The Limos.com Forum Has Moved!!!

Hello. I am of course new to the forum, and I obviously have an interest in the limousine industry. I live in West Kentucky, very rural area, but Paducah has approx. 70,000 people, and the outlying towns have quite a large number of upper-middle class and higher neighborhoods. We have a casino nearby. There is only one limo service that is 50 miles away. The business is primarily a tuxedo rental, but they have two '00 stretch lincolns that run to Proms and a few weddings...they literally never move. I attribute this to lack of advertising and exorbitant rates.

I am a full time police officer. I have an interest in a Limousine service. I would like to work part time. Of course 24 hour availability is no problem for me, and I have the most flexible schedule so that's not a problem. I've read statistically one car would not be profitable for a long period of time. I'm also gathering that insurance is outrageous, just like wreckers and such. My intention is to return 100 percent of receivables back into the limo and business until I would be out of the red. Also, I would definitely do just a good used unit, we're not very extravagant people around here. From everything I've read, sounds like this venture is just like any other business, you've got to be able to plant seeds for a couple years to reap what you've sown. I'm not sure on KY's limo regs *if any*. I guess my main question is, there's not really any services here to gain experience, no price comparisons, and I don't know if the area is ready for another Limo service. What would be some ideas to determine a demand for such service? I get quite a bit of positive responses when I ask people but positive responses don't make limo payments. Sorry if I sound repetitive like everyone else who posts, I hate for you guys to have to answer the same questions over and over, I guess it just feels good to see that answer to YOUR question, so thanks for any replies.

This message has been edited. Last edited by: SignatureLimousine,

Hi All,
I am in the process of purchasing a Stretch myself. I live in Northern VA and have a good friend that already has a couple of Executive Sedans and a Party Bus. He said he can throw me a lot of work, plus i am messing around with online marketing as well. Hopefully Ill be able to make money with this, we shall see :-) Way I see it if worse comes to worse Ill just sell the stretch and hopefully get my money back.

Im looking forward to sharing my experiences in this new venture. Salicete I see you are in my area as well. Good luck! Maybe we can work some jobs together, if you ever need another stretch I have a 98 Krystal Koach, Black :-) Ill look out for you too.

Im sitting here working on my website right now. Im gonna finish it tomorrow though, Its kinda late I know Id foul it up some kind of way if I kept working on it.

Heres my email jpaulwhite@gmail.com

Well, you certainly are getting a lot of great information here. I just feel the need to weigh in and clarify some things that some of my collegues have mentioned.

Insurance
If you plan to have someone drive your car for you as Tony (TXLimoGuy) has recommended, you need to make sure you have Workers Comp Insurance to cover him/her. Find out what that is going to cost. It is measured in a percentage of projected payroll for the upfront premium and adjusted on the tail end at the end of the premium based on what you actually paid. It can run anywhere from $15 to $30 dollars per $100 of payroll paid out. Also get a quote on your General Liability insurance to see what that nut is going to be each month. There are only a handful of carriers nationwide who insure limousines for hire

Making Money

Seriously, don't plan on this for three to four years. The fact that you are currently a police officer is a good thing as most law enforcement people get a fairly decent salary per year which will help fund your new adventure which will not fund itself.

Pricing

You mentioned the outrageous pricing you encountered. Stop to think for a minute that one of the reasons for this is simple economics. We have extremely high operating costs with insurance, car payments, fuel, wages, maintenance etc. and the people you encounter probably have to charge higher than the national average per hour simply because they don't have the volume of business most do in a rural area. My insurance payment on a car is based on a small portion of 50 runs in a month per car. The rural guy has to take a larger portion out of say 10 runs in a month.

B]Marketing[/B]

You do have an advantage here being in a town of 70,000. It is easier to try to get your name into the head of 70,000 people than say 300,000 or 500,000. Do check with local hotels, bridal stores, even jewelers to see how many weddings a month they are involved in. But, remember, this is only one day a week business. Ask the hotels if guests ever ask about transportation and how often. Check with your local Chamber of Commerce on whether you have a local Convention & Visitors Bureau or a Board of Trade or some agency that deals with business to business relations. Checking for marriage license issued is a good idea as mentioned below. Check with your local funeral homes also. (Funny how weddings make me think of funerals!). Funeral homes may have overflow work or may want to dump their limo all together. I talked six of them in to doing just that and now, people are dying to do business with me and the mortician.

