you need to have a sparkling reputation. Whenever anyone is entrusting you to drive them, a clean reputation is important. But in the case of the personal limo service, typically you will be driving a group of people who are not paying attention to where you are going or how you are driving but are enjoying the ride, which is what a limo is all about—luxury accommodations with perhaps a bar, a television, wifi, and music. The limo offers the opportunity to have a little party en route, party at the destination, and a safe ride home, especially if the customers have consumed alcohol. The driver needs to be supremely trustworthy, and the vehicle needs to be safe and well maintained.
You can operate the limo yourself with a modest limo service. That sounds like a lot of fun, and it may be exactly the way to start out. Your fleet of one limousine will be relatively easy to maintain. And you can provide all the service yourself, from scheduling to driving. If you want to expand, you’ll have to pony up the cash to do so. Just add vehicles and drivers, and keep expanding your marketing to keep business flowing.
That all makes it sound easy, and of course it isn’t exactly quite that simple. But having started slowly with one vehicle and yourself as driver, you get to understand your business and soup to nuts: vehicle care, licenses required, what customers expect—you’ll have personally experienced it all.
A business owner who has done all aspects of his or her business can really provide great insight and management leadership to employees. When an employee has an issue or complaint, you know what they are talking about. And, if you really are a good manager, you can use your hands-on experience to prevent employee complaints before they happen.
Your business plan should reflect how you plan to start your business and how you would expand when you are ready. When you create a pro forma budget, have it reflect the costs of expansion and how you might finance that, especially if you plan to expand by saving as you go along. Use the “Startup Expenses Worksheet” in Chapter 6 on page 69 to create a budget.
Although international trucking, including Canada and Mexico, is an enormous sector of the trucking industry, we will focus here on trucking within the United States. Adding those international markets can be a growth factor for your national business; if you think that is the direction you will want to head and expand into, start doing research now in order to be ready to dive in when the time seems right.
The basic format of the trucking business is to bid on and fulfill contracts. According to the SBA, there are two basic forms of operating, with the key difference being how you get drivers to fulfill those contracts (or accounts if you contract to do all of the trucking for a business). The two forms are:
1. Subcontract drivers. The drivers, in this case, are not employed by your company. They are independent contractors who likely own their own equipment. In this scenario, you are spending your time on two key coordination pieces—getting the contracts and accounts with the manufacturers who need goods transported and then finding drivers who can fulfill those contracts on schedule. The advantage is, of course, lower costs—independent contractors not only usually have their own vehicles that they maintain themselves but they insure them and themselves as well. Insurance is a huge cost factor in the transportation business, so clearly this is a savings. However, you will also be paying them a higher fee than if you were paying your own drivers, which cuts into profits. The real trade here might be in fewer headaches—as long as you feel confident of the drivers you hire.
2. Privately “owned” drivers. In this scenario, you own the trucks and the drivers work for you. You have total control and retain all profit—and you pay all of the expenses of employees and equipment, which means higher startup as well as higher operating costs. While your drivers will be at your service for the accounts and contracts you retain, the pressure is on to have no down time because you are paying for those drivers and those vehicles whether you are using them or not. If coordinating and scheduling is more of your strong suit, you may find that setting up your business using contracted drivers is the best way to go. Or maybe a combination of both—a manageable number of drivers and size of your owned fleet with a stable of contract drivers to call on when you get more contracts than you can handle.
Starting a small moving business is relatively easy—which also means you need to keep in mind that you will likely be competing with a couple of strong college students with a rented box truck. Your ace card will be that you will set up and conduct your business professionally, perhaps offering add-on services such as space for temporary, in-between-moves storage. That kind of added service can give your business more of an impression of stability, especially compared to the local college student setup.
Be sure to promote your integrity and status with emblems of professional associations to which you belong. Try to get your business in the news (in a good way) by volunteering in the community, sponsoring a charitable event or a kids’ sports team with your name on their uniforms. And be sure to have satisfied customers give testimonials that you splash on your website, tweet, or post on your Facebook page.
Startup costs include purchasing one or more trucks in a range of sizes that will accommodate the type of moving you plan to do. And, of course, you will need a place to park them.
You will need at least one employee—you can’t lift that sofa alone! And you will need to train that employee for packing, moving procedures, customer interactions, how to behave appropriately in a client’s home, etc., so that your professional reputation isn’t damaged.
Specializing in a specific kind of unusual transportation—extremely large items such as airplane parts, or modular houses, or refrigerated perishables, blood, or human organs for transplant—can provide a healthy income. You will likely have fewer clients but can charge higher fees for the expertise you have or gain from specializing. Depending on where you are located (for example, a medical transport business in downtown Boston where there are numerous large medical facilities opposed to a small town in southern Indiana) will dictate whether you can do this business yourself or you need employees.
stat fact
If you are starting a trucking business, be sure to understand IRS Form 2290, “Heavy Highway Vehicle Use,” which covers the tax regulations related to heavy use of U.S. roads.
Livestock Transportation
The horse industry is alive and well across the United States, and livestock hauling of cattle is a viable transport service in the Midwest and western parts of the country. Although you don’t need any specific licenses for transporting personal horses for customers unless you get into commercial-size vehicles that hold many animals, you will definitely need equine or bovine experience for potential clients to trust your ability to transport their animals, and you need to familiarize yourself with the livestock transport regulations for crossing state lines.
Although the livestock owner, not you, will be responsible for having their animal ready for transport to its final destination, you will want to know the livestock regulations of any state you will be entering. Most states have at least minimum requirements of certain infectious tests (including a health exam) and/or vaccinations for
