How to Start a Limousine Company

Limousine companies are expected to remain in strong demand despite the fact that there are now a number of ride sharing applications. In fact, it can be expected that at some point one of the major ride sharing applications may have integrated functionality so that limousines and related large vehicles can be called upon on demand. This is actually a good thing for the limousine industry given that it will drastically increase the amount of business that is provided to limousine services. One of the biggest issues that many people have when calling a limousine is that they need to have a substantial amount of marketing in place in order to generate revenues. With the advent of ride sharing applications – limousine and taxi companies – can instantly receive customers for a percentage of the revenues generated. The barriers to entry for new limousine service are considered to be moderately low given that any individual can lease one of these vehicles and hold themselves out as a limo driver once they receive the necessary licenses. Typically, a simple commercial driver’s license is needed in order to provide these services to the general public.

The capital required to start a new limousine service can vary greatly by the number of vehicles that are going to be acquired at the onset of operations. Usually, most limousines have a cost ranging anywhere from $50,000 to $100,000. A typical fleet held by a limousine company typically ranges anywhere from $100,000 all the way to several millions of dollars depending on the number of vehicles are required at the onset of operations and through the course of business. It should be noted that many limousine companies will often turn to leasing companies rather than direct purchase.

The benefits of using a leasing company are that the vehicles can required quickly and with minimal upfront expense. Usually there is some form of capital cost reduction that is associated with a new lease, but this is small as compared to the overall acquisition of a new limousine vehicle. One of the other benefits of leasing is that it creates a much cleaner balance sheet for the limousine company as a seek additional capital to grow. During times of economic recession, this is important given the fact that lease rates do not increase while in some cases interest rates do rise for vehicle loans. It should be noted that it is somewhat uncommon for limousine company to have variable rate auto loans associated with their limousine fleet.

One of the drawbacks to a lease is that it is simply renting on a long-term basis for all intents and purposes. However, in the event that business is not do as well as planned, leases can be returned in some cases. As such, leasing is often considered to be a lower risk way of starting a new limousine company. The benefit of acquiring a limousine and fleet of limousine vehicles with borrowed money is at depreciation charges and interest charges can drastically reduce the overall tax liability associated with the business. At all times, a highly qualified certified public accountant should be hired in order to assist the limousine company with making the appropriate determinations as to which method of financing is typically the best way to go forward. It should also be noted that in the event that an individual is going to be purchasing limousine vehicles, they can expect that they are going to be required to put down 10% to 20% of the total cost of the vehicle as a down payment. The return on investment for most limousine companies is substantial – and ranges in the 20% to 50% range – given the fact that this is a service focused business.

As it relates the corporate structure, most limousine companies are structured as limited liability companies or S-corporations provided that it is a limited number of owners or single owner developing this business. Of course, there are benefits and drawbacks of each different type of corporate structure that could be employed when developing a new limousine company. The best way to go about this is to work closely with a certified public accountant or qualified tax attorney that can assist an entrepreneur in determining which corporate structure is most appropriate. There are also considerations regarding whether or not owned vehicles are going to be kept in a separate corporate entity rather than in the operating business themselves. Again, while this does translate into higher cost – the liabilities associated with a potential accident can be reduced in the event that multiple corporate structures are used when developing this type of business. Only a qualified attorney to determine whether or not several entities should be used for one specific operating business. This type of structure is commonly used with real estate investment firms that placed individual properties into limited liability or corporate holding entities.

A number of licenses are going to be required by the limousine company from both the federal government (for interstate travel) as well as state governments. Some municipalities also require that limousine drivers receive licensure from them in order to provide services to residents and businesses within the area. Many websites on the Internet have a plethora of information specific to what licenses, taxes, and registrations must be provided to municipal, state, and federal entities when working as a professional transportation company. Most local business attorneys will also be able to source this information for you and provide a significant amount of information about what ongoing registrations and filings must be made with the appropriate authorities.

