The question of whether to move out of your home office into a commercial site may best be answered by the person whose desk is wedged in next to yours and is distracting you from an important call as she whispers job details to chauffeurs arriving for work.
About 48 percent of operators in the chauffeured transportation industry say there’s no place like home when it comes to running your business, citing low overhead as the primary reason.
When Is It Time to Set Up Shop?
For Scott Woodruff, president of Majestic Limousine in Des Moines, Iowa, the decision to move into a commercial property came when his fleet reached 10 vehicles and his company’s growth began to be stifled by a lack of space. He’s picking up stakes and moving into a facility this winter.
“We need everyone to be in the same location to have that instantaneous interaction, so we can be more efficient,” Woodruff says. “It will also be a great help to be onsite with our vehicles.”
Efficiency was among the deciding factors for Bob Harris, president of Family Limousine in Haddon Township, N.J., as well.
He moved into a commercial facility last year for better access to nearby Philadelphia and major New Jersey arteries. He was also getting tired of deflecting requests from potential clients wanting to visit his facility.
“Now that we are based on a major road, we also get about 10 walk-in jobs a week, which was an unexpected bonus,” Harris says.
Of course, the increased efficiency you get from having a single location for all employees and vehicles comes at a price.
Woodruff expects costs to rise from the $1,000 he pays each month to warehouse his vehicles to about $3,000 per month for the new facility. Utilities and property taxes could add an additional $300 to $500 to his expenses. To offset costs, Woodruff will rent out storage space at his new property, which he hopes will generate about $1,500 per month.
A Professional Façade
Over the past few years, Woodruff was able to keep his “dirty little secret” from a growing corporate client base by using a special phone system that rolls over from one line to the next if someone doesn’t pick up within two rings. If the second person is on the phone or can’t answer within two rings, it defaults to voice mail.
He’s also been using a centralized reservations and dispatching system from Corporate Car Online that is accessed over the Internet. All jobs are entered into the system and seamlessly moved through to dispatching and then to accounting. Users can log on from remote locations.
Christene Bennett, president of Showcase Limousine in Boise, Idaho, has developed a bag of tricks to make her small business look larger than it is. As a single parent raising two young children, moving her business out of her house is simply not an option.
When potential clients want to see her vehicles in person, she brings them to a friend’s facility nearby.
“I don’t say the facility is mine, but no one has ever asked,” says Bennett, who washes cars, takes reservations, dispatches and sometimes drives. She has three drivers working for her and often gets help washing cars from her 12-year old son, Cody. “Being a single mom, I don’t want people knowing where I live, so I never invite them to my home. It’s not safe.”
Some additional tips from Bennett: Don’t skimp on your phone answering system. She now uses a professional on-hold message system with four lines.
She also recommends that all home-based business owners pay the $30 to $40 for a home occupation permit and maintain workers’ comp insurance if employees are coming into and out of the house on a regular basis.
Perhaps most importantly, she always responds quickly to requests from corporate clients and immediately sends out invoices and confirmations without being asked.
“If you are professional and don’t give them a reason to go elsewhere, the fact that you operate out of your home should not become an issue,” Bennett says. “If you always do what you say you are going to do, a corporate client will probably not leave you. I haven’t lost one in the seven years I’ve been in business.”
Although client retention has not been a problem, Bennett did face a serious obstacle about three years back when complaints from neighbors led to ticketing and got her kicked out of her house. The city gave her a year to find another location.
When she bought her new home, she made sure there was plenty of land to build an oversized garage for her growing fleet. Now she can house four of her nine vehicles indoors and keeps the others in the driveway.
If she adds any more vehicles, she plans to start renting out garage space.
Jerry Verbiar, president of Majestic Limousine in North Shirley, N.Y., agrees that home-based business owners need to protect themselves from “crazies.” To help insulate himself from people who could show up on his doorstep, he maintains a P.O. box as his mailing address.
Verbiar shows his vehicles to potential clients at a catering hall where he’s developed a referral relationship on wedding jobs.
While Verbiar has no intention of moving to a commercial property any time soon, he acknowledges that having a home-based business does present challenges.
“A big downside is you never leave your business,” he says. “You also don’t get the exposure you would get with a store front. To make up for the business, you need to do a lot of direct mail, and make sure you have an 800 number and a professional looking Web site.”