Start a party bus business by following these 10 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 party bus business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
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 much can you charge customers?
- 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 important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Party Bus Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your party bus business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
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: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
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
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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.
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.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
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.
Is this Business Right For You?
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.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
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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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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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 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.