The average person may be lucky enough to ride in a limousine once or twice a year. So, you can’t expect customers to know how expensive it is to run a limousine rental company. But before delving into details, it’s safe to say that at least one major challenge has already been revealed. Think about it: If you had just one chance to impress your target demographic, it’s safe to say you wouldn’t want to screw it up. And this doesn’t just refer to the ride itself. You must provide what is known as a quality “customer experience,” which begins the moment potential customers search the Internet for limousine companies in their area. As you can see, limousine companies must go above and beyond to stand out from the competition and ensure their customers don’t even think about going with another company when they plan their next winery day.
But like many other businesses, it’s difficult to invest in growth when the standard costs of sustaining your company are only increasing. Doing this would be nearly impossible were it not for business lenders like United Capital Source, which offer numerous small business loans for limousine companies tailored for making sure they can always serve their customers all throughout the year.
Owning Your Target Demographic
One of the biggest expenses for limousine companies is insurance premiums. Luckily, there are a number of things you can do to make these costs go down. It works the same way as car insurance in that premiums are cheaper if you cover less distance. Longer rides make you more likely to get into an accident. This is why it’s common for limousine companies to specialize in local trips and tourism-related activities in a certain area. Examples include pub/winery crawls, shopping tours, or shuttle services to/from airports and hotels. But since multiple companies are after these customers, the winners are usually those that offer the most attractive discounts and promotions. And those that appear on the results pages of relevant Google searches.
Outsourcing a digital marketing company or hiring an in-house specialist wouldn’t be so hard if regular expenses weren’t high enough already. Besides, research has shown that the most effective marketing initiatives are launched several months before an industry’s busy season. Business is typically slow around this time, with a decent chunk of operational funding tied up in repairs or refurbishments. United Capital Source, however, offers innovative working capital loans that do not carry the fixed, monthly payments of traditional business loans. Credit card factoring is highly appropriate for limousine companies because most customers do not pay with cash.
Contrary to popular belief, credit card factoring is not just available for businesses that perform myriad credit and/or debit transactions each day. The amount is based on the amount of revenue you are expected to generate from such sales, which should be relatively clear for limousine companies since rides are booked weeks in advance.
Your Fleet Will Only Get Bigger
Limousine companies must continuously buy more cars to do more business and keep up with improvements in automotive capabilities. Just when you think you’ve seen the sleekest limousine on the planet, an even flashier model rolls by the following weekend. So, as you can imagine, limousine fleets can get pretty big. The same goes for maintenance costs, and when you’ve got such a massive fleet to maintain, the chances of multiple limousines requiring maintenance goes up. Especially when most of your vehicles are of the same age and model. This is money that should be spent on upgrades, like installation of up-to-date GPS technology or musical sound systems.
When multiple costs pile up at the same time, limousine operators may have trouble determining which expenses should be taken care of first, or which will do the most damage to profits and cash flow if they are put off. The business funding experts at United Capital Source have years of experience with these situations and are happy to help with such decisions. And since tight cash flow isn’t a strict requirement of business loans against credit card sales, we can grant approval at almost any point in your financial cycle. We may also be able to supply a working capital loan that supplements customer deposits, allowing you to purchase new cars and cover repairs without endangering cash flow over the coming months.
More Ways To Lower Premiums
Shorter trips are far from the only effective strategy for lowering insurance premiums. Competitive limousine companies are enlisting their drivers in additional training courses, or applying for memberships to ownership clubs, which have been known to offer discounts of approximately 15%. Another strategy that is surprisingly under-utilized is pre-payments. The discounts are well-worth the investment, not to mention the more cash you will have on hand due to the decrease in monthly bills. We offer this option partially because of the benefits reaped by our clients who take out business loans to pay vendors and suppliers for bulk purchases well ahead of due dates.
One Repair Or Refurbishment At A Time
It’s understandable for limousine companies to be hesitant about debt financing because their expenses are so frequent. Between carpeting, seating, and bar equipment, there’s always something that needs to be replaced. Well, at United Capital Source, we are prepared to gradually take on every expense necessary for staying relevant. As long as you can pay off your first business loan without trouble and prove consistent sales, we will most likely be happy to approve a second round of funding immediately after that new expense pops up. Your limousine company will not only have the most updated vehicles, but also the smoothest cash flow in your competitive pool.