Sample Business Plan on Limousine Service Business Plan

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EXECUTIVE SUMMARY                                                         

 

The Business Concept

 

XYZ Limousine Service, LLC (XYZ Limousine Service or the Company) specializes in providing a unique and client intense luxury transportation service. With more than ten years of chauffeuring experience, the owners bring a thorough understanding of clients’ needs to the business venture. The Company is located in CITY, Texas.

 

The Company offers full-service limousine and tour transportation services in CITY and the surrounding area. Services will include funeral packages, wedding packages, tours and hourly rentals. XYZ Limousine Service will provide excellent client service with the most luxurious vehicles on the market. All this will be at affordable prices enabling it to become known as the best company of its type in the greater CITY area.

 

XYZ Limousine Service’s will provide entertainment in its vehicles. Items such as DVD and CD players, a bar for ice and cold beverages, flat screen televisions, candies or mints, current newspapers and magazines will be readily available. All vehicles will also offer Wi-Fi internet services and cellular phone capabilities. The Company will allow alcohol in its vehicles as long as the clients are responsible and of legal age. Clients will be charged or they will be welcome to provide their own alcohol beverages.

 

 

Excellent Market Opportunity

XYZ Limousine Service will take advantage of several factors to drive its growth. Limousines were once a vehicle for the wealthy businessmen, movie stars and politicians. Today, however, people are hiring limos in increasing numbers for occasions such as anniversaries, weddings, birthdays and stag or hen parties. Limousines are an obvious choice for party loving people. No matter what the occasion, the ultimate choice is a super stretch limousine or luxury vehicle and these are always in hot demand.

 

The Company will also take advantage of the tremendous business, tourist and population growth in the greater CITY area as a primary driver of its business. CITY is among the ten most populous metropolitan areas in the US. According to the census bureau, the CITY metropolitan area added more than 130,000 residents between July 1, 2007 and July 1, 2008; this was the second-highest number in the country after Dallas-Fort Worth. According to a 2010 Forbes article, CITY area counties were among the top counties in the country that experienced the most income and job growth over the past few years.

 

Profitable Growth

XYZ Limousine Service expects to gain a profitable market share within a very short period of time. Determinations have been made for the size of the market, amounts of budgeted advertising and promotional dollars, the number and kinds of distribution channels and the competitive landscape.

 

Projections call for the Company to generate revenues of $425,000 in its next twelve months. XYZ Limousine Service will achieve strong growth over the next several years, reaching $675,000 in revenues and more than $285,000 of net income by the fifth year.

 

The Opportunity

U. S. Taxi and Limousine Industry Overview

 

Limousine industry revenue in 2004 reached $4.3 billion, up from $3.5 billion in 2003. In the same period, Limousine, Charter and Tour (LCT) magazine reported, “Business increased dramatically; with a whopping 71 percent reporting gross revenue increased an average of 25 percent. The estimated number of operators in 2004 is 11,722, up nearly 4 percent from 2003.  The estimated number of total vehicles in service is 126,597, up 2 percent from the previous year.” This data was derived from Dunn & Bradstreet, Info USA and LCT sources. ¹

 

The approximate number of chauffeurs in the United States totals nearly 211,583, including full-time and part-time drivers; this does not include owners who chauffeur clients. Statistics reflect, in fleet companies that average less than 75 cars category, 9.8 cars are typically inventoried. For companies in the more than 75 cars category, the average fleet was 195 cars – sedans accounted for half of all fleets. This industry is considered labor-intensive, according to Hoovers, Inc. and First Research, with the average annual revenue per employee at nearly $60,000.  Drivers are often paid by flat wage or by percentage of revenue.  It is common to hire independent contractors in this field.

 

There have been many changes in the chauffeured limousine market sector over the past several years, including more female drivers, currently averaging 10.6 percent of chauffeur employment. Creating a website presence is another changing factor in this industry; in 2004 nearly 80 percent of total chauffeur companies had a website.

 

Business and leisure travel drive revenues in the taxi and limousine market sector. Hoovers, Inc., market research firm, states there are approximately “5,000 companies with about $4 billion in combined annual revenue.” However, it should be noted this industry is fragmented with no major companies dominating it. Good marketing techniques increase profitability and individual successes, making it plausible for smaller companies to compete with larger ones due to “few economies of scale in operations,” says Hoovers. ⁴

 

Limousines and taxis are both dispatched when a customer calls in with a request for service. Where taxis often pick up customers by both telephone reservation and at being “hailed” on the street or at taxi stands, limousines service is typically reserved by telephone request only; vehicles and drivers are usually leased by the hour or offered as ‘for hire vehicles’ (FHV) at a flat rate to accommodate specific occasions such as road trips or day outings.

 

Most limousine companies have a central dispatch office location, own a fleet of vehicles, often have fuel tanks and pumps, and in some cases operate a shop where vehicle maintenance and repair is handled.

History of Limousines

Research shows chauffeur-driven vehicles date back to circa 1700s, during the era of horse-drawn carriages. Often viewed as a service utilized primarily by the wealthy, carriages were drawn by handsome, well-bred animals. Carriages were often laced in gold or other exotic materials. They were separated by partitions to allow privacy between the driver and the carriage’s occupants.

 

Long before the first engine powered carriage was designed, covered compartments with sliding sound-proof glass was used by chauffeur services. If a passenger needed to communicate with the driver the individual would simply use an intercom or slide back the glass partition to communicate. In modern limousines these partitions still exist. 

 

The word limousine is thought to be derived from the Lemovices, (meaning conquerors with the elm), a Gallic tribe in France. The French province of Limousin is associated with “long cloaks once worn by shepherds”, considered elegant and high class, according to Random House College Dictionary. ⁶