A limousine is, of course, not your standard vehicle; typically, it is reserved for special occasions like weddings and proms. Unfortunately, though, even those occasions have been cancelled en masse recently, and COVID-19 is the blatant culprit. So, where does this leave operators of limousine businesses?
The answer is, not exactly in the best place – especially financially. The Williamsburg Yorktown Daily reports several limo firms struggling – including James Limousine, which has abruptly lost 80% of its custom, and VA Executive Sedan and Limousine Service, which would have usually been at its busiest in March and April.
Such scary instances raise the obvious question of how limo companies like these are supposed to financially readjust to the “new normal” while they wait out the pandemic. While there’s no silver bullet for the economically treacherous circumstances, there remain ways for your own limo outfit to rein in costs.
Investigate possible sources of financial support
You might be pleasantly surprised by what support options are available if you look thoroughly for them. In reaction to its sudden drop in business, James Limousine applied for a small business payroll loan. Fortunately, the application was approved, allowing the firm to hire back staff it had previously laid off.
Nonetheless, you should resist any temptation to price gouge. Doing this could simply leave your customers disillusioned and make them turn to a rival company. Basically, try to recover your financial losses from the likes of banks and government rather than by price gouging.
Publicise the anti-COVID benefits of limousines
As a limo business, you could find yourself weathering the current storm more easily than many other transportation hire companies. This is largely due to the unique benefits of choosing to hire limos over other types of vehicles during the pandemic.
“Definitely, it’s gotten us where it hurts,” Abdou Brahim has revealed about the pandemic’s impact on VA Executive Sedan and Limousine Service, the Virginia Beach-headquartered firm he owns. His usual team of 13 drivers fell to just two, who operated only some of the vehicles in his fleet.
However, while clients have recently decided against hiring the usually fairly popular smaller SUVs and sedans in the company’s fleet, it’s been a different matter with the limousines. More clients have opted for these to allow for distance to be created between themselves and other people in the vehicle.
Therefore, you could save yourself money on maintenance costs by jettisoning some of the smaller vehicles in your fleet. After all, you can’t be certain for how long social distancing measures will need to be in place.
Reassess your current limo insurance
If your business has a fleet of limos for private hire, you need specialist cover in the form of limo insurance. Of course, you probably don’t need to be told that, given in the UK, you can be prosecuted for failing to insure your limo, which can be confiscated and even destroyed if you do get caught.
Therefore, insurance is an unavoidable expense in your situation. However, while the typical expense of maintaining limos means that insuring them can represent quite the financial outlay as well, there are still subtle and clever ways of lowering that.
You could, for example, switch to limo insurance covering classic cars if your own limo falls into that bracket, or join a limo owner’s club if there would be insurance discounts in it for you. If your limo is – as is very plausible – currently only used occasionally, you could take up a limited-mileage policy.
Reduce the number of your vehicles on the road
If your limos aren’t in use on the road, you don’t need to pay insurance on them. It’s a pretty simple equation, and means that while you wait for the economy to recover, you could take vehicles out of action and cancel further purchases of vehicles you might have previously been planning.
Still, you should make sure you remove the right vehicles – not necessarily just any vehicles in your fleet. You could learn from the example of the Albany-based Premiere Transportation Group as highlighted by Albany Business Review. Premiere has found buoyant demand for individual rides between airports and major cities.
The reason why? Some customers are understandably averse to taking planes, trains and buses – examples of public transport where crowds could easily lead the virus to spread.
Plan for the post-COVID future
It’s important to remember that some semblance of normality will eventually return – and when it does, you may feel especially thankful for having started bootstrapping now.
Remember that many of the fundamentals of financial success in the limo industry – like, as Luxury Coach & Transportation explains, conducting annual audits and obtaining expert advice – are still applicable right now. Reminding yourself of them could therefore help you to prepare for a prosperous post-COVID future.