Taxi service business is becoming more and more prosperous and is expanding rapidly in the last couple of years and with up-front costs low and demand that is almost always high – this is an excellent choice for business. In this post, I am going to share with you how to create a business plan for your taxi business step by step.
Nonetheless, have in mind that increase in the taxi business also brings new competitors in the market on a daily basis and that, just like starting any business, requires certain steps and preconditions to be made so let’s see what it means for the cab industry.
Break on Through
If you want to build a flourishing company that would stand the competition, you need to prepare yourself before you break into the market. Creating a taxis business doesn’t necessarily mean that you need to have experience in the field or that having more than enough capital would break you through. Without a business plan and proper research, your interest and energy might be in vain.
Therefore, before starting to build your trade and right after deciding on taking this step, you want to do a quick groundwork – check up on the other taxi associations and what kind of services they provide and how; have prior information relating state laws and general overview of the investment; research customer demand in the area.
After setting the foundation and business strategy, now is the time to formulate it.
His Majesty – the Business Plan
A business plan is a fundamental tool used in order to start up any business project, unrestricted of the size and the nature of it.
It is a standard and very important way to clarify what your business idea is and what you are trying to achieve. It explains what opportunities are on the market, what defines your business speciality and how you will make it prosperous. Writing your idea, “on paper”, will also show if you are prepared and ready to “set sails”.
Have in mind that if your business plan is compelling and conclusive enough, it can also convince investors to give you funding, if that is one of the options you’re going for.
Nothing But the Benefits
Even if you are slightly startled, either by kicking off your first business, or by the complexity of all of it, you shouldn’t be frightened by a business plan.
Generally, a taxi business plan should give you an idea about following questions:
- What are the primary targets and objectives of your taxi community
- What is your targeted community
- What would be the source of funding
- What would be your taxi company structure
- What would be your marketing and financial strategy
- What would be the challenges you may face
Further, it only helps to:
- Check if your idea makes sense
- Plan your sales, marketing and business operations
- Identify problems and how to overcome them
- Set out your objectives
- Work out what financing you need
- Convince other people to back your business
Elementary Keys To Create a Business Plan for Your Taxi Business
Regardless if you’re making a business plan on your own or trying to find professional help to do so, you should be following these key elements every plan consists of.
or the statement of purpose, tells what you want and why. Bear in mind that this section is quite short – no more than half a page in length – but it should touch all the key questions of what, why, how and how much.
This part is all about description – describing the industry, what’s going on now as well as the outlook for the future, who the business’ customers are, how big the market is.
Market Analysis or Analysis of the present situation
defines the market in terms of size, demographics, structure, growth prospects, trends, and sales potential. Mention how often your service will be purchased, how you price it, how you will distribute the service and all the ways you will communicate with your customers to make them aware of you.
This analysis shows what is the present situation of the sector and the market and in what way is our business different from the business of our competition. It also shows if there is sufficient demand for your service in the targeted market. If the market is already sodden, your weaknesses, strengths and opportunities of your business model will need to be changed. It also shows how you fit there or how you will affect it.
Here it is important to identify both direct and indirect competition for your business, now and in the future and to point out strategies that will provide you with a distinct advantage.
Planning objectives show us what are our intentions in the business and what goods or services are we offering and most importantly – what strategy are we going to follow in order to maintain a competitive advantage – specialization, differentiation or competition in costs?
For example, taxi business is not only related to dry land traveling but also air taxi and water taxi. You should select one service based on your location and funds and then exceed it.
As the name says, this element of the plan should include defined resources, marketing policy, employees and personnel management policies. Most importantly, have your specific action plans been defined for achieving the long-term objectives?
For most owners – the crucial one. How are you going to finance it?
Here we will have to analyze the economic impact of the decision making, the profitability and economic usefulness of our future business.
In this section you need to present budget, expected loss, borrows, net value, but you will, mostly, have to do the three financial statements that make the backbone of your business plan – the income statement, balance sheet and cash flow statement.
Again, the financial point is determining if your proposed business idea is going to become a justified success.
Step by Step Business Planning
Overall, now knowing these key elements and segments regarding business plans, you can make yours by following these steps:
- Write down the executive summary – explain the potential customers, location, and services your prospective company would provide. Discuss the location of your main office and route taxis will make. Keep it short and simple, and if you’re looking for a vendor, mention the sum needed for startup or advancement.
- Write down your company’s overview – write about other taxi agencies and about novel and unique ways you will use to attract the public; define how you will respond to the needs and demands of the passengers and community; how is your business going to be operated – will you send vehicles through main office or taxi stands, will you have your own maintenance or send them to repair shop etc.
- Write down objectives – A clearly defined mission and vision, in the first working year, for example.
- Write down the structure – Is your business going to be LLC or a sole proprietorship? While here, mention the central positions in your taxi community and all the roles and their responsibilities.
- Write down the marketing strategy – These days taxi business has been updated to the new standards, so what kind of technological advancement will you provide in the vehicles – wireless internet, GPS and credit/debit card system, etc , that will make you more accessible and appealing to the customers? What channels/ media will be used for marketing your company? Using social media with unique brand name and unique advertisements and fare prices, or sharing business cards, making relations, sponsoring the events?
- Write down legal issues – depending on are you setting your own taxi business from scratch or buying franchise, you can expect legal questions concerning paperwork (vehicle permits, drivers form, commercial driver license) liability, bankruptcy protection, insurance policy etc. Make sure to include all legal aspects which you already found out as a groundwork.
- Write down financial strategy – Finally, planning the budget and investment as your main expense includes registration fee, buying vehicles, technological equipment, licensing, insurance, lease of office or garage, marketing/promotion, while operational costs being salaries/payments, startup inventory, furniture and electronic devices, cost of website and other miscellaneous charges. Make a comprehensive research and write down every single cost, down to car scents.
- Write down the expected growth – what are your expansion plans? Are you spreading to other cities or widening your vehicle park?
You should try to predict sustainability depending on the satisfied customers, the competence of employees, good financial and investment strategy. Your objective here must be increasing cash flow without extra investment and sources.
The point is that you make an operational plan, which you will follow as your business progresses. It can be as long or short as you want it, as long as you are mentioning all the tasks, details and milestones that need to be covered and achieved. Do not make your business plan in a hurry.
It doesn’t have to mean that it will be a triumph, but it will help you avoid some typical causes of business failure.
Have in mind that along with excellent marketing, management, operational and financial plans – it is that your skills, performance, innovation and creativity determine the success and growth in the taxi business.