How to Start Limousine Business

Knowing how to start a limousine business can help an entrepreneur find a very lucrative niche market within their community. Not only can the money be good, upwards of $100 per hour, but there is the chance to meet new people and work outside of the 9-5 grind. That doesn’t mean life is easy running a limo business. There are safety and licensing concerns that must be addressed, maintenance issues that crop up, and punctuality that must always be met.

This heart of this business is the vehicle itself. Purchasing a vehicle or leasing one are both options, but with a lease, there may be mileage and damage concerns that could increase your financial responsibilities. The down side of ownership is that with a lease, you can often trade up to a new model for around the same cost. Secure at least one vehicle and then you’ll be ready to follow these additional steps.

1. Get your chauffeur’s license.

Your standard driver’s license is not good enough for a limousine business. You’ll need to become certified as a chauffeur, which will allow you to legally transport passengers on roadways. The requirements to obtain this license vary within each jurisdiction, so check with your local Department of Motor Vehicles to see what you’ll need to do.

2. Obtain your general business license.

Almost every community requires a general business license so that you can charge passengers for your services. This is usually completed at the state or provincial level and most of the time it can be completed online. You will need the general business license for obtaining insurance. You will likely need a specific secondary license as well, but you won’t be able to obtain that until you’ve obtained insurance.

3. You must have specific insurance policies.

Because you are transporting passengers on legal roadways, you are responsible for their safety and health while they are riding in your vehicle. You’ll also need to insure your limousine and likely need to cover at least some sort of protection on your own health as well. Some companies have specific limousine policies, while others may require you to pursue a livery-for-hire insurance policy. This may take 4-6 weeks to secure.

4. Apply for any additional licenses that you may need to have.

Your jurisdiction may require you to collect sales tax on the fares that you charge. You may need to provide proof of your insurance when you apply for a license to operate the limousine within a community. There may be secondary licenses to obtain at the city, county, and state/provincial level as well. After your general business license, you may need 3 additional secondary licenses and a sales tax collection authorization before you can legally transport passengers.

5. Invest in an excellent GPS system.

Don’t rely on your memory as your drive your passengers around. Although many passengers may all wish to go to similar locations, a good GPS system will let you see traffic patterns, help you find places you may not know about, and provide a higher level of customer service. Don’t just rely on the GPS system either. Have local maps in the limousine as well just in case.

6. Set your prices in conjunction with other businesses.

If there are other limousine businesses in your community, then they’re not going to be very happy to see you come in and become competition. Although you can’t stop ill feelings, you can set competitive prices so that you’re not undercutting them. Having a grand opening special of 20% off is one thing. Charging 20% less than anyone else might give you a short boost of business, but eventually it’s just going to start a price war where everyone is racing to the basement.

7. Keep your limousine fully stocked.

The whole point of hiring a limousine is to have a luxurious experience. Make sure your chests are stocked with ice, drinks, and snacks. Having a media center can help customers watch shows or movies while they are being driven to their destination. A high quality stereo system can not only be an effective marketing tool, but it can also let people start or continue the good time they want to have.

Knowing how to start a limousine business revolves around your ability to get the proper driver’s and business licenses. If you can secure those and find a vehicle that you can afford, then you’ll have the ability to start making some money in a very fun way.

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