As for the phone thing, I do think a consideration can be made here. People in big cities are always in a hurry. People in small towns tend to be more laid back. I think you would do just fine with a high tech answering machine that takes a message and then calls your cell phone to play the message or pages you to check when convenient. A $100 investment. If you are the onluy game in town, they'll leave a message as there is no one esle to call. In my city, a missed call means the next number in the Yellow Pages is about to be dialed.

Speaking of the Yellow Pages, in a small area like you live in, the ad is more likely to be in the range of $300 to $500 a month for a 1/4 page ad. My book is distributed to 400,000 people and my 1/4 page ad costs $764 a month. If you have more than one book in your area, then things can add up to $1500 a month or if you advertise in books slightly outside your own community.

Tonly did give you execellent advice on searching potential clients and what uses they might have in your area. Here is another novel idea. Go to the tux shop and ask them how much they want to buy the limo portion of their business. If they are making money with it, you will politely be told, "It is not for sale". If it is marginal, they will open discussion with you. If it is horrible, they will give you an immediate price.

Best of luck to you!

I like you am a police officer starting a limo business. I'll be retiring shortly and don't want to sit home and vegetate.

In my state, Maryland, we have relatively easy licensing certification procedures, but it is still a chore. I found that the most frightening aspects of a start-up limo business are the liability and worker's compensation premiums. Also, many carriers won't touch limousines for hire.

Before you even look at cars, you should do some research online to see what the licensing, certification, inspection and insurance requirements are in your state. It is a sad fact that some folks would have to put their car on the road all day every day just to make their monthly overhead once car payments are figured in.

If you just want to make a few extra bucks, or have some fun driving a limo, go work for that company you mentioned a few towns over. It is going to be hard with one used car and part-time availability.

That is not to say it can't be done; many have made it work, but it won't be easy or fun, at least not at first.

I'm paying cash for my cars, and I have enough cash to finance my business for six months, even if I don't book a single ride. I can also afford to fall flat on my face and bail out without going broke.

It sounds like you are in a rural area. As has been mentioned, do folks out there even rent limos? That is not meant as an insult just a frank question. Fortunately I live in a major metropolitan area with 3 major airports, but it still won't be easy. I can't imagine starting up even 30 miles North of where I am now, (midway between Washington D.C. and Baltimore, Maryland. That small distance could break me. How close are you to a major city or international or major airport?

Sorry to be so long-winded; here is the Reader's Digest Version-

1.Get a firm handle on your start-up costs and ongoing overhead.
2.Pay cash for your cars if possible.
3.Know, and comply with all licensing requirements in your locality.
4.Hook up with wedding planners, hotels and restaurants in your area, they can give you lots –o referrals.
4.Got schools and lots of churches? That could make your year- April through June, Proms and Weddings.
5.OLNY hire folks you can trust. Your car is your business and you don’t want it in a ditch or impound lot.
Good Luck, and think about that mutual fund that was mentioned in another post.

Unless you have a burning desire to get into the Limo business, I would suggest a good mutual fund company such as Fidelity to invest your money in. You will make a lot more and have a lot less headaches.

From reading your post, it sounds like you are in a low income area if you think $800.00 is a lot of money for a Limo charter. I too tried a low income area and it just did not work out. You mentioned that you get $6.00 per hour as an EMT, like I said I am in a low income area and our EMT's start at $11.00 per hour. Go figure.

I would say stick with your Day job. You can bet that most of the time the other Guys Limos are going out for a lot less in conjunction with the Tux rental. I worked for a Guy who had a Jewelry business, after making several thousand on a ring, he could well afford to throw in a Limo for a couple of Hundred.

First off Proms are typicaly the Bread and Butter of Many a Stretch Limo company and the rates typicaly go up for those events as well as the Minimum required hours of reservations.

My typical 3 hour minimum reservation jumps to 5 hours on prom weekends But I do not jump my rates as many do. I was never in this to gouge anyone but to have fun and grow and in one year I have gone from 1 120 inch stretch Lincoln to 4 Stretch Vehicles and a Stretched Sedan.

Yes iNsurance is Expensive i pay for instance $14,000 a year for my 5 vehicles and as a new company with only two years experience under my belt that rate is better than alot of companies I checked with. Rates are usually calculated by experience factors and the cost of Vehicles and the percentage usually 2.5 to 5% of the cost is used as a factor in the rate fixing for your cars. The More experience, with No claims the better the rate gets as you go along. Also many Insurance companies require and demand Veto powers on any new Employees as far as coverage goes. Oh Yes you can stil hire them but they may cancel your Insurance or tell you that paticular driver wont be allowed on the Policy. they also like Long term employees to stay on board with you and thats another factor.

Great service will ultimately carry the day for you and follow through with your customers.

truthfully you need to figure out just why There is no other service, do the demographics check the statistics on Marriages with your Local Court house clerks office.

A used Vehicle does not mean its a Bad vehicle either. All Mine are new but I had to do it that way for myself but I could have just as easily started with a used one.

the Answering of the phone is an issue as a Tax paying member of society I would hate to think you were fumbling to answering a Limo call while pulling a drunk over of worse yet some hardened criminal who would rather shoot you then talk with you. Tux Rentals can be a very Lucrative Business and remember they make their primary mOney during prom season as well.

once you do your home work then you will have to decide if it is feasable and doeable money wize.

best wishs what ever way that one goes. most Fail in their first year do to lack of planing and not understanding their market. Dont be a statistic.... Be a poster child for success..

I guess first off, I'm going to figure out why the only Limo service in a near 100 mile radius never moves, except for proms. I remember about five years ago some friends of mine tried getting one of their units, and it was outrageous, like 800-900 dollars for six hours. That may be reasonable in some places, but not here. I've never seen one piece of advertising from them, they're just an established place, and I can tell you they make a killing on tuxedo rental.

My job is very flexible, I already work 12-24 hours a week doing EMS work. Of course 6 dollars an hour driving an ambulance just sucks. But that definitely is a load of work to deal with, on top of my job.

Running a part time limo business while holding down a full time job is a challenge. Operating in a rural area adds another layer of challenges.

Here are a couple of things to think about:
1) People call for limos all hours of the day and night, seven days a week. While you are working the FT job who will answer the phones and what happens if you miss calls? In experiments I have run just to test this question I have observed that about 75% of callers will NOT leave a message if you do not answer the phone. So if you are working a regular job and can't get the phone you will miss a lot of potential callers and potential business.

2) To operate one used limo out of your house at a breakeven rate you would need to book it consistently about 14-15 hours per week at $75/hr plus gratuity & fuel surcharge. That is 3-4 jobs per week. You would earn about $16,000 for the year in chauffeur pay and gratuities if you did all the driving yourself in that example. (Note - I do not consider chauffeur pay as profit, it is wages). Doing all the driving is another challenge on top of having to answer phones and work a FT job. Even when I started with one car I still had one part time chauffeur on staff.

3) For the company to make a profit you would need to book the vehicle more than 14-15 hours per week. That may be a challenge in a rural area with limited population.

4) Neither example above included the expense of someone on staff to answer your phones.

5) After buying your car do you have the cash saved up to make 4-6 months worth of car payments, insurance and yellow page ads (figure $1000-1500/month) if things don't take off quickly? Some pressure is off if you can just pay cash for the first car.

6) To really earn start earning some money in a rural area you will need to be able to consistently run one or (even better) multiple vehicles more than 15-25 hours per week. You asked, how do you gauge that demand? You need to look at demographics - what percentage of the population within your area earns over $75,000 per year (ie have enough discretionary income to be potential users of luxury services). Take a look at what type of nighttime activities are going on in your area. How many families are going out for 5 star dinners and how often? Is there a club scene for young people to ride to? How many people are getting married each month in your area? Are there any major league sports teams or major concert venues within a one hour drivea nd do the people in your area have the money to attend them? How would you get a piece of the casino business? Where are those customers coming from and how can you reach them?

And most importantly, if those other competitors limos aren't moving you better figure out the real reasons because your answers may very well be right there.

The nice thing about starting with a used limo in a rural area is that at least if it doesn't work out you can sell the car for close to what you paid for it and all you have lost is 1-2 years of good sleep.