How to start a taxi business?Published on 20th December 2018 2018-12-20T12:00:00+00:00
Whether for business, leisure or special occasions, us Brits are constantly on the move, which presents a clear opportunity for enterprising individuals. So if you’re looking for a way to turn a great idea into a cash generator, you may be thinking about starting your own Taxi Business in your local area and reaping the rewards. But just like any business venture, it’s not something you should blindly jump into. It’s a decision that requires astute planning, a workable business model, in-depth research and access to sufficient amounts of money from the start. So, if you are wondering about how to start up a taxi business from scratch, here’s what you need to think about first.
Have you checked your market?
Before you do anything, the first step is to research your market. Is there actually a demand for your services? How far will you be going? How much competition will you be up against? After all, if there are any rival taxi companies trading in your location, you should prepare for some resistance. Yet ultimately, this all boils down having a well thought through business plan and building your unique selling point.
In addition, you also need to think about what types of customer you hope to attract. Are they people who will need to be taken back and forth from the airport? Will they be wanting short trips from the shops? Or are they looking for someone to pick the kids up from school? The more you know about your target audience and their needs, the easier it’ll be for you to specialise and corner the market. Besides, it may also prove useful for marketing your services as well, especially with how Uber has affected the taxi business.
Looking to develop your taxi business and reach new heights? Need access to more vehicles or capital? Apply for an Alternative Finance agreement today and find out more about how your taxi business could benefit.
Have you checked what licenses you need to operate a Taxi Business?
As tempting as it may seem, you can’t pick up customers from the street without having the proper licenses and paperwork in place. Doing so will result in you receiving a fine and possibly having to pay a victim surcharge as well, highlighting the necessity. Nevertheless, there are two type licences which you may need to apply for: a driver’s licence for private hire or taxis and an operator’s licence for private hire or taxis. Plus, in regards to your vehicle(s), you’ll also be required to obtain a vehicle licence for private hire or taxis as well. However, this all depends on which part of the UK your taxi business will be operating from, so double check with your local authority to ensure that you’re fully compliant with all the legal requirements which have been set down before accepting customers.
Can I start a Taxi Business with only one car?
Yes, but it depends on the vehicle in question. If you’re renting or if the vehicle is subject to an existing finance agreement (e.g. a contract purchase agreement), you need to seek prior permission from the owner/finance provider before doing so. However, if you’re wondering how to start a taxi business with one car, know that as long as you’ve got the relevant license and paperwork requirements in place there’s no reason why you can’t operate using a single vehicle such as your own personal car. This is something that might be worth considering since purchasing vehicles often require a large capital outlay and you might not be able to afford it during the early stages of your business.
Can I run a Taxi Business from home?
When developing your idea from scratch, it may make sense to start small and run your taxi company from your home or apartment, minimising the cost outlay. However, although this may add to the appeal, you should seek permission before going ahead. This is especially true if you’re renting or if the property is subject to an existing mortgage agreement. Plus, you’ll need to inform your insurance provider and local authority of your plans, as well as who’ll run it through a consultation period with your neighbours, who may have concerns about aspects such as congestion and parking. As such, though this might work during the early stages, you need to be aware that as your taxi business develops and acquires a larger fleet you’ll likely need to move to a more suitable commercial trading address in the future.
How can I expand the size of my fleet?
As your taxi business grows you may want to consider employing more drivers and expanding the size of your fleet. However, the cost requirement could be more than you can handle alone. But there is a solution. If you want a cost-effective way of acquiring vehicle whilst also having the ability to modernise your fleet in the future, a popular choice for many taxi firms seeking luxury vehicles is Contract Hire, which is the type of Leasing agreement.
Contract Hire essentially means borrowing vehicles across an agreed term which could last up to 5 years, whilst making monthly rental payments to the provider. However, if the vehicles in question are particularly expensive, it’s possible that some providers may offer up to 7 years. Plus, despite not being able to own the vehicle in question, Contract Hire enables you to either return the vehicle(s) in question or upgrade when the agreement matures. However, whilst the agreement is in place you will be held responsible for maintaining the vehicle(s). This means that as well as carrying out repairs and MOT inspections when needed, you’ll also be required to set up a suitable insurance policy as well.
Need help driving your Taxi Business forward?
In concept, if you’re wondering how to set up your own taxi business, it may seem like an easy goal to achieve. But in reality, it’s often a trying endeavour that may require large capital outlay, especially regarding vehicle acquisition and establishing internal processes. Yet if you’re willing to put the hard work in and come up with up an effective business model, you can succeed. Plus, thanks to the Alternative Finance industry, you’ll also gain access to a wide range of business finance solutions as your business develops. All you need to do is source a suitable finance agreement from a lender whom you can trust, which is where we can help.
At Rangewell, we’re an Access to Finance specialist working with over 350 lenders to offer you a comprehensive overview of more than 23,000 business finance products. Our services are free to use for business owners and their advisors and we’ll also guide you through the application process. So if you’re looking for help developing your Taxi Business, apply for an Alternative Finance agreement today or find out more with Rangewell.
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