Taxi Cab Service Business Plan, Marketing Plan, How To Guide, and Funding Directory
The Taxi Cab Service Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Taxi Cab Service business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.
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Taxi services have exploded over the past five years given that companies like Uber and Lyft have enter the market and have allowed people have a much greater access to providing these services to the general public. One of the ways that most cab companies used to have to start their operations was by having to acquire expensive medallion which in large cities could cost upwards of $250,000 all the way to $1 million in places likeNew York City. However, with the advent of the Internet any individual who owns a reasonable car can now operate as a taxicab service. Additionally, many individuals to get into this industry will frequently start with one taxi and then rapidly expand by requiring additional vehicles that can be leased to third-party drivers. This trend is expected to continue in perpetuity as ridesharing services like Uber and Lyft continually increase the number of services they offer to the general public. Generally, a new taxicab service usually has startup costs ranging from $25,000 all the way to $150,000 depending on the jurisdiction, licensing required, and the number of vehicles that will be acquired at the onset of operations. One of the great things about a taxicab services at the gross margins generated from sales is extremely high. Usually, a taxi service operates with gross margins roughly equaling 85% to 90% of revenue depending on whether or not fuel charges are considered part of the cost of goods sold.
Almost all banks and lenders are willing to provide a significant amount of capital to a new taxicab service given that a majority of this financing will be used for the acquisition of vehicles. As with any business, banks and lenders frequently want to see a large amount of tangible assets being purchased so that they can have the appropriate collateral against the loan. Private investors are almost always willing to provide capital as well if the individual does not want to go down the bank loan route.
As with any new business, a taxi service business plan should be developed. This document should include a profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. If an individual entrepreneur is looking to raise capital via a bank loan than it is absolutely necessary that any expansive business ratios and lending ratios page is developed. This will showcase to the potential funding source the fact that the business will be able to support monthly loan payments.
Beyond financial information, the taxi service business plan should also have an extensive market analysis completed. This includes an overview of median household income, population density, population size, and effective market radius. This analysis should be in-depth especially for areas that are more rural given that there is can be a greater lag time between individual fares taken by taxi drivers. One of the things that should also be discussed is the number of competitors within the local market. This includes taking a look at how many individuals are enrolled as Uber drivers or Lyft drivers in any specific area in which the entrepreneur is looking to launch these types of operations.
A taxi service marketing plan should also be developed. This marketing plan can be somewhat limited given that companies like Uber and Lyft frequently do the marketing on behalf of taxi drivers. As it relates to proprietary marketing most taxicab services focus significantly on developing relationships with local corporations that have ongoing personnel transportation needs. Most taxi services maintain expansive pages among portals such as yellow box as well as proprietary websites. It is extremely important that a new taxi service maintain a proprietary website given that most people will search online for local services. This website should also feature mobile applications so that when an individual who needs a taxi is searching on their phone for a service the website can be found quickly.
Many entrepreneurs will also develop a taxi service SWOT analysis. This analysis focuses on the strengths, weaknesses, opportunities, and threats that are faced by these organizations. As it relates the strengths, taxi services are a low risk business that generate extremely high gross margins. The startup cost can be minimal if an individual simply is looking to establish themselves as a single owner operator business. For weaknesses, these companies have a significant amount of competition that they need to deal with on an ongoing basis. For opportunities, many people entering this field can rapidly expand their operations by acquiring additional vehicles and hiring associated drivers. For threats, there is a continuous changing legal landscape as it relates to regulations pertaining to individual taxi drivers. This is especially true given the continually changing landscape of online services that include ridesharing companies that market their services to the general public.