Limousine and town car service companies provide an array of specialty and luxury passenger transportation services via limousine or other luxury sedans, usually on a reserved basis. While a town car is essentially a sedan with a max capacity of five (including chauffeur), a stretch limo can naturally accommodate a much larger party.

An executive stretch will seat 6-8 passengers, a super stretch 10, and an ultra-stretch 14, there are also SUVs and hummers in which up to 20 people can ride. There are 163,652 limousine and town car service businesses in the US as of 2022, an increase of 2.9% from 2021.

The Taxi and Limousine Services market in the U.S. is estimated at US$36.7 Billion in the year 2020. China, the world’s second-largest economy, is forecast to reach a projected market size of US$64.5 Billion by the year 2027 trailing a CAGR of 19.2% over the analysis period 2020 to 2027.

Steps on How to Start a Limo Business

  1. Conduct Market Research

If you are considering starting a limo business, you would need reliable market research to be able to maximize profits from the business. The first step in the market research process for your limo business should be to develop market-based research questions in line with your overall business goal and objective.

In this regard, you should source information that will help you maximize your business, give you reliable information of what your potential market will be looking out for from a limo business, help you operate your limo business with less stress, and build the business to profitability.

a. Who is the Target Market for a Limo Business?
  • Wedding Planners
  • Film producers
  • Musical video producers
  • Celebrities
  • Churches
  • Corporate organizations
  • Event organizers and planners
  • Everyone who lives and works in the city where we operate.
b. Is Limo Business a Profitable Business?

Yes, the limo and town car services business is very profitable. The industry is projected to reach $64.5 billion by 2027.

c. Are There Existing Niches in the Industry?

No, there are no existing niches when it comes to the limo and town car service business because the limo and town car business is a subset of the car rental services industry.

d. Who are the Major Competitors?
  • Racing Limos
  • Thrifty Rent a Car
  • Imagine Lifestyles Luxury Rentals
  • Avis Budget Group
  • Fox Rent a Car
  • Hertz
  • Unidas
  • Enterprise Holdings
  • Falcon Car Rental
  • LVC Exotic Car Rentals
  • Royalty Exotic Cars
  • All-Stars Cars
  • Affordable Dreams Drive
  • Advantage Rent a Car
  • Alamo
  • Sixt Car Rental
  • National Car Rental
  • Easycar Rental
  • Easyrent
  • Dollar Car Rental.
e. Are There County or State Regulations or Zoning Laws for Limo Business?

Yes, there are county, and state regulations laws for limo and town car services business. Most states require drivers to be at least 21 to rent a limo. If you are under 25, many companies will charge you underage fees.

f. Is There a Franchise for Limo and Town Car Business?

Yes, there are franchise opportunities for limo and town car services business, and here are some of them;

  • Imagine Lifestyles Luxury Rentals
  • Turo Exotic Car Rental Automation
  • Priceless Rent-A-Car
  • Sixt Franchise USA LLC
  • Hertz
  • Racing Limos
  • Avis Car Rental
  • Advantage Rent a Car
  • Dollar Rent a Car
  • Thrifty Rent a Car
  • Right Cars
  • National Car Rental
  • Budget Rent-A-Car.
g. What Do You Need to Start a Limo and Town Car Service?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Limousine and Town Cars
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • Insurance
  • EIN (Employer Identification Number) / Federal Tax ID Number.
  • A Corporate Bank Account
  • Hackney Carriage Licenses
  • Employees
  1. Memorable Limo Business Names

  • Royal Purple© Limo Company, Inc.
  • Long Ride® Limo and Town Car Company, LLC
  • Justin Wallop© Limo Company, Inc.
  • The Life® Limo Company, Inc.
  • Victoria Island™ Limo Rental Company, Inc.
  • Just Gorgeous™ Limo and Town Car Company, LLC.
  • Fitz Gold© Limo and Town Car Company, LLC
  • Elites® Limo Company, Inc.
  • Pope© Limo Company, Inc.
  • James Steinberg© Limo and Town Car Company, Inc.
  • Thadeous Jones® Limo Company, LLC
  • Bullet Proof® Limo Company, LLC
  • Silver™ Limo and Town Car Company, LLC
  • G-Lock© Limo and Town Car Company, Inc.
  • Pitas® Limo and Town Car Company, Inc.
  • Mack TEN™ Limo Company, Inc.
  • Sharpie Black™ Limousine Company, Inc.
  • Providence© Limo Company, Inc.
  • Frugality Group® Limo Company, LLC
  • Ironic ™ Limo and Town Car Company, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Limo Business?

When it comes to the business structure for a limo and town car services business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Limo Business?
  • General Business License
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • Hackney Carriage Licenses
  • Zonal Permits
  • Signage Permit
  • Operational State Facility Inspections for your parking
d. What Type of Certification is Needed to start a Limo Business?

