How to Establish a Transportation Company

Cab companies and limousine rental companies are among the most well known transportation companies. However, transportation can mean moving anything, such as people, things or animals from one place to another. The options are limitless for pursuing this business model.

Plan a business model and service strategy that is different from what is already in the market. Review the operating procedures of other transportation companies out there. Decide whether you will transport people or goods.

Get a chauffeur’s license if you are planning to transport people. Check with your state business regulators for licensing requirements. There could be additional licensing requirements for providing transportation to the general public. An “Entrepreneur Magazine” profile of limousine services says, “If you cannot acquire a limousine plate, you may be able to purchase one if any are for sale, but expect to shell out big bucks, up to $100,000. Limousine plates and licenses are in high demand, mainly because it is not uncommon for operators to earn six-figure incomes.”

Apply for a business license. The Company Corporation advises drivers and independent operators to get incorporated or register as an LLC. The organization says, “If there is a claim against the LLC or corporation, then generally only the assets owned by the LLC or corporation, and not the business owner’s personal assets, will be potentially subject to the claim. In other words, customers may be able to limit their potential liability if there is a claim or lawsuit relating to their business.”

Get funding to buy a fleet of vehicles. Submit your business plan and a loan application to your bank. If denied for the loan, ask the loan officer for a referral to a venture capitalist.

Buy transport vehicles. Contact a wholesale dealer to get a discount for fleet purchases. Get decals for all vehicles. Contact the motor vehicle division and submit your application for decals. In some states, you can get up to 20 decals for each application.

Work out transportation routes, schedules and mileage rates.

Purchase comprehensive auto insurance that covers all the drivers, your vehicles and passengers. Get additional business liability insurance in case the passengers sue you and your driver for an accident during one of your transports.

Hire drivers. Check driving records through the department of motor vehicles. Many DMVs offer this service for a fee of $20 to $50 through their websites. Call references and get an idea of the driver’s personality and whether she would fit in your organization.

Market directly to people who need the type of transportation service you offer. For example, if you are providing transportation services for seniors, print advertisements in publications like AARP. If you are providing transportation services for the jetsetters, advertise in in-flight magazines.

List your business in the telephone book. Contact the publishers of your local business directory publications. Discuss rates. Spend a little extra to get a bigger ad instead of a telephone number and address listing. Make sure your ad is visible among your competitors’.