6 Initial Steps to Starting A Passenger Transportation Company in 2020
Congrats if you are starting your own passenger transportation company this year. We’re confident that you’ll continue with even more success if it’s particularly an airport taxi or private hire venture that you are planning to consider.
A passenger transport business model that provides niche passenger experience always receives the greatest investment interest from investors and has the most significant growth potential.
As such, a passenger transportation company that offers premium airport transfer or any specialized passenger transportation service is a lucrative startup venture idea.
With that said, starting a new passenger transportation company from scratch is easier said than done to some business enthusiasts. Things, however, become effortless when you follow the steps of successful passenger transportation fleet giants.
Here are the six mandatory steps to starting a passenger transportation company just about anywhere in the world.
Step 1: Choose a Passenger Transportation Niche
Your first step is to identify and tap the niche passenger transportation services offered by companies and sub-contractors. Once you have gained an insight into local competitors, it’s time to develop a mix of the most in-demand passenger services and gain a competitive edge against your competitors.
Step 2: Develop Competitive Advantage for Your Startup
Providing passenger transport service that best meets the passenger’s needs create an immediate, compelling competitive advantage to your startup.
Step 3: Creating the Business Plan
Research the existing companies, perform an in-depth SWOT analysis on your competitors and create a business plan detailing your passengers’ competitive advantages and unique offerings.
Step3: Legal Issues for Starting a Passenger transportation Company
At different stages of starting up a transportation company, an entrepreneur will face several legal issues. Also, the state and local business licensing requirements vary from country to country. But the straightforward legal requirements for starting a private passenger transport company are as follow-
Obtaining Business Permit
A startup passenger transport company should get a business permit depending upon the type of transportation service. If you are planning to start a car rental company, the transport permit will vary by state. Note that you’ll get a good idea of your company’s essential legal requirements, transport permits, and license when sourcing your venture capital.
Licensing Your Intellectual Property
Regardless of the state and country, any small passenger-carrying vehicle carrying a minimum of nine passengers requires the operator’s license and a set of licensing agreements. If you are operating a highly technical passenger fleet or shuttle transport service, then as an entrepreneur, you must take full advantage of technology licensing opportunities.
Registering Your Company Name
Once you have acquired the business license and transport permit, the next step is to register your company’s name. Any sole proprietor can register its name and obtain a tax identification number from the state government’s website.
Step 5: Sourcing Your Startup Capital
One of the biggest difficulties in starting up a new venture is financing and obtaining startup capital. The smart way to minimize financial challenges is to treat all investments in a businesslike manner and look for government funding opportunities.
Here is a list of the top four sources to obtaining capital for starting a passenger transportation company this year 2020.
- Commercial Bank Loans
- Small Business Administration Loan (SBA)
- Lease Financing
- Government Grants & SBIR grant programs
Step 6: Financing Your Startup Passenger Transportation Company
Commercial bank loans are preferred most among startup entrepreneurs, and sales-lease back financing is also a long-term financing option.
Commercial bank lending schemes vary a lot. Without a proper track record, it becomes impossible for entrepreneurs to secure a bank loan for starting a small passenger transportation company.
In this case, the best alternative is to apply for SBA loans.
A vast range of SMB entrepreneurs is eligible for getting the loan approved. Majority of startup transportation companies qualify for SBA loans, and you can apply from www.sba.gov/
In a sales leaseback financing arrangement, an entrepreneur rents vehicles through a small down payment and guarantees paying short installments. Leasing rental vehicles is an excellent way to secure long term financing for your transportation company, and it also cuts down the cost of purchasing new cars.
Taking financial assistance from the government grant program is an excellent way to fund your company’s startup capital.
For example, ‘Returning to School Safely’ is a UK government program with a £100,000 grant for a dedicated school bus transportation company or agency. Governments worldwide are currently unveiling newer stimulus packages for innovative passenger transportation services and supporting the sector post-pandemic.
EndNote: The above six steps fall under initial and mandatory action plans for starting a passenger transportation company. Panning the marketing strategy should be your next top priority to get your startup company off the ground.
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