You don’t need any certifications to start a limo and town car service business.

e. What Documents are Needed to Open a Limo Business?
  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval (For your parking)
  • Certificate of Incorporation
  • Commercial Driver’s License (CDL) (at least a Class B CDL)
  • Hackney Carriage Licenses
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting your own limo and town car business, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Limo Business?

The startup cost for a limo and town car business is not uniform. But basically, a limo business will cost from $400,000 – $2 million to start, and that can easily go higher depending on your overall business goals and objectives.

b. What are the Costs Involved in Starting a Limo Business?
  • The total fee for registering the business in the United States of America – is $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $5,200.
  • Marketing promotion expenses – $800
  • The cost for hiring a business consultant (writing of business plans inclusive) – is $4,500.
  • Insurance (general liability, workers’ compensation, and auto insurance) coverage at a total premium – $15,400.
  • The cost of logistics software, accounting software, CRM software, and Payroll Software – $1,500
  • The cost for leasing a facility (long-term lease agreement) – is $65,600.
  • The cost for facility remodeling and installations – is $20,000.
  • The cost for the purchase of limousines and town cars: $1.2 million
  • Other start-up expenses including stationery – $500
  • Phone and utility deposits will cost – ($2,500)
  • Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $50,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $3,150
  • The cost for the purchase of office furniture and gadgets – $8,000.
  • The cost of launching an official website – $600
  • The cost for our grand opening party – $5,000
  • Miscellaneous – $5,000
c. What Factors Determine the Cost of Opening a Limo Business?
  • The size of limo business (number of limousines and town cars to start the business with)
  • The choice of location
  • The required licenses and permits
  • The cost of hiring and paying a business consultant and attorney
  • The cost for branding, promotion, and marketing of the limo business
  • The cost for furnishing and equipping the parking facility
  • The cost for insurance policy covers
  • The cost for registering the business
  • Cost of recruiting and training your staff
  • The cost for the purchase and customizing of uniforms
  • The cost for the grand opening of the business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

It is not compulsory to build a new facility for your limo and town car business, but if you have the required finance, it will pay you to build your own parking facility and administrative office. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.

e. What are the Ongoing Expenses of a Limo Business?
  • Gas and lubricants
  • Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
  • Salaries of employees
  • Maintenance and repairs
  • Insurance
  • Marketing costs
f. What is the Average Salary of your Staff?
  • Chief Operating Officer (Owner) – $68,000 Per Year
  • Admin and HR Manager – $48,000 Per Year
  • Fleet Manager $48,000 Per Year
  • Accountant $38,000 Per Year
  • Chauffeurs (Drivers) – $36,800 Per Year
  • Customer Service Officer (Call Center Executives) – $26,100 Per Year
  • Car Detailers -$24,000 Per Year
g. How Do You Get Funding to Start a Limo Business?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks.
  1. Write a Business Plan

a. Executive Summary

Royal Purple© Limo Company, Inc. is a registered and licensed car rental company with a niche in limo and town car services that will be based in Los Angeles, California. We are in business to rent or lease limousines and town cars to customers for a short period usually 30 days or less or for a longer period usually 12 months or more.

Royal Purple© Limo Company, Inc. has been able to secure all relevant licenses and permits to operate throughout the United States. We will ensure that we abide by the rules and regulations guiding the limo and town services industry.

b. Products and Service
  • Providing limousine services
  • Providing luxury sedan services
  • Providing chauffeur and personal driver services
c. Mission Statement

Our mission as a standard limousine and town car service is to develop a highly successful, profitable business that provides quality luxury transportation services in our city and to become a standard for an ideal limousine and town car business not only in the State of California but also throughout the United States of America and Canada where we intend to sell our franchise.

Vision Statement

Our vision is to become the number one limousine and town car service in Los Angeles with an active presence in key cities all around the State of California.

d. Goals and Objectives

The goals and objectives of a limo business are to make available limousines and town cars for use to people and organizations who may or may not have the finance to purchase such vehicles.

e. Organizational Structure
  • Chief Operating Officer (Owner)
  • Admin and HR Manager
  • Fleet Manager
  • Accountant
  • Chauffeurs (Drivers)
  • Customer Service Officer (Call Center Executives)
  • Car Detailers

Marketing Plan

a. SWOT Analysis
Strength:
  • Excellent operational history
  • Availability of latest limousines and town cars
  • Accurate estimates with no hidden costs
  • Experience and trained professional drivers (chauffeurs)
  • Excellent customer testimonials.
Weakness:
  • Not enough existing clientele to run at full capacity immediately
  • We will need a loan to build our parking facility and to purchase the latest limousines and town cars
  • The owner is currently running the business solo and will need to manage construction/build out the existing business
  • Lack of economies of scale.
Opportunities:
  • Build upon existing clientele
  • Online market, new services, new technology, and of course the opening of new markets.
Threat:
  • Loans diminish profitability until they are paid off
  • First-year will be financially tight while we gain customers and pay off loans
  • Competition in the area could increase
  • Management of employees requires time, money, and efforts
  • The transport department could change its regulatory status and decide to enforce strict regulations that can strangulate a new business.
b. How Do Limo and Town Cars Rental Companies Make Money?

Limo businesses make money by;

  • Providing limousine services
  • Providing luxury sedan services
  • Providing chauffeur and personal driver services
c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
d. Sales & Advertising Strategies
  • Introduce Your limo and town car services business by sending introductory letters alongside our brochure to corporate organizations, celebrities, filmmakers, wedding planners, households, and key stakeholders in and around your city and state
  • Print out fliers and business cards and strategically drop them in offices, libraries, public facilities, train stations et al.
  • Use friends and family to spread the word about your business
  • Post information about your company and the services we offer on bulletin boards in places like schools, libraries, and local coffee shops et al
  • Place a small or classified advertisement in the newspaper, or local publication about your company and the services your offer
  • Leverage on referral networks such as agencies that will attract clients who would need your customized services
  • Advertise our business in relevant magazines, newspapers, TV and radio stations.
  • Engage in direct marketing approach
  • Encourage the use of word-of-mouth marketing from loyal and satisfied customers
  • Join local chambers of commerce and industry to market your services.

Financial Projection

a. How Much Should You Charge for your Service?

The cost to rent a limousine or town car varies based on the make and model, specific location, dates, times, vehicle availability, and length of rental. But over and beyond, the average limousine rental prices are;

  • $95 to $150 per hour
  • $650 to $950 per night
  • $600 to $1,100 for weddings
  • $750 to $1,250 for proms.
b. How Much Profit Do Limo Business Owners Make a Year?

The profit a limo and town car service business owner is expected to make a year is not fixed, but on average, they can make over $175,000 in profit in a year.

  • What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the limo business (number of limousines and town cars owned)
  • The limousine and town car model, specific location, dates, times, vehicle availability, and length of rental
  • The location the limo business is covering
  • The management style of the limo and town car services business
  • The business approach of the limo and town car services business
  • The advertising and marketing strategies adopted by the limo and town car services business.
  • The number of years the limo and town car service has been in business
c. What is the Profit Margin of a Limo Business Product/Service?

The profit margin of a limo and town car services business is not fixed. It could range from 25 percent to 55 percent depending on the distance covered and other factors.

d. What is the Sales Forecast?

Below is the sales forecast for a limo and town car services business. It is based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year: $520,000
  • Second Fiscal Year: $1.2 million
  • Third Fiscal Year: $2 million
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Limo business?
  • The demography of the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of limo and town car businesses in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Limo Business?
  • Los Angeles, California
  • Las Vegas Nevada
  • Miami Florida
  • Washington DC
  • New York City, New York
  • Dallas, Texas
  • Columbus, Ohio
  • Oklahoma City, Oklahoma
  • Chicago, Illinois
  • Boston, Massachusetts
c. What Equipment is Needed to Operate a Limo Business?
  • Limousines and town cars
  • Car tracker
  • Booking software
  • Dash Cam
  1. Hire Employees

When it comes to hiring employees for a standard limo and town car services business, you should make plans to hire a competent chief executive officer (you can occupy this position), admin and HR manager, fleet manager, accountant, chauffeurs (drivers), car detailers and customer service officer (call center executives).

  1. Launch the Business Proper

No limo and town car business open its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening party if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the limo business, you will be able to officially inform people in your city that your limo and town car services business is open for business.

a. What Makes a limo business Successful?
  • Choose a good location and the latest limousines and town cars to launch the business
  • Hire only competent, hardworking, and trustworthy staff
  • Be deliberate with your marketing sales approach
  • Encourage the use of word of mouth to promote your limo and town car services business
  • Leverage on all available online and offline platforms to promote your limo and town car services business
b. What Happens During a Typical Day at a Limo Business?
  • The business is open for the day’s work
  • The cars are washed, cleaned, and ready for work
  • Customer requests are attended to
  • Schedule maintenance of the limousines are carried out
  • Marketing/website upkeep
  • Supply ordering
  • Administrative duties
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Limo Business?
  • Business management skills
  • Customer services skills
  • Interpersonal skill
  • Logistics and material handling skills
  • Good driving skills
  • Bargaining skill
  • Work experience in a car rental services industry
  • Experience in managing people
  • Experience in business administration
  • Experience in handling logistics and transportation software.