How to start a bus company

How much does it cost to start a bus companyIf you are interested in starting your own bus company, you are in the right place. This article will tell you all you need to know on how to get things started.

Starting a bus company gives you plenty of options with a variety of vehicle types and target audiences to choose from. Starting with a minibus and growing to a fleet of vehicles can be the foundation for a successful business.

It is also possible to focus only on coach hire and have one large vehicle. Whatever you choose, it’s a flexible and relatively lean business concept that can accommodate both your professional and personal goals.

We’ve put together a step-by-step guide for those who are interested in starting their own bus company. Here are some essential tips for getting the ball rolling (or the wheels on the bus going round).

Find your niche

It would be easy to think that starting a bus company is all about intercity travel when you first picture it. It is certainly one of the key areas, but bus companies come in a variety of forms.

What are the different types of bus businesses?

  • School services– pick up and drop off children at local schools
  • Luxury vehicles– provide executive coaches for transportation
  • Transport for parties– transportation for guests to and from venues
  • Day trips– excursions with a group
  • Intercity travel– provide services across the country
  • Tourism routes– offer sightseeing opportunities
  • Care home transit– provide transportation between care facilities and other locations

You will ultimately choose between these options based on your strengths. A bus company needs to determine what specific skills it needs.

School bus routes require patience and compassion, for instance. People skills and an upbeat, sociable manner are more likely to be required when providing a transit service to and from parties and venues.

As well as considering these factors, you should also consider the business implications, such as how much longevity each option offers in the area you intend to operate, and how much revenue you will generate.

How to choose the right location

Choosing a prime location for your bus company is crucial if you want to attract a steady flow of customers and grow your business. Consider these ideas.

  • Nationwide services– connect cities across the country
  • City centre travel– focuses on transit in a particular city
  • Events transport– transporting attendees to and from stadiums and conferences
  • Transport hubs– services centred around train or bus stations
  • Rural routes– provide connections between rural areas

A number of factors may influence your decision, including work/life balance – you need to determine how much time you’ll spend away from home; driving ability – navigating winding country roads requires different skills than sitting in city centre traffic jams; and workflow – if you choose to work in events transportation, keep in mind that it is likely to be seasonal.

Learn how to start an airport shuttle service if you want to focus on airport transport.

Your business strategy should now be based on the different types of bus companies and locations you can choose from.

Read more: Sector trends in the coach and bus industry 

Do market research

Study the bus companies that currently operate in your area and/or the niche you are interested in entering. Check their website to see what services they offer and identify any gaps.

If you are looking for bus or coach rental, check local newspapers and notice boards in supermarkets and other places.

Aside from online research, it’s also helpful to speak to the groups you want to reach out to on the phone.

For instance, if you want to start a school bus company, find out when your local school board or education authority puts out tenders for transport contracts. Additionally, be sure to ask about the process. During this stage, collect as much information as you can.

Write a business plan

It’s time to organise your initial research into a coherent and practical business plan once you’ve collected your information.

Writing a business plan is essential not only for staying on track to reach your goals, but it can also help you secure funding if you need it.

Research costs and equipment

In order to start a business, it is important to research the costs and necessary equipment.

Especially if you own a bus company and operate multiple vehicles simultaneously, this is especially important. Maintenance and servicing are all required, not to mention the initial investment.

So what costs and equipment do you have to think about?

  • Vehicles– Consider purchasing or leasing a bus if more appropriate (see below for a breakdown of costs)
  • Maintenance– coach repairs, MOTs, and other essential services will be needed. Fuel costs should also be considered (you may want to consider a fuel card).
  • Insurance– Bus insurance is required for minibuses and coaches (see below).
  • Upgrades– Over time, you’ll probably need newer and better vehicles for your business
  • Design– Depending on your brand, you may need to customise the vehicles and have promotional materials that are creative and professional
  • Sign-writing– Your buses are free on-the-go advertising, so keep them branded with your business’ name and booking/contact information.

How to choose the right type of vehicle

Often, this decision will depend on what type of bus business you want to run and where you want to operate it.

A large capacity coach will be needed for intercity travel, for instance. Sometimes, this will be a clear choice. Here are some options you have.

  • Luxury– Include features such as air conditioning, high-end finishes, leather seats and extra legroom, plus TVs and tables for a high-quality coach service
  • Vintage– You can create an eye-catching and quirky bus company by using classic London red buses or retro coaches
  • Practical– A large capacity coach or minibus with accessible features allows you to focus on the needs of your passengers

How much does a minibus cost?

In order to determine the price of a minibus, a number of factors must be taken into account. Consider the following questions:

Used or new?

In spite of the lower purchase price of a used minibus, it may need some repairs or maintenance in order to be roadworthy.

A new vehicle will, on the other hand, require a greater upfront investment, but will be ready for immediate use.

Buy or lease?

A short-term or long-term lease may be an ideal option for those who are not ready to purchase a vehicle.

In essence, leasing is a monthly rental agreement – you pay a set amount to the company.

Furthermore, you may be able to purchase the vehicle once the lease expires.

Alternatively, you might prefer a minibus, which offers greater flexibility for specifications and allows you to personalise it, for example, with a sign.

You need to consider your finances and how much control you want over design when making this decision.

The cost may also be affected by:

  • Bluetooth capacity– vehicles that need internet connectivity while driving will likely cost more if this feature is present
  • Delivery– Is the vehicle being picked up by you or will it be delivered to you by the seller?
  • Extra features– automatic doors, wheelchair access, luggage racks, and wheelchair ramps are additional features that can affect the price.
  • Mileage– When you’re looking at used vehicles, check the mileage to see how far they have been driven
  • Tachograph– a device used to measure distance, speed, and other activities. Does it come pre-installed or is it required to be installed separately?

Below are approximate prices for minibuses. You can find more information about minibus prices on the minibuses page.

How much does it cost to buy a minibus?

Used: £1,000 – 20,000

New: £20,000 – £30,000

High-end/fully wheelchair accessible: £30,000+

How long can you lease a minibus for?

It is important to keep in mind that leasing prices vary depending on the provider, the length, and the model of the vehicle. Leases generally range from £150 to £500 per month, depending on the type of vehicle.

The coach hire prices you set for your customers can include the costs of your minibus (whether you own it or lease it).

Understand licence and regulation requirements

Understanding the licence and regulation requirements is crucial when starting a bus company in the UK. It is almost always a manual vehicle, so make sure you (or your staff) have the correct license. As well as Scotland, England and Wales have different rules for running bus companies. It is also necessary to follow specific rules if you want to operate a local bus service in London.

Operating buses in central London: what are the requirements?

Congestion charges in central London can be reduced by 100% for vehicles with nine or more seats. Registering for the discount costs £10 per vehicle – find out more here.

As well as finding out if your vehicle is required to have the T-charge, you can also discover if any other emission requirements must be met.

What are the requirements for school buses?

School bus companies have additional requirements that entrepreneurs should consider. To work with children, you must have a DBS background check.

A first aid course could also be beneficial for your staff. For vehicles transporting children, additional insurance requirements may apply. Consider opening a nursery or becoming a childminder if you’re interested in specifically working with children.

How much does a minibus licence cost?

In order to obtain a minibus license, you must complete special driving training. The cost of training and testing for those who are completely new to minibus driving ranges between £700 and £1200 per hour.

What is a D1 licence?

Public Service Vehicle (PSV) licences are required for vehicles that carry nine or more people. Additionally, a D1 licence is required, as mentioned above, because it is a category of driving license and requires an additional driving course. If you are driving a minibus (a vehicle that can seat nine-16 people plus the driver) for hire or reward, you need to obtain additional licenses.

The D1 licensing category also includes Passenger Carrying Vehicle (PCV) licences. If separate fares are charged for the journey, smaller vehicles with fewer passengers will also need PSV licenses.

A PSV licence can be divided into four types:

  • Standard licence – national
  • Standard licence – national and international
  • Restricted licence
  • Special restricted licence

You’ll need to apply for a London Service Permit if you plan on operating your bus or coach company in London. The notice period must be at least three months.

For a Certificate of Professional Competence, drivers of buses or coaches for hire must complete 35 hours of training every five years. It could result in a fine if you don’t have it.

Why is minibus insurance necessary?

You need the right insurance in place because you’ll be providing transportation services for a fee. Vehicles, staff, and passengers can all be protected by insurance.

Having your entire fleet insured under one provider will simplify your organisation and allow you to take advantage of discounts. Providing passengers with liability coverage may result in higher charges.

If you employ drivers, you can learn more about employers’ liability coverage on our relevant business insurance pages.

Read more: Legal issues bus and coach companies face

What is vehicle tracking?

The success of your company depends on ensuring that your drivers follow the correct routes and that the services run according to the schedule, whether you are managing one vehicle or a large fleet. Furthermore, it is essential to make sure your drivers are taking adequate breaks, as driving while tired can have significant consequences.

Tracking vehicles and drivers via GPS technology is what vehicle tracking is all about. The data can be viewed and used to make business decisions, while also keeping safety in mind.

  1. Find customers

Following the creation of a business plan, research on the relevant requirements, and creation of a bus business plan, it’s time to search for customers. It is possible to purchase a coach hire business (and a readymade customer base), but make sure you check the reasons for the sale – you may inherit a disgruntled customer base or gain a glowing network.

You need branding to differentiate your business from your competitors, whether you buy a business or set up your own. To do this, you need to consider the following:

  • Your bus business name
  • Your bus designs

You can reach your target audience in a variety of ways, no matter which route you choