Rolling out a limo service

More than 20,000 limousines took to the road in 1992. Though the industry nosedived during the recession, it's now making a comeback. "The market is on an upswing," says Sara Eastwood, publisher of Limousine & Chauffeur magazine in Redondo Beach, Calif. According to the National Limousine Association (NLA), 72% of weddings used limos in 1992, compared with 17% in 1982.

Proms are also creating demand. "Limos for proms used to be a status thing," says Wayne Smith, the NLA's executive director. "Now, you'll find that demand outstrips the supply in just about any city during the prom season." Yes, limos are still a status thing, and elite wannabes are willing to pay the price.

Launching a limousine service doesn't cost a bundle, if you start out with one car before building a fleet. A new stretch Cadillac will cost you about $45,000. Or you could buy a used limo for about $20,000.

You'll need an additional $5,000 investment to cover the costs of a business license, insurance, local advertising, a portable computer, fax machine and cellular phone, which enable limos to double as offices.

Obviously, the best places for starting a limo business are major cities. But small towns with airports, growing business districts and affluent professional populations also offer opportunities.

A budding limousine service can bring in $70,000 a year; that's with just one car. If you hustle, you can expect to collect $50,000 in pretax profits, not counting tips. A second car will cost you a chauffeur's salary--usually a couple bucks more than minimum wage.

It's possible to gross $2,000 a month, working just weekends doing proms and weddings, charging $50 an hour. But if you want to make chauffeuring a full-time business, you've got to snag some corporate accounts. And expect a year to break even.

Sales meetings, conventions and airport businesses can keep you busy practically 24 hours a day. Tony Taylor, owner of Limousines by Linda, a 10-car fleet in San Diego, attracts corporate clients by offering bilingual drivers dressed in chauffeur uniforms. Taylor says about 85% of his business is corporate.

"When I can't handle all my accounts, I farm them out to other services for 15% of the take." Because corporations are often slow to pay, Taylor recommends that you carefully budget your money to cover dry spells.

You can drum up business by advertising in the yellow pages, mailing fliers and cold calling. Another way to sell your service is by offering a discount or underscoring a limo's convenience. "Just make sure you pay close attention to maintenance," cautions Taylor. "A dirty, clunky car can kill your business."

COPYRIGHT 1995 Earl G. Graves Publishing Co., Inc.
COPYRIGHT 2008 Gale, Cengage Learning