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 step guide to starting your party bus 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 party bus business?
Owners will need to account for the following initial costs:
- Driver salaries
- Administrative supplies
- Liability insurance
- Office space
What are the ongoing expenses for a party bus business?
Party buses will spend the most money maintaining their buses (tires, oil changes, fuel, etc.) to ensure they’re picture-perfect for each new client. Owners should also account for rental space if they have a physical office, as well as insurance costs and employee salaries.
Who is the target market?
The target market can be anyone planning a major party, though your target demographic will have to have a decent amount of disposable income. This can include anything from high school proms, football games, weddings, bachelor parties, family reunions, etc.
How does a party bus business make money?
Party buses typically charge per hour based on the type of vehicle and the number of people they need to transfer.
How much can you charge customers?
Most party buses will charge over $100 an hour along with a time minimum (e.g., at least four hours.) It’s not unusual for clients to pay more than $200 an hour for the most coveted of buses (e.g., a new Escalade, etc.) Owners should check on their competitor's rates before deciding on a pricing model for themselves.
How much profit can a party bus business make?
It can take some time for party bus businesses to make back their money, especially considering the initial costs of the car and the intense maintenance required for the buses. However, if you spend a total of $50,000 a year for a single vehicle at $200 an hour, you’ll make $50,000 in profit (minus employee salaries, etc.) if you ride for 500 rides hours in a year.
How can you make your business more profitable?
Party buses can consider offering additional related services, such as material transport (e.g., tables, chairs, etc.) for an additional price or taking professional photos while drivers are in idle time. They can even create their own event packages for an additional charge. For example, creating tours for bachelorettes to visit several places in a city.
What will you name your business?
Choosing the right name is very important. 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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your party bus business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
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.
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 party bus 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.
Certificate of Occupancy
A party bus business is generally run out of an office and garage. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a party bus business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your party bus business will be in compliance and able to obtain a CO.
Class C Drivers License Requirements
In most states, in order to drive a commercial passenger vehicle such as a party bus, you will need to earn a Class C Driver's License. More information about the Class C requirements and other driving requirements can be found here.
In order to play music in a business setting, permission must be acquired from the composer or license holder. Typically, it is possible to obtain a “blanket” license allowing a businesses to play music owned by a large catalog of artists and recording studios. Such licenses can be obtained from Performance Rights Organizations, such as ASCAP or BMI.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
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 party bus business
Party buses are best advertised wherever people are planning events, but you can also pass out general flyers to people in the community or use digital advertising to increase word-of-mouth. You can also try to advertise on social media as well. There are plenty of people who create groups dedicated to coordinating major events. An advertisement alongside these pages could be the perfect way to catch someone’s eye.
You should also have a professional website that is clear and easy to follow. Your rates and information should be front-and-center, and you should have several ways (e.g., email, text, phone, etc.) to keep in touch with your customers.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Everyone from the driver to the scheduler needs to be precise about how they collect information and complete each task. However, party buses also need to adhere to the client’s schedule, which means they should have some flexibility when plans change during the event. The more a party bus can adapt without compromising their service, the more likely it is that clients will want to use them again.
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 Party Bus Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
This business is excellent for someone who understands both the large and small aspects of major events. Clients want to be able to relax and feel as though they're taken care of, so they need someone who is confident in making decisions quickly and being able to think on the fly in the face of potential hiccups or even outright emergencies.
What happens during a typical day at a party bus business?
Party bus businesses ideally spend the better part of most days working with clients. From the initial scheduling to actual transportation, the focus should be on the customer. However, owners will also have to account for hiring and managing staff, advertising their business, renewing licenses, and maintaining vehicles.
What are some skills and experiences that will help you build a successful party bus business?
Event coordinators will certainly have a head start because they already have the detail-oriented practice they need to bring multiple components together. They should also have some experience managing employees, devising company strategies and following basic business models.
What is the growth potential for a party bus business?
Party buses are a very convenient feature, and it’s not necessarily seen as a luxury good anymore. Events bring different people together, and a party bus eliminates both the liability and the potential catastrophes that could spoil an otherwise perfect day. Those who offer an attractive service may be able to grow their business faster than they think.
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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.
What are some insider tips for jump starting a party bus business?
Owners will need to look into the specific licensing rules of their state before looking at the types of vehicles that are in demand. They'll need experienced (and charismatic) drivers and buses with modern amenities. They'll also need a comprehensive liability insurance policy. Party buses are out on the road at all hours of the night, often with those who have consumed too much alcohol. Insurance reduces the financial fall-out in the event of a collision or property destruction.
To attract customers, owners should go to where the parties are in their neighborhood (e.g, banquet halls, reception centers, etc.) This is the time to pitch people with ideas, so that you can stand out from the pack. Research your competitors to find out what they're offering, so you can supply clients with new features or at least more convenience. You do not necessarily need a public office space to get started, though it may make your company appear more professional.
Find out what people are looking for when it comes to the party bus they hire. Maybe your bus has the gear people need to keep their phones charged for end-of-night photos. Maybe you hire a videographer to document all the fun being had in the party bus before everyone starts drinking. It could be as simple as guaranteeing your driver’s accuracy with a money-back guarantee.
Finally, make friends and network with the event coordinators and reception hall owners. While it’s true that many formal event centers likely already have contracted workers or businesses that assist their customers, they may be able to recommend other business avenues that you hadn't considered.
How and when to build a team
It’s not impossible for an owner to start with a single bus that they drive themselves, but typically owners will hire qualified drivers immediately. (Depending on the state you operate in, drivers may need a special license to work for a commercial enterprise.) Once the drivers are in place, you can also consider hiring an office manager to keep track of scheduling, payments, and last-minute changes.