Yesterday I discussed starting your own rental car business, and I mentioned that for it to be sustainable and cover your living costs and make a profit you need at least five general cars or one expensive exotic car. This means that you need quite a bit of capital, but there is an option in-between that you can start with the equivalent cost of two general cars: a limousine service.
In a limousine service business a chauffeur drives a client around from one place to the next. In some overseas markets it is popular with businessmen, but in South Africa it is mainly a special occasion (Matric ball, bachelor parties, wedding etc.) business.
Locally limousine drivers usually charge by the hour, or with packages, in other words if they charge R500 an hour, they will do a three hour package for R1000.
What is nice about limos is that it has space for four to six people so it can be split amongst many people. There is also usually a mini bar space, so people can either bring their own alcohol or you can include it. So while they are being chauffeured around they can drink while listening to music creating a party atmosphere (you can also add coloured lighting – blue is popular). Also have snacks (at least salted peanuts), DVD player, phone chargers etc.
There are quite a few affordable stretch limos in South Africa based on old Mercedes-Benz models such as the 420. You can pick up a limo for less than R100 000, you might even get one for less than R50 000 in won’t be as good condition as the R100k one but you can use it for a budget limo service. You will also require a PDP (professional driving permit) which is required to legally drive passengers around for an income.
Also remember you or the driver should be presentable (a suit at least) at all times and be courteous to your passengers (ask if they OK, open and close doors, ask “can you get more ice” etc.), you not driving a minibus taxi, people are paying a premium for the service. Make sure there is a window that can be closed between you and your passengers for their privacy, some limos have a partition with an intercom for communication.
Marketing the business
As stated above, they is a vehicle most popularly used in South Africa for special occasions. That is what you should target, ads in classifieds under the events section, party planners etc.
This is a business that Entrepreneur magazine noted that “It is not uncommon for operators to earn six-figure incomes”. There is a way for a small business owner to get into this with not too much cost and as mentioned above you do not have to target the high end of the market (there is already many in that space including expensive Hummer limos). You can operate in affordable areas from home. Just make sure you have secure parking, and if you’re not riding hire a reliable and responsible driver with sober habits.