How to Become a Limo Broker

by Eric Petty; Updated September 26, 2017
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You can start as a limousine broker on a modest budget working from home. Your business will provide a valuable service to customers by matching them with limo providers that meet their needs for time, place and budget. Many larger limo company owners started as brokers and later invested in vehicles after developing a customer base and establishing a business credit history.

Legal

Step 1

Form a corporation or limited liability company. This will protect you as an individual from legal and financial liability if a customer is injured and sues both the limo provider and the broker.

Step 2

Apply online with the IRS for an employer identification number. You may not hire employees, but you will need an EIN to open a bank account and to file corporate income tax returns.

Step 3

Obtain a business license from your county or city, if it requires this for a home-based business.

Step 4

Draft two contracts with the help of an attorney, one for your agency agreement with limo providers and the other for customer reservations. Both should limit your liability.

Financial

Step 1

Open a business checking account in your company name. Your bank may require documentation, such as articles of Iicorporation and the IRS letter assigning an EIN number.

Step 2

Set up a credit card merchant account through either your bank or a third-party processor. Acquire a credit card terminal or software that permits card processing through your personal computer.

Step 3

Purchase a business liability insurance policy with coverage of at least $1 million. You won’t need commercial automobile insurance, but you’ll need liability insurance in case you’re sued.

Marketing

Step 1

Call limousine providers in your area, including those with specialties such as airport transport or party buses. Encourage them to form a brokerage relationship with you by stressing the importance of multiple marketing channels. Commission rates are negotiable, but brokers typically earn about 20 percent.

Step 2

Join the limousine association in your area in order to network with owners and develop additional business opportunities. In some places, this will be a joint limo/taxi organization.

Step 3

Order business telephone service, which can be done through a voice-over-Internet-protocol, or VOIP, carrier to economize. Consider getting a toll-free number if you plan to market your services in a large geographic area.

Step 4

Register a Web domain name, sign up for Web hosting and create a professional-appearing website. Use a website designer unless you have strong creative and technical skills. Most customers search for limo services on the Internet, so you don’t want to skimp on this critical marketing tool.

Step 5

Begin experimenting with search engine optimization, or SEO, techniques to drive more customers to your website. Make a small purchase of a paid search service. You can refine this approach and adjust the budget after reviewing initial results.

Step 6

Place advertising in local yellow pages directories, if it fits within your budget. Start with inexpensive ads in multiple directories and monitor the results through customer inquiry. You’ll be able to improve the cost effectiveness of your ad placements the following year.

Tips

  • You don’t want to wait on your 20 percent commission. You’re in a stronger position if you deposit the customer’s funds in your account and forward 80 percent to the provider. Establish a long-term relationship with customers. If they want to book another trip, make sure they call you, not the limo provider. Your services should include alternative vehicle types, such as airport cars, shuttle buses and party buses.

Warnings

  • A minority of states and cities regulate limo brokers, so check to see if yours is among them. For example, New York City requires a $500 broker’s license and a $50,000 surety bond.

References

  • “Wheels of Gold: A Complete How-To Guide for Starting a Million Dollar Limousine Business”; William J. Goerl; 2006
  • Limousines Online: Forum

About the Author

Eric Petty owns a small firm that represents buyers and sellers of businesses. He began writing professionally in 2011. He is a Florida-licensed Certified Public Accountant and Real Estate Broker, and a Certified Merger and Acquisition Adviser. Petty earned his Master of Business Administration in finance from the Wharton School at University of Pennsylvania.

Photo Credits

  • Jupiterimages/Comstock/Getty Images