Start a bus tour business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your bus tour business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a bus tour business?
A bus tour business requires at least one tour bus. This can be a traditional bus, party style bus, coach bus, or a double decker bus. You will need commercial auto insurance coverage for the bus. An intercom system including speakers must be installed, so the bus operator can provide details about the tour's highlights to customers. People will not flock to this type of business through word-of-mouth referrals. Marketing is necessary. Employees are necessary though it is possible to run a one-man bus tour business if you are willing to work long hours.
Plan on spending at least $5,000 to $10,000 on a used bus. A new tour bus loaded with luxuries can cost upwards of $100,000 or more. However, most tour buses of moderate size will sell in the rage of $30,000 to $60,000. It is possible to rent a tour bus though the respectable models typically cost around $1,000 per day. It makes more financial sense to buy one or several tour buses. Plan on spending several hundred dollars per month for commercial auto insurance coverage. The installation of an intercom system and speakers will cost between a couple hundred dollars and a couple thousand dollars depending on the style of bus, the quality of system to be installed and the number of desired speakers.
What are the ongoing expenses for a bus tour business?
The bus must be maintained and re-fueled. Budget at least several hundred dollars per week for fuel and maintenance. Bus drivers make between $10 and $25 per hour. Mechanics typically earn $20 to $40 an hour. Marketing and accounting professionals earn an annual salary of $30,000 to $60,000 or more. Budget at least $500 to $1,000 or more for monthly marketing. Commercial auto insurance will likely cost $100 to $200 per bus. Budget $50 to $100 each month for office supplies and utilities.
Who is the target market?
The target market is primarily tourists. These travelers are interested in learning about the local features and history. However, some bus tour companies operate in areas without a steady stream of tourists. Everyone from retirees to students and families will be interested in taking an informative, entertaining and insightful bus tour.
How does a bus tour business make money?
This type of business makes money by selling tour tickets. People will pay a considerable amount of money to enjoy a bus tour that allows them to take in the beauty of an area without having to worry about driving.
How much can you charge customers?
Bus tour tickets cost anywhere from $50 to $500 or more. The exact cost hinges on the area the tour passes through and the demand for tickets.
How much profit can a bus tour business make?
This type of business can rake in the cash if multiple buses are in operation. Another important factor is the location of the business and the tours. If the tour bus business operates in an area that is a hotbed for tourists, the business can make a profit in the six figure range in the first year of operation. Continue to add buses to the fleet and profits can reach the million dollar mark.
How can you make your business more profitable?
You can make more money by selling food, drinks and souvenirs before, during and after the bus tour. Consider charging extra for special seat-selection as well as priority boarding/exiting. If you have several different buses of varying quality, consider charging more for tickets on the buses that are more lavish.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your bus tour business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a bus tour business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
To avoid liability and potential lawsuits, bus tour businesses should have their clients sign waivers.
Businesses are required to register vehicles which will travel across state lines for commercial purposes. Check here for a list of state requirements.
Class B Driver Licensing Requirements
In most states, licences are issued by classes, operating according to the weight of the vehicle being driven. Drivers of standard cars and trucks require a class A commercial driver’s license (CDL), while operators of heavier vehicles, including most tow trucks, require a Class B CDL to operate. More information can be found here.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a bus tour business
Advertise your bus tour business on billboards near hotels, bus stations, common tourist sites, airports and restaurants. Establish relationships with owners and managers of hotels, retirement homes, schools, wedding planning businesses and travel agencies. These professionals will help connect you to customers.
How to keep customers coming back
The best way to attract customers is to market the bus tours in areas where tourists stay and travel. Advertise with billboards, signs, bus wraps, flyers and local papers in or near airports, hotels, restaurants, and other local facilities. It is difficult to retain tour bus customers as most do not return to experience the same tour a second time. Consider offering a different tour with a separate route. If customers enjoy their experience on the main route, they will consider paying for a ticket for bus tours that follow different routes with unique highlights.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Bus Tour Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
If you are looking to give people the opportunity to learn more about a locale while enjoying the company of others, a bus tour business is right for you. This is your chance to bring people closer together. Bus tours also enhance understanding and respect for cities, towns, landmarks and special sites. Bus tour customers gain a new appreciation for the area in which the tour is conducted.
What happens during a typical day at a bus tour business?
Bus tour businesses drive customers from site to site, showing them the area's highlights. People congregate at the bus tour's pickup point, hop on the bus and enjoy a tour. Employees drive tour buses, sell tickets, narrate the tour, market tours, handle complaints, update the company website and maintain the tour buses.
What are some skills and experiences that will help you build a successful bus tour business?
An interest in history, geology, nature, and automotive maintenance will benefit those who are considering the launch of a bus tour business. You might start out as the sole bus tour driver so you should have a firm understanding of the area's history, the most notable landmarks, local geology and other intriguing attractions. Furthermore, a cordial personality will also help as this business requires extensive interaction with the public.
What is the growth potential for a bus tour business?
Bus tours are extremely popular. Those who have an interest in the history of particular towns, cities and regions are willing to pay plenty of money for bus tours. If your bus tours are particularly informative and expose people to sections of towns that other tour companies do not reach, your business will grow. Add to your bus tour fleet and expand the business to additional locales as time progresses. Regional or even nationwide expansion is certainly possible.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a bus tour business?
Most people will perform research on a bus tour business before buying a ticket. So make sure your business has an informative website and a presence on social media. Check state requirements for registering vehicles that travel across state lines to conduct business. Operators of tour buses typically require a Class B CDL license. Certain states mandate an oversize vehicle permit for tour buses. Don't forget to create a “bulletproof” waiver for customers to sign before boarding the bus. Once signed, your business will not be on the hook for harm or damages incurred during the bus tour.
How and when to build a team
You can operate your bus tour on your own if you own a single bus. However, employees must be added as the business expands. Consider adding a driver right away so you can focus on marketing and other responsibilities. An automotive technician will also be required. As time progresses, you will likely pass on the marketing and accounting duties to professionals in these fields.