Most limousine companies also require significant number of employees in order to render services. Although most of these businesses start by having the owner-operator drive limousines, increased demand requires that staff drivers are hired. As always, a large-scale employee handbook should be developed by both the entrepreneur in conjunction with the attorney in order to make sure that all employees are aware of the rules and regulations that guide the business on a day-to-day basis. Most importantly, for limousine business, these regulations include when an individual must show up to work, what licenses they must maintain, professional dress, as well as being informed of all other policies that guide the operations of the business. As it relates to cost, most limousine drivers can be hired for about $30,000 to $40,000 per year depending on the location. In major metropolitan areas, and with the popularity of ride sharing applications, some limousine companies have taken the paying substantially more to their limousine drivers in order to retain top talent. One of the ways that employees can easily be retained and motivated to provide great services by offering them not only a plethora of benefits including health insurance but also a profit-sharing program that allows them to earn additional income as a provide a greater degree of services for the company. Most limousine companies also hired dispatcher which typically runs around $27,500 to $40,000 a year. This is important to note especially among the missing companies are going to have a large fleet at the onset of operations. Administrative assistants, part-time bookkeepers, and related personnel are typically hired once a business or generating a significant amount of revenue usually in the hundreds of thousands of dollars.

Marketing is one of most important aspects of for any limousine company given the fact that these businesses must be able to secure ongoing usage of their vehicles in order to turn a profit. Many limousine companies will develop ongoing relationships with wedding planners, event planners, venue companies, and related entities in order to have their clientele use the business on an ongoing basis. Depending on the state, referral fees may be paid to third parties that successfully placed clients with the limousine company. Again and as discussed above, ride sharing applications are also becoming popular ways in which limousine companies can maximize the revenues generated from their fleets. As such, by enrolling the vehicles and drivers in applications like Uber and Lyft, limousine companies can aggressively produce additional income during weekly hours and during times where the use of a limousine is not often found.

In fact, many of these businesses will hang around areas where there are nighttime entertainment venues – like bars and nightclubs – in order to have large parties transported safely to and from their destinations. The ongoing relationship with corporate specialist as well is also an important marketing tool for many limousine companies given that executives and high-profile clients may require specialized transportation. Major corporate events such as golf outings, wine tastings, and large-scale parties typically require this type of transportation arrangement.

The outlook of the limousine industry is going to remain strong moving forward. People love to go out and limousines are not common vehicles that are purchased by individuals and as such the risks regarding ride sharing applications taking a substantial portion of the market are somewhat limited. In fact, these ride sharing applications are going to be a huge boon to many people within limousine industry as a can substantially increase the return on investment associated with the leasing or acquiring these types of vehicles. In was every economic climate, the demand for limousine services remains moderately strong. Even during an economic recession, people are going to have weddings and events that do require large-scale transportation arrangement. As such, these businesses are typically able to remain profitable and cash flow positive at all times.

How to Start an Accounting Firm

People are always going to need assistance with taxes as well as starting expanding new businesses. Many people make the mistake of thinking that an  accountant simply does taxes on an annualized basis, and while that is a significant part of their job, a vast majority of the work that a certified public accountant does is specific for managing tax matters, providing consulting to small and medium-size businesses, and assisting people with obtaining financing for new business opportunities.


It should be noted that many accounting firms do not always have a staff certified public accountant, but rather operate in a more bookkeeping focused capacity. Both of these are considered accounting firms, and what makes the difference for these businesses is whether or not audits can be completed on behalf of a client. Many people enter this field in developing their own accounting firm have usually had substantial experience as an accountant. One of the benefits to owning and operating an accounting firm, especially among people and hold a CPA designation, is at the barriers to entry are moderately high for this type of business. It takes several years of school coupled with substantial work experience in order to become a certified public accountant. As such, these businesses do enjoy a strong degree of barriers to entry once they’re established. One of the other nice things about owning these types of businesses is that they produce highly predictable streams of revenue on a yearly basis not only from tax-preparation return but a host of consulting and financial services that are typically provided by these professionals.


As it relates the type of capital that is used for the development of an accounting firm, many of these individuals typically will use their own funds in order to acquire a small office and begin providing accounting services. However, most banks are happy to provide a working capital line of credit specifically to an individual to hold a CPA designation. One of the ongoing reasons why banks are receptive to this type of business is the high-margin and high predictable revenues that allow accounts to easily satisfy any underlying debt obligation.


In many cases, friends and family may also provide the necessary capital to start up a accounting firm given the low startup cost. Typically, these businesses can be started for as little as $10,000 or as much as $100,000 depending on whether or not the company is going to have a number of staff preparers or staff accountants at the onset of operations. Either way, the capital structure of a new accounting firm is pretty straightforward.


