39 Pros & Cons Of Starting A Limousine Service (2024)

Rewarding work

Starting a limousine service can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.

High customer retention rates

Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.

Gain exposure and experience

This career allows you to gain experience working for multiple different businesses - which will benefit your resume and also keep things interesting for you!

Daily physical activity

Limousine Service's typically involve a much greater degree of movement than other lines of work. Most days, you will spend your day walking, running errands for your business, and performing a multitude of tasks. This can have a positive impact on energy levels and your overall health.

Face to face interaction

If you are the type of individual that thrives on human interaction, then this is the business for you! With a limousine service, you will be hands-on with customers and or employees every day.

Strong Demand & Relatively Recession Proof

The demand for limousine service is increasing year over year and the business is known to be relatively recession proof.

Make money while you sleep

The advantage of starting a limousine service is that you have the ability to have passive income and make money while you sleep. This is the dream for many entrepreneurs.

Motivation of employees

If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.

Security Issues

With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road.

Low margins

The gross margins for your limousine service are typically around 10%, which can make it more challenging to incur new expenses and maintain profitability.

High employee turnover

In the limousine service, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.

Lack of benefits

With a limousine service, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming.

Isolation

Often times, as a limousine service, you typically work alone and do not have much face-to-face interaction with other team members.

Taxes

As a limousine service, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

Stressful work

This line of work can be stressful for both you and your clients. This type of transaction is a significant financial decision for your client, so expectations are very high for you. Although this career path can be very rewarding, it also comes with its challenges and stressful moments.

High overhead expenses

With starting a limousine service, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.

You may need to charge sales tax

If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article

Difficult to build trust with your customer

With starting a limousine service, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.

Strict regulations

With any limousine service, there are strict rules and regulations as it relates to processing your product. You must follow these regulations specifically, or significant legal issues could occur.

Complex development process.

The development process for a limousine service can be quite complex, which may cause delays and challenges when launching and growing your product.

Complex maintenance

Your limousine service will require a long-term investment due to the need for updates, bug fixes, and security vulnerabilities. It's important that you (or someone on your team) stays on top of this at all times.

Impatient customers

You may offer an engaging user experience for your customer, but customers expect a lot and may be impatient if they aren't pleased with your product or service.

Be prepared to get out of your comfort zone!

Although this is exciting for some entrepreneurs, it can be a big challenge for others! You may find yourself in uncomfortable social and business situations, jumping into tasks and responsibilities you aren't familiar with, and pushing yourself as far as you can go!

You might struggle financially (at first)!

If you bootstrap your business or choose not to pay yourself (or pay yourself less than you were making at your corporate job), this can be financially taxing. It's important to adjust your lifestyle and set a plan for yourself so you don't find yourself in a stressful situation.

More of a challenge to run your business from home!

Running your business from the comfort of your own home is a big appeal for many entrepreneurs. With a limousine service, you are more likely to run your business out of your office or storefront space.

Minimal physical activity

A big part of starting a limousine service is sitting at a desk for the majority of the day starting at your computer. Some may enjoy this, but others may struggle with sitting for the majority of your day without much physical activity.

Difficult to scale

With a limousine service, it can be challenging to find ways to scale. Check out this article that discusses scaling your business and the challenges that come with it.

Work is not always glamorous

With starting a limousine service, you may need to get your hands a little dirty. Although it may seem glamorous from the outside to start this business, the work can require a lot of physical activity and repetition.

Learning Curve

When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.

Easy target for criticism

Since your limousine service has the ability to reach a large audience, you'll need to be able to handle criticism. The internet can be a cruel place, and regardless of your intentions, many people will disagree with you and even take their criticism too far. To survive in this industry, you'll need to have tough skin (or at least learn this along the way).

The job can be demanding

This is one of the major disadvantages starting a limousine service. It's important to understand that you may need to make yourself available on a 24/7 basis.

You may need to relocate

There can be a lot of opportunities that come your way when starting a limousine service. Although moving around can be fun and exciting, it can also be physically and emotionally taxing for you and loved ones.

High liability

Running a limousine service involves a lot of liability, which means the cost for insurance premiums may also be high.

Equipment Breakdowns

Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.

Answering Phones

The limousine service is still considered a traditional business, which means answering phones is a big part of the job. If you or your team miss phone calls, you could be missing out on potential revenue opportunities. If you are unable to attend to your phone throughout the day, it would be in your best interest to hire a call center or an employee dedicated to this.

The job can be dangerous

Your limousine service can have its dangerous moments, which puts you and your employees at risk. It's important to consider all liability and put processes and procedures in place that will prepare you and your team.

Takes time to see results & make money

Results and revenue do not come overnight with a limousine service. Often times, it takes weeks, months or even years for your work to monetize.

Technical issues can be frustrating

Technical issues are common in this business. If you struggle with the technical side of things, you may want to consider outsourcing this responsibility to save yourself the time and frustration.

More challenging to earn passive income

It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.