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How Much Is Location Worth in a Limo Business Sale?

Last updated on August 17, 2012 by Sozo Staff

For an industry that’s always on the go, the transportation business is surprisingly dependent on location. It’s not so much where you store your fleet or situate your management office that matters, but where you establish your market. From the costs of doing business to the concentration of customers and competitors, your general geographic region can make or break the success of your limo business sale.

Competitive Climate

It doesn’t take much to get started in the limousine industry. Unfortunately, low barriers to entry make for some intense competition. Ideally, new business owners will want to locate their company in a market that isn’t already saturated. While urban areas may be able to sustain multiple companies, rural regions may only offer enough customers for one or two businesses. If your target market is already being served by another limo service, choosing a niche – such as party buses or airport transportation – can help set you apart. Of course, the most foolproof way to enter a competitive market is to acquire an existing limo business for sale that includes customer contracts. When you’re ready to put your limo company for sale, buyers will often pay a premium for your established client base.

Community Characteristics

Since vehicles are mobile, it’s not imperative that a limo company be stationed directly next to its targeted customers. However, being located in a community with desired characteristics does boost value. For instance, a limo business situated near major airports, hotels, and corporate venues may be able to corner the market on local business travelers. Companies by high schools and colleges may be able to stay busy shuttling students to and from field trips, sports games, and social events like prom. Companies located in communities with large elderly populations may opt to specialize in charter bus services that transport retired people and church groups on vacation tours and other outings.

Costs and Regulations

Two similarly-sized limo businesses providing identical services in separate locations may have surprisingly different costs. That’s because each state and city has its own taxes, regulations, and economic incentives. If you’re limited to a certain geographic region – for example, perhaps you want to continue operating a limo business near your hometown – you’re at the mercy of local officials. However, business owners willing to make a move may want to consider starting a business or buying a limousine service for sale in a more business-friendly region. Location is just one of many factors that contribute to business value. But in a customer-based industry like the limo business, it’s a particularly important one.

Filed Under: Transportation

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