One of the things that is commonly done when starting a new accounting firm is the fact that a full-scale demographic analysis is usually produced in conjunction with a business plan and marketing plan. For any new CPA or general accounting firm, it is imperative that these organizations understand how many people are within the target market, their annual household income, median net worth, and the complexity of the tax returns needed by the market as a whole. In areas where there are a number of businesses, especially small businesses, certified public accountants and accounting firms tend to thrive given the complexity of the paperwork necessary to operate these businesses. This is why it is very important that a demographic analysis, which should also include a competitive analysis,when discussing and planning to start an accounting firm.


As it relates to corporate structure, this can vary state-by-state given that some states require that a CPA operate as a professional corporation rather than as a regular corporation or limited liability company. Of course, this is only a determination that an attorney should make for any individual account or certified public accountant that is going to be starting their own firm. Most attorneys can do to make this determination very quickly and at minimal expense.


All accounting firms also need a number of employees especially as they expand. Although many of these firms start with simply the owner-operator conducting all operations, the there is a quick need to have an assistant, staff tax preparers, staff certified public accountants, and related professionals that can assist the owner on a day-to-day basis. It should be noted that some accounting firms have also taken the hiring certified financial planners and registered investment advisors in order to provide an integrated number of financial services for people that have their tax returns completed by the firm.


As it relates to the expense of these individuals, administrative assistants can range anywhere from $25,000 to $50,000 a year. Staff accountants typically have starting salaries ranging from $65,000 to $85,000 a year depending on the location. An accounting practice in a more rural or suburban setting will typically have lower employee costs versus a major metropolitan area where expenses are very high and higher salaries are required. As with any type of business that is being started, and account should have an attorney develop a large-scale employee handbook that showcases to each employee what their roles responsibilities are and what to do if any type of specific business issue occurs. In many cases, most workmen compensation insurance policies as well as related liability policies pertaining to employment require that the account have a employee handbook and that each employee sign it giving their understanding of the rules and regulations that guide the practice’s operations.


The outlook of this industry is tremendous given the continued complexity as it relates to taxes. There are more than 1 million accountants within the United States, this is primarily due to the fact that most individuals do not know how to properly file tax returns or know what is required of them when they start a new business. This trend is expected to continue especially as more and more people turn entrepreneurship rather than having a standard 9 to 5 job. The expected industry growth will remain in locks that with step with the general economy. It should be noted that one of the ways that many accounting firms are able to expand at a higher than average rate is by operating within a specific niche. There are many accounting firms that focus specifically on financing businesses, healthcare related companies, and related specific industries in order to differentiate themselves from that of other accounting and bookkeeping firms.


Marketing is one of most important aspects when developing a new accounting firm given the fact that most areas do have a certain level of saturation as it relates the number of practitioners. As such, most accounting firms engage in a broad-based marketing strategy that includes these of online as well as print media. At the onset of operations, many accountants – including the lows that hold the CPA designation – will frequently develop ongoing relationships with third-party financial planners as well as attorneys that can provide referrals. One of the key things when developing a professional practice to know is that referrals are worth a huge amount to these businesses given the fact that someone has vouched for the quality of the work offered.


Beyond just thriving off of referrals, many accountants will maintain expansive online presence via a proprietary website. This website should feature information regarding the firm, its staff accountants, hours operation, and may or may not have pricing information as it relates to standard services like tax preparation services. A presence on social media is sometimes warranted for a new accounting firm especially as people do seek referrals from friends and family when they are looking to retain the services of a new account. In some cases, especially for established firms, a marketing firm can be retained to manage all aspects of the marketing and advertising that is required by these businesses. Although this can be somewhat expensive, given the fact that most marketing firms do have a minimum retainer of usually $1000 the $2000 per month in order to provide services. However, in rural markets and in suburban markets these fees may be substantially less given that many marketing firms are looking to expand their client base and may offer substantial discounts at the onset of an engagement contract.


Accounting firms are to continue to be one of those important industries within the United States given the fact that they provide a service that is not typically a be able to rendered by other companies. One of the major threats it is faced by these businesses is the fact that there is a number of accounting software suites that allows individuals to complete the taxes on their own. However, for individuals that generate income besides as a paycheck – these pieces of software do not really provide the same level of professional support that is needed by a licensed professional or small business owner. The complexities regarding tax reporting for small businesses and any other corporation is substantial, and qualified advice from a certified public accountant is always going to be valued and in demand. It is not uncommon for a highly experienced and well marketed accountant to earn incomes ranging anywhere from $200,000 to $400,000 per year once they  have established a strong brand name for their firm.