How to run a chauffeur business

You may think that running a chauffeur business only needs a car and a driving license, but there’s more to it than that. There are a number of things you need to do to create a suffessful, growing business. 

But with a little creativity and forward planning, you can steer a profitable service as a self-employed chauffeur.

This guide discusses how to run a chauffeur business, which includes:

• Planning
• Setup
• Management

Before you set off, it’s crucial to fuel your idea with a solid strategy to tailor your service.

One key factor in how to run a chauffeur business is the type of service you’d like to offer. Deciding your level of service is an important step, as it will determine how you need to prepare.

You could be a chauffeur that specialises in stag and hen dos. Provide customers with a party on wheels, as you take them from one destination to the next.

Alternatively, you could provide a luxury service for business people who want to take trips to the office or airport in style. That could also be a service you regularly offer to celebrities and wealthy individuals.

To legally be a chauffeur, you must apply for a Taxi and Private Hire Vehicle Licence. You can find instructions on the application process through the UK Government portal.

To be eligible, you must have a:

• Full UK or EU driving licence for at least a year.
• Medical examination to prove you’re safe to drive others.

Your local council may also require you to do a specific drivers theory test. They could also carry out a DBS (Disclosure and Barring Service) check. If you have a criminal record, it may mean you’re unable to get the licence.

Chauffeurs must also take out the relevant insurance. There are specialist chauffeur insurance premiums available from companies like Plan Insurance Brokers. 

Standard car insurance may not cover the use of the vehicle as a business, which is why specific insurance may be helpful.

Additionally, public liability insurance could be essential to cover costs of damage to property or client injuries.

Breakdown cover could help you with a problem with your vehicle if you get stuck on the road. Your car is your primary source of income, so fix it as soon as possible.

With a plan in place for how to run a chauffeur business, you need to consider key points to startup.

The type of car you purchase can depend heavily on the niche you’ve chosen. For example, a limo may be suitable for proms and parties. If you have a more discreet, wealthy client, they may prefer a Range Rover.

In addition to the vehicle itself, you might decide to add extra amenities for the journey, like TVs, karaoke machines or minibars. 

Whatever you can provide to create a positive experience, encourages customers to return and sets you apart from competition.

Speaking of experience, you might also want a uniform to ensure you look professional when you arrive. Suits are primarily associated with chauffeurs, especially if you take a client to their wedding.

Buying a car for business purposes is not likely to be cheap, so you might decide to look for external sources of finance. Both require a business plan, whether from an angel investor or a small business loan.

A business plan is a written proposal that lists what your company will do. It can add credibility to your application for funds. Your plan should estimate the money you’ll make over the first month, quarter or year.

Multiply the number of customers you expect by the amount you’ll charge for your service to prepare a sales forecast. An investor will always be taking a stake in your business, so you’ll need to pay a loan back over time with interest.

With your setup ready to go, you need to encourage clients to use your services, and the best way to do that is through marketing.

Your niche likely points to specific groups of people most likely to be customers. For example, people planning hen or stag parties. These can make up your target audience. 

So think about their lifestyles and which marketing channels would most likely reach them. For example, professional business people with busy schedules may still use the social network LinkedIn. 

It’s a platform to recruit or engage with people within industries, so it could be a great channel to advertise your corporate-friendly service.

Once you get going, the day-to-day financial management of your chauffeur business is crucial for your success.

Once you complete a service for a client, you must charge them the appropriate fees and explain what they are.

You can put all the information onto a bill if you send them invoices. You should always keep a copy for your records, which you might need to take legal action against customers who don’t pay.

Countingup is a business account with built-in accounting software, which includes invoicing on the go. You can create, send and save bills easily through the app.

You might decide to offer extras like champagne to your clients, but additional services can  quickly add up. Alongside the costs of insurance and car payments, it’s important to keep tabs on your spending.

Keep track of all expenses, so you know if you need to change your service prices to cover them. If you let those costs get out of hand, your profits will be affected.

Countingup also includes a receipt capture feature. It’s perfect for tracking your fuel costs and any other purchases. Scan the paper bill with your phone’s camera to add it to your accounts.

As a self-employed chauffeur, you are responsible for taking care of your income tax Self Assessments. These will need to get sorted at the end of the tax year to avoid any penalties for late payments.

It can involve a backtrack through all that you spend and earn, a process that can be time-consuming for you and take away focus from other aspects of the business.

Countingup has a tax estimates feature, which will let you know how much to put aside throughout the year. It can keep you ahead on the fast track to sound financial management.

Get started for free.