New self-employed taxi drivers need a business plan. Preparing a plan is well worth doing because it will help you identify whether your idea is viable.
So you’re planning to drive a minicab or a taxi to make a living. We salute you! It’s a well-established job and one where you can be your own boss. Many have succeeded; and many have failed. For the best chance of success you need a business plan.
Ask the hard questions
In preparing to write a business plan the questions you need to ask yourself are:
- What type of cab service am I getting into? Is it a licensed hackney taxi business, or a private hire business?
- How much time can I spend working (and am I going to do this new venture alongside other work)?
- What are my set-up expenses and what other ongoing outgoings do I need to fund?
- Do I have capital (money in the bank) to get the business up and running; or will I need a loan?
A written-down business plan is a very useful guide; see it as a roadmap to help keep you on track as you as you start and grow the business. It’s a very good idea to talk to others who have set up their own businesses to find out what their business plan looks like (they don’t have to be in the taxi trade).
Did you know?
Almost all vehicles used in the taxi trade are bought using finance.
How is your credit rating?
You can do a soft search here to find out whether you will be considered for finance by taxi market lenders.
A formal business plan might be a requirement for a bank or other lender, so it is with doing it properly.
Watch this video on how to write a business plan.
The building blocks of a business plan
In simple language your plan should contain:
- What market you are serving and an overview of your business
- An explanation of how you are going to reach your target market: the sales and marketing tactics you’ll use to drum up trade
- A bit about you (background, qualifications, achievements, suitability) and your team, if you have one
- Detail on the finances. Costs and income.
- All other expected costs such as taxi booking app, vehicle rental, taxi radio costs, SatNav, fuel, licences, your wages, PAYE and National Insurance, potentially commercial business taxes or rates and even VAT if you trade above a certain level, accountants or lawyer fees, offices expenses such as common utilities (energy, telecomms) and interest repayments on any loans.
- Potential takings. These incomes will be a function of the number of fares you will have X the average fare. Research this by talking to people in the taxi trade.
Josh Rhynas, sales director here at The Taxi Shop:
“There is good money to be made for drivers with energy, enthusiasm and determination. We’ve helped many drivers get started over the years. Interestingly, even with the pandemic situation over the last 18 months, we get a lot of enquiries every week from people setting up new fleets, as well as independent drivers.
We an advise on the most suitable vehicles, whether they are cars, MPVs, minibuses or wheelchair accessible vehicles. We can introduce people to trusted lenders if they want finance. Finally, we do have an taxi insurance partner that specialises in the trade.”
This is the third post in a series on starting a taxi or private hire business. The earlier posts are:
For an introduction to the new and used vehicles we supply call 01525 717695 or email us.