The limousine business comes with pros and cons. On the one hand, it’s a relatively easy industry to enter. On the other hand, competing with more prominent rivals as a small chauffeur business can be tough. There are many strategies for standing out from the crowd, from focusing on excellent customer service to offering the very latest technology. However, one of the most valuable ways a limo company can differentiate itself in a competitive marketplace is through diversification.
If most or all of your vehicles are stretch limos, you’re serving a fairly narrow market. Depending on the amount of customer demand and number of rivals in your location, this may not be an issue. But by becoming the only local transportation company that offers a party bus service, for instance, it may be possible to attract new customers while getting a leg up on the competition. Often times, business owners who have saturated their current market are able to create room for new growth by adding other services – or even by acquiring a more diversified limo company for sale.
Consumers appreciate being able to have all of their needs met in one place. If a customer has a good experience using your Town Car service for a ride from the airport, he is likely to think of your company when he needs to hire a stretch SUV for his daughter’s senior prom. So long as your transportation services are closely related – or use clear brand identification – it may be possible to enjoy crossover customers.
Reduced Economic Risk
As limo business owners are all too aware, many transportation services are highly dependent upon the business cycle. When the economy dips, consumers cut back on luxury expenses such as events, business travel, and vacations. Branching out into various sectors can insulate against revenue loss during a recession or industry shakeup. For instance, a company that relies on rentals for events such as weddings, parties, and proms may suffer plummeting profits during a downturn, while a business that balances its individual rentals with contracts from corporate clients may be better protected from economic fluctuations.
While diversification has the potential to boost business, it can also do harm. Stretching too far into unfamiliar territory or trying to manage two separate businesses at once can cause owners and management to lose focus. If you haven’t found success offering traditional limo services, it’s probably unrealistic to assume you’ll be successful after purchasing an airport shuttle or corporate limo business for sale. However, if adding services allows you to strengthen an already profitable company through a wider and more flexible market, diversification may pay off. If you do opt to increase services through the purchase of an existing limo service for sale, an experienced limo business broker can provide invaluable help identifying, screening, and engaging the most advantageous acquisition prospects.