How do I Start & Operate a Charter Bus Business?

Bus driver, storage, maintenance and repair, insurance and fuel are major expenses

You can start and operate a charter bus business if you can arrange to own or rent the equipment required. The buses you need need drivers, storage, maintenance and repair, fuel and insurance. Starting with used equipment make initial costs, insurance and licenses less costly. Increase your prospects for creating a profitable business by developing a thoroughly-researched business plan, devising a realistic marketing strategy and obtaining sufficient financing.

Things You'll Need

• Buses
• Equipment facility
• Business plan
• Marketing plan
• Financing

Instructions

1. Develop a business plan based on research about your potential initial costs, likely market and probable competitors. Deciding which market segments to focus on helps you determine what equipment you need. Driving a group of 15 young adults three hours to a ski area, waiting overnight and driving them back differs from driving 40 seniors one hour every week from a community center for a four-hour shopping mall visit.

   Your plan should include the purchase of vehicles and rehabilitation for them if they are not new. Determine the safety rules and equipment that apply. You need a place to park the vehicles when not in use and a place to repair and maintain them. Determine if the climate permits them to remain outdoors or requires an enclosed facility.

   Learn what licenses and insurance requirements you must have and if these differ in places you drive your passengers. Learn the licensing requirements for your drivers and the sources for hiring them. Decide if you want to hire repair and maintenance personnel or outsource these activities. Determine the probable costs for each alternative. You may need legal assistance to develop contracts and accounting help for billing and expenditures.

2. Your marketing plan must account for your competitors. Decide if you will look for business tjat differs from theirs or will compete directly by providing better or less-expensive service.

   Explore with potential customers, such as local sports teams, churches, travel agents and event planners what types and amounts of services they might contract for. Examine the possibility of working with long-haul carriers to carry their passengers from designated pick-up points to their final destinations or getting business as an affiliate of a large national company. Ask theme parks, historical sites and museums to arrange trips to bring groups to their sites. Seek out hotels and casinos that will offer reduced rate package deals for groups you transport to them.

3. Decide where to get the funding you need to get started and operate until your charter bus business begins to make a profit. You may decide to seek investors or try to obtain a bank loan. Used buses are expensive. Your financial plan must budget for loan repayments, interest, fuel, repairs and maintenance, equipment replacement, employee salaries and benefits and payroll taxes.

   You should develop a cash flow analysis that alerts you to the amount and timing of money you need even if you raise the funds from your personal resources.

References

• SCORE: Developing a business plan

Resources

• Small Business Administration: Manage your business