Limousine Taxi Business Plan

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San Francisco Limo is a limousine firm that provides high quality limousine transportation services for San Francisco and Burlingame. We use late model limousine sedans. John Smith, David Jones and the sole owners of the company have established it as a California corporation. 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. Airport transportation as well weddings, prom nights, and “nights on the town” are quite competitive and margins have eroded. San Francisco Limo is able to serve these niches and reduce downtime while building a loyal base. San Francisco Limo will primarily focus on elderly transportation, private school students transport, and sightseeing trips. These niches have higher margins and are less price sensitive. There are 10 private schools in the area with 3,502 students. There are 26 B&Bs and 44 hotel/motels available for sight-seeing. The area also has 19 retirement and assisted living facilities. These three markets each have a 5% growth rate and potential customers of 1,816; 2,700; and 2,000 respectively. San Francisco Limo will service the Burlingame as well San Jose market, just like it did earlier. While it is common knowledge that there is a large amount of money flowing through the city to a large degree from the boom of the Internet age, Burlingame is also quite affluent. 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 it at a moderate rate. It currently operates three sedans. To save costs, the office operates from home. The vehicles are stored in a garage rented by the company. Because office space is scarce in this area, the home-based model will be used as long as possible without sacrificing custom service.

Currently, the industry average for revenue per vehicle is $4,614 with San Francisco Limo only generating $2,500. San Francisco Limo has to significantly increase this number in order to continue growing and remaining profitable. The low market average revenue is due to a small customer base, and participation in niche markets. As the market becomes more competitive, both the customer base as well as penetration will grow and revenue per vehicle should increase dramatically.

Management Team

The company must fully utilize the knowledge and experience of John and David as their managers to achieve success. John is a veteran of the transportation industry for eight years. John was a limousine driver for the first three-years. For the next five years he was elevated to manager of a 12 car limo fleet. John gained the vast majority of his industry experience and insight over this five-year period. While David is an equally seasoned manager, his background is in logistics for a shipping company. David spent nine years working in Airborne Express’ logistics department. This experience was vital in David&#8217s management skills development and gave David the confidence to launch his own business.

San Francisco Limo will continue to grow at a steady pace, with both principals doing their best and doing just a little of everything. In year one, revenue is expected at $92,000. This will increase to $225,000 by year 3. By year three, net profits will reach $52,000. This represents 22.94% of sales. In the sixth month, profitability will be attained.

1.1 Objectives

This business plan has the objective to increase monthly revenue per vehicle from the current $2,500 to $6.250 by the end 2001. This figure will be 35% more than the national average of $4,614, which is the median for limousines in the Northern California Region.

This will be achieved by:

1. Decreasing the company’s reliance on competitive airport transfer type business.

2. Increased penetration of lucrative markets close to your home base

3. Keep the CATA contract’s highest-profitable part, but find another use for it.

1.2 Mission

San Francisco Limo’s mission is to be the premier hourly hire sedan service in a 10-mile radius from Burlingame. We hope to serve a repeat clientele who demand–and can afford–reliable, secure service from drivers with detailed knowledge of the area.

1.3 Keys for Success

Fleet vehicles must be replaced often to eliminate downtime as well as to maintain an image consistent with the company’s mission statement.

You are key to fostering repeat customers by having excellent telephone skills.

Especially true for limousine companies with small fleets, the most import key to success is finding a repeat clientele willing to hire car and driver for a minimum of two hours. While the airport transfer business is booming and there appears to be enough for everyone, it is important to find segments of the market that complement this business during hours when airport transfers are slow. It will also be beneficial to find market segments that are brand loyal (less price-sensitive) which result in longer fares of a less-hectic nature.

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