Are you thinking of starting a new entrepreneurial venture?
Are you seeking for a business with the lowest startup cost possible?
While it’s true that the list of business opportunities does seem never-ending, only a few projects offer sure gains.
One of those businesses is a taxi service.
Best Book to Start a Business: Scale or Fail
A taxi business can start from a few or a single vehicle, which can expand gradually as profit builds. You can even start this business in your home, and then subsequently move out to your own separate office after, you have acquired enough capital. Meaning, you can possibly start a taxi service with just $15,000.
If you’re a beginner in the taxi business field and aspires to create your own taxi service company, you can use these steps as your helpful guide.
Put on your entrepreneur hat, suit up, and prepare for the ride of your life!
Research Your Market and the On-Going Competition
Every day, the number of taxi units gets bigger. You can expect an ongoing competition in this industry, especially if your area is lively and highly populated. No matter what happens, never fret. There are ways to increase your chances of surviving the competition.
First and foremost is by being well-versed, and informed about your market. You can have the best weapons for winning if you study about the competition. Know your enemies; the answers are just at the tip of your fingers. You can research the web, and look at the sites of your local taxi services. Check out their rates and services.
Discover if your area needs another taxi service. If yes, you can be competitive by reducing your rates, offering special services such as airport shuttles, or choose bigger vehicles for group transportation.
Before you jump in with both feet, think long and hard about how you will acquire customers. This is where a smart marketing plan from a proven marketing company can really come in handy. Understanding what you need to do to generate revenue before you have any expenses will give you the best chance at making your business a success. But, if you don’t find success right away, don’t get frustrated, no one gets it right on the first try.
Buy a Vehicle and Other Equipment
For most start-up taxi businesses, buying vehicles can be the largest initial cost.
Typically, the average budget for a taxi unit is $15,000. If you’re planning to begin on this venture with a limited amount of money on hand, clearly buying $15,000 vehicles won’t work. Don’t worry, you can scour the net, or inquire at your local car stores to find used vehicles costing less than $15,000.
However, if you prefer brand new cars, consider buying vehicles that come with deferred payment options. Such systems let you own a brand new vehicle by initially handing down a particular amount of down payment, and then continue paying for monthly fees until you complete the total price. These vehicles come with interest, which makes them pricier than their original cost when paid in full.
Once you’ve obtained your vehicle, don’t forget that you still have some customizations to do.
To make it look like an official cab, you must paint it with your logo.
You must also attach some top lights, install cab meters, provide forms of communication, put decals, and other details to make your taxi look original.
Such equipment may cost you around $700.
Obtain a License and Insurance
Officially begin on your business venture by acquiring a business license.
You can apply for a license at your city clerk’s office. The cost depends on your area, but typically licenses are valued at $800.
You must as well register your vehicle, and ask if there are any required inspections. If you’re planning to drive your taxi, you may apply for a commercial driver’s license at your local department of motor vehicles. Applying for full comprehensive insurance is also recommended, check your local regulatory agency first to make sure you are in line with the law requirements.
Some states or cities imply a specific type and minimum amount of insurance before allowing taxi services to operate. However, if your area doesn’t bear such requirements, you can reach out to an insurance agent to talk about what kind of insurance fits your interest. You may also ask other local cab companies about where to get the best insurance rates.
Build Your Own Office
If you’re starting with a small budget, you can proceed on your own taxi service at the comfort of your home.
This will not be an issue if you’re starting with a few or a single unit. If you have extra cash, you can look for a separate office with a garage. There are existing locations that you can avail for $2,000. Your office must have enough space for taxi storage, and a dispatcher’s office.
There are a lot of business plans you can find online which help you in each stage of starting and managing your business. This business plan helps you as a roadmap for how to structure, run, and grow your new business. You need to also include financial information and high-level growth plans if you plan to ask for financing in the future.
If you are planning on offering your service to the entire city, you may prefer choosing an office that is centrally located.
About the Author:
Elena has always been passionate about helping others get the most out of their life and reach their fullest potential. Elena is the digital marketing manager at Greenr Cabs Malta. When she’s not writing, Elena enjoys traveling to exotic places around the world.
Last Updated: 1 Aug, 2022.