Outsourcing all these
positions might be a cost effective option, but outsourcing will still be an
expense on the business.
Advertising/ Marketing
The “Yellow Pages”, business cards, brochures, rack cards, a
website- all of these things could be a way for your limo company to gain
customers. The competition will also
have all of these measures in place, and maybe even more. All of these
marketing and advertising avenues will cost your business money. You can do all of this “in house” if you have
the willpower and/or knowledge. The
legwork to get your business in the minds of people who want your service will
also be time consuming. This can also be done in house, but remember: Time =
Money.
Transportation: Limousines, Fuel, Parking, Insurance,
Permits
The cost of the limousines themselves will fill the majority
of costs associated with running the professional limo service. Used limousines can cost anywhere from
$15,000 - $45,000. There are many things
to take into consideration when making this purchase. Overall the general rule of thumb is “you get
what you pay for”. Buying an inexpensive
used limo in the short term might seem like the right idea, but could be costly
for the company for repairs and service downtime. Leasing a limousine might
also be a consideration to make. Fuel
will be a flexible expense throughout the business operation. In July 2014, the
national gas average was $3.64 a gallon. In the last 5 years, the national
average has been as low as $2.80 per gallon and as high as $3.99 per gallon. Other considerations need to be made about the
insurance and permits needed in your local municipality. Figures for these
expenditures will vary based on the location of the business.
With any business, profitability is dependent on several
different factors. “Newbies” in the industry are heavily persuaded to start
small and grow with business when starting out in the industry. Many new Professional Limo Company owners
have ambitious starting points to have 3-6 vehicles when their business opens,
but it is often highly recommended to start with one (ten passenger) limousine. If the business is growing an in manor which
calls for additional vehicles, then consider that next investment.
Written as a Fiverr Gig
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