START A LIMOUSINE HIRE BUSINESS

1

 

People nowadays like to spice up their weddings, graduations, political campaigns and even vacations with a limousine ride.

It is a craze that is taking over the middle-class segment of our society which, Kenyan economists predict will keep growing onwards to year 2030.

From an investor’s point of view, limo hire business may look like the ultimate venture to undertake – but is there more than meets the eye? We take a closer look at the hustle and its intricacies.

*Starting Limousine Hire Business*

There are three major things required to run a successful limo hire business. That is (1) A fleet of limos (2) Good management (3) Good staff.

*Fleet of Limos*

You may not be in a position to cough out millions as a beginner, but that should not discourage you as there is a cheaper way of doing things. For instance, you can consider leasing – whereby you link up with an established Auto company and negotiate a deal.

Companies like Mash Auto can offer you some of their limousines with as little as Ksh.10,000 per hour and you can in turn hire them out at Ksh.15,000 per hour. That way you get to reap a decent profit margin without necessarily investing heavily.

If leasing does not sound like a good idea to you, then you can take vehicle fabrication or soup-up route. For instance, you can get a used Toyota VX and get it converted into a limousine. This is done by cutting the vehicle into two pieces and stretching it out to mimic the features of limousines. The whole process will cost you about Ksh.5 Million per limo.

The third and most expensive option is to import a ready-made limousine from abroad: brands like Lincoln, Chrysler and Cadillac are quite popular. A slightly used limo from any of these brands will cost you to the tune of Ksh.15 Million and a new one well over Ksh.20 Million.

*Good Management*

Because of the sensitive & seasonal nature of limousine business, it is important to cultivate customer loyalty. Since not many people can afford to hire limos, you will require to invest in a good reputation so as to get some referrals.

Of course, aside from good management, you will need to invest in good marketing practices. A functioning website, search engine optimization and excellent networking skills will definitely be a bonus.

*Good Staff*

Hire rude ex-matatu drivers and your business will go to the dogs. Look, we don’t have issues with matatu drivers but as much as you want to run a successful business, then you need to invest in good chauffeurs and service staff.

Look for people with training and experience in hospitality. Only hire people with a certificate of good conduct. Remember, limo transport is more than just transport – it’s a luxury and your customers will expect to be treated well.

*How Profitable Is Limousine Hire Business in Kenya?*

On average a single limo can rake in a net profit of Ksh.3.5 Million per year. The business tends to be seasonal with months of April and December providing the best returns. What you need to do is price your services proportionately and indicate the minimum number of hours per hire.

Remember, the price you charge should be based on the extent of luxuries packed within. An Audi Q7 with consumer delights such as a fridge, mini-bar, flatscreens and neon lights can go for as much as Ksh.35,000 per hour while a souped-up Toyota VX attracts as much as Ksh.15,000 per hour.

*To Invest Or Not To Invest?*

Limo hire has its ups and downs. While there is good money to be made, you can only count on a loyal customer base to survive.

Currently, most limo companies operate around Nairobi… it would be a good idea to focus on other upcountry towns like Nakuru, Eldoret and Kisumu as well.

Beyond the boundaries of Kenya, there are many untapped opportunities in Uganda and Rwanda. So – go ahead and invest. But do so with a good strategy!

 

By

Justine Nyachieo
Business Man & Mentor

Timothy Angwenyi
Business Consultant

Post Author

1 thought on “START A LIMOUSINE HIRE BUSINESS

Leave a Reply