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Limousine Taxi Business Plan Leave a comment
San Francisco Limo is a limousine service serving San Francisco, Burlingame, and San Jose with top quality transportation services using late model limousine sedans. The company has been formed as a California corporation with John Smith and David Jones the sole owners. San Francisco Limo will make $52,000 in net profits by the third year.
The Market
The transportation/limousine in San Francisco is quite competitive. The prices for airport transportation, as well as weddings, prom nights and ‘nights on town’ are very competitive. Margins have been eroded. San Francisco Limo will serve these niches to eliminate downtime of the vehicles as well as building a loyal customer base. San Francisco Limo will be focusing on the private school student transportation, elderly transportation, as well as sightseeing trips. These niches can be profitable but less sensitive to price. There are 10 local private schools that have 3,502 students. There are 25 B&Bs in the area, 44 hotels/motels nearby and 19 retirement and assisted living homes. These markets show a 5% rate of growth, with potential customers in the following three areas: 2,700, 1,816 and 2,000. San Francisco Limo will also serve San Jose and Burlingame, as mentioned previously. It is well-known that the boom in the Internet age has brought a lot of money to the city. However, Burlingame is still quite wealthy. Burlingame surrounds 14 communities. With 3,632 households with incomes exceeding $150,000, this demographic is likely to use limousines.
The Business Model
San Francisco Limo will launch the company at a very modest price. It currently has three sedans. To save costs, the office operates from home. The vehicles are stored in a garage rented by the company. Office space is a premium in this area so the home-based approach will be maintained as long as it is feasible without compromising custom service.
The industry average revenue per vehicle is currently $4,614, with San Francisco Limo generating only $2,500. San Francisco Limo needs to dramatically increase this figure if it is to continue growing and staying profitable. This low average market revenue result is due in part to a small customer base as well as participation in competitive niches. Over time both the customer base and penetration in less competitive markets will increase and the revenue per car should grow dramatically.
Management Team
In order for the company to be successful, the business must fully leverage the experience and insight of their management team of John and David. John is an eight year veteran of the transportation industry. John was a limo driver the first three years. Over the next five decades, he rose to become the manager of a 12-car limousine fleet. John gained the vast majority of his industry experience and insight over this five-year period. David is a seasoned manager but his background is in logistics and shipping. David has been with Airborne Express for nine year in their logistics department. This experience was vital in David’s management skills development and gave David the confidence to launch his own business.
San Francisco Limo will grow slowly with both principals working hard to do a little of everything. Year one revenue is forecasted to reach $92,000, jumping to $225,000 by year three. The net profit will equal 22.94%, or $52,000, in year three. Profitability will be attained by the sixth month.
1.1 Objectives
This business plan aims to increase monthly vehicle revenue from $2,500 to $6.250 by 2001. This number will be 35% higher than the $4,614 national average in the limousine industry in Northern California Region for sedans.
This will be accomplished by:
- Recalibrate the company’s reliance upon airport transfer services that are competitive.
- Increased penetration of lucrative markets close to your home base
- While keeping the most profitable part of the CATA contract, find an even more profitable use for that vehicle.
1.2 Mission
San Francisco Limo’s mission in life is to be the leading hourly sedan hire service within a 10-mile radius around Burlingame. We are committed to serving repeat customers who value and can afford reliable, professional service from drivers with extensive knowledge of the area.
