Start your business
So you want to know how to start a taxi business? Great choice! This entrepreneurial venture is a wise way to become a business owner because up-front costs can be low, while demand is almost always high.
Even so, there are a lot of variables to consider before you’re helping your community of choice get from their starting point to their drop-off point. Luckily, we have the industry know-how to help you get your taxi out of the garage and onto the streets.
As more people move into the suburbs on a daily basis, and young people are taking advantage of lower rent prices to move into major urban markets, demand is increasing for taxi drivers to give people rides in markets all over the country.
If you consider some of the best places to start a business in the U.S. and perform proper competitive analysis in your market of choice, you’ll be able to break into a market with low barriers to entry. You’ve got a solid chance to start earning money quickly with your cab service.
You can start a taxi business by following these steps.
1Create a Business Plan for Your Taxi Business
2
Choose a Business Structure
As with most startups, you’ll want to kick things off by writing a business plan. That’s a standard but vitally important way to clarify your business idea on paper. Address the issues you’ll focus on solving, and the problems that may arise.
This is also an opportunity to identify your target market, understand your customer, and determine which types of insurance and registration you’ll need. Considering all of these items will be extremely helpful as you take action on getting started and manage your time moving forward.
Before you can accelerate, you need to choose a business structure. Typically, this means picking from a limited liability company (LLC) or a sole proprietorship. Sole proprietorships are the most simple method to start a business, and don’t cost anything to establish. Usually, people who opt for sole proprietorships do not have any employees.
While launching a sole proprietorship may be easier, you’ll need to consider business taxes and structuring. Opting for an LLC comes with many more legal and tax advantages. With sole proprietorships, the business is not considered separate from the business owner.
That means the business owner reports profits and losses on their personal tax return, and that if someone sues the firm, they can go after the owner’s personal assets and property. With an LLC you won’t be personally on the hook if someone sues the business, hence the “limited liability.” If you’re starting an Uber taxi business, look at this guide to taxi LLCs vs sole props.
If you still have questions and you’re wondering how to establish an LLC or how much it costs to apply for an LLC, ZenBusiness and its expert support staff are here to help.
As you get your taxi service startup squared away, calculating your small business startup costs is vital to your launch strategy. Consider which vehicle(s) you’d like to purchase. You can find a taxi unit at an average of $15,000 dollars, or you can consider local car dealerships if you’re vying to get a used vehicle. If you buy new, consider using a deferred payment plan in order to avoid paying a substantial amount up front.
Also, consider the cost of accessories you’ll need, vehicle maintenance costs, and potentially the cost of storing your fleet. Insurance and registration costs will vary from state to state, but factor them into your monthly expenses to at least support the bare minimum commercial and vehicle coverage.
The more cars you buy, the higher these costs will be. Keep this in mind as you add more vehicles and hire more full-time or part-time drivers. Also consider the cost of renting an office space if you opt not to work from home.
There are several different ways you could go about funding your business. They include:
In order to make your business official, you’ll need a name. When considering how to name your LLC, make sure the name is completely unique from any other LLC in your state. You can use both Google and your local secretary of state website to make sure no one else is using the name. It also helps to check existing trademarks via the U.S. Patent and Trademark Office.
You’ll want your name to be catchy and eye-grabbing, so get creative! Also, consider working with a graphic designer to craft a sleek logo for your taxi cabs to show off once they’re on the road.
Once you officially form your LLC, you can register for your taxi cab business license under the same name. From there, you will receive your employer identification number, can get the necessary licenses, zoning permits, and decals (which vary by state), and purchase general liability insurance for the company, as well as workers compensation insurance if you’ll be hiring employees. Also, it will finally be time for you to open your business bank account!
Once you select the perfect vehicles for you and your drivers to use, consider the following pieces of equipment for your taxi cab business:
To purchase the above items and consider other accessories your business needs, look into working with a taxi industry vendor.
Before you wow your local market and have returning customers, it’s important to make a name for yourself. Consider using digital marketing to promote your business by setting up social media profiles for your company on Facebook, Instagram, Twitter, and Linkedin and running advertisements.
Join relevant Facebook and LinkedIn groups in your geographic market. Also consider print advertising and business cards to reach as many eyes as possible if it’s within your set budget.
It’s important to also purchase and register a domain name to host a website for your company. Look into implementing a search-engine-optimization (SEO) strategy for your site, too, so people can find you more easily on Google and other search engines. From there, get a Google My Business account so you pop up in searches related to your market. Lastly, make sure you’re in relevant directories across the Internet to build more brand awareness.
See this guide to taxi business marketing from CabStartup for more in-depth marketing advice.
There are so many different business models to consider as you pursue your own taxi company.
There’s also always the option of narrowing the scope of your business idea and choosing a specific niche like these:
Whether you opt to start a traditional local taxi service or create the best pet transportation business on the planet, just know that the potential is there along with low barriers to entry and plenty of opportunities for growth.
| Do-It-Yourself (DIY) | ZenBusiness Pro Plan |
|---|---|
| Starting Price | |
| state fee | $199 + state fee |
| Average Filing Time | |
| 2-3 weeks | 5-8 business days |
| Registered Agent | |
| +$99/yr |
|
| Operating Agreement | |
| +$35 |
|
| State Compliance Help | |
| $119/yr |
|
| EIN | |
| +$70 |
|
| DOMAIN NAME | |
| +$25 |
|
| DOMAIN PRIVACY | |
| +$10 |
|
| BUSINESS WEBSITE | |
| +$100 |
|
| BUSINESS EMAIL ADDRESS | |
| +$25 |
|
| SHOW ALL DETAILS | |
| Do-It-Yourself (DIY) | ZenBusiness Pro Plan |
|---|---|
| Starting Price | |
| state fee | $199 |
| Average Filing Time | |
| 15 business days | 5-10 business days |
| Registered Agent | |
| +$249/yr |
|
| Operating Agreement | |
| +$99 |
|
| State Compliance Help | |
| $280/yr |
|
| EIN | |
| +$60 |
|
| DOMAIN NAME | |
| +$25 |
|
| DOMAIN PRIVACY | |
| +$10 |
|
| BUSINESS WEBSITE | |
| +$100 |
|
| BUSINESS EMAIL ADDRESS | |
| +$25 |
|
| SHOW ALL DETAILS | |
| LegalZoom Standard Package | ZenBusiness Pro Plan |
|---|---|
| Starting Price | |
| $329 | $179 |
| Average Filing Time | |
| 15 business days | 5-10 business days |
| Registered Agent | |
| +$159/yr |
|
| Operating Agreement | |
| +$99 |
|
| State Compliance | |
| $280/yr |
|
| EIN | |
| +$60 |
|
| SHOW ALL DETAILS | |
Generally, for service companies, you need to incorporate your business in the state where you’ll be operating.
If you take the time to study the market you’re entering to make sure the demand is there and that there’s not too much competition, you certainly can make your taxi business profitable.
Utilizing the principles of SEO will be really helpful in launching your business. You could also set up a blog and publish articles related to your business and the market in general.
You can consider government loans, bank loans, credit cards, or asking your friends and family to get the funds needed to launch your taxi service.
Input your search keywords and press Enter.