Over the years, I’ve met a lot of limousine operators.  Unfortunately, most of them have been completely miserable.  I used to assume they were unhappy because their businesses stunk, but that was only part of it.  On a deeper level these guys shouldn’t have been in the business in the first place.  Due to inexperience and a lack of knowledge, each of them had set unrealistic expectations and made catastrophic mistakes in the early days of their operations.  As a result, their companies were now circling the drain.

If you want to be a happy and successful operator, it’s imperative to build a strong foundation.  The decisions made today will set the structure and tone of your operation for years to come.  If you’re opening a new limousine business and want to get started on the right foot, take the following advice to heart.

Be Realistic – This isn’t a glamorous business.  It’s taking people to the airport, comforting bereaved family members at funerals, cleaning-up teenagers puke, and doing the same things day after day.  If you want to start a limo business because you had a great time in the back of a limo, think again.  This is a basic service business.  Most outsiders assume it’s fun and games, but it’s serious and requires a great deal of precision.  It certainly has its enjoyable moments, but at its core, it’s about transporting clients from point A to point B in a safe and timely manner.

Market First – A classic mistake many operators make is to buy a dozen vehicles without a day’s worth of marketing.  These guys figure “if you build it, they will come.”  This is incredibly ill-conceived.  Marketing should always lead purchasing . Ideally, vehicles should be purchased based on the results of your efforts.  As you grow, excess runs can be farmed-out to fellow operators and new vehicles can be bought when you have the runs to support them.

Start Small – If you only read one thing in this post, please read this: DON’T BUY A BUNCH OF BLING HUMMERS AND LIMO BUSES AND EXPECT TO TURN A PROFIT.  These vehicles should come after you’ve built brand identity and have a steady revenue stream.  Consider these limos icing on the cake.  Ideally, a used Town Car and a 120″ is all you need.  As you learn the business and expand your marketing, you can build the fleet.

When Empire (the biggest limo company in New York) expanded in Los Angeles, it didn’t start with a new fleet.   It started with a handful of used Town Cars and an old shuttle van.  Considering it opened shop the day before 9/11, this business decision likely saved the company.

Diversify – Niche marketing is the buzzword of the day, but the limo business is a stratified industry.  In addition to traditional weddings and proms, you have funerals, airport transfers, destination management, events, road shows, and secure transportation.  A fleet should operate 7 days a week.

It’s fine to start with single-service retail gigs, but over time it’s important to establish a variety of steady accounts that sustain business.  Even if one sector of the economy goes down, another will keep you afloat.

Hire A Consultant – If you don’t have extensive industry experience, hire a consultant.  Start-up capital may be limited, but a consultant will ultimately save you money.  An experienced consultant will offer advice on operations, fleet, payroll, software, dispatch, chauffeurs, and marketing.  The main guys who service the industry are Tom Mazza and Charles Tenney.

Recruit Talent – The industry doesn’t have a secret university pumping out fresh talent.  If you want great employees, recruit them, and then train them.  First-rate chauffeurs can be found at the airport.  Look for the guys with a good suit, neat sign, crisp look, confident demeanor, and a positive attitude.

Restaurants and Hotels are other venues with service-oriented professionals.  Since service is 90% of the job, why not get someone that has 90% of the prerequisite experience.

The last group to consider is retired military and civil service personnel.  These guys are consummate professionals.

Never Compete on Price – If you compete on price alone, your business will suffer a slow death.  Cutting rates is a losing proposition because the gypsies will always go lower.  How do you compete against an operator without a license and insurance?  YOU DON’T.  If you get down in the gutter, you’ll sacrifice the future for short term profit.  Most limousine companies go under because their price structure doesn’t match their overhead.

Just Be Good

I once read a business book based on one simple premise – “make sure your product doesn’t suck.”  This concept fits perfectly with the limousine business.  You don’t need a breakthrough idea or a unique marketing gimmick to be ahead of the game.  You just need to be good.  With an ever-growing field of craptastic companies plaguing the industry, if you correctly execute the basics, you’ll be successful.  It’s a very simple formula: start small, grow smart, diverify, and don’t suck.  Limo Nirvana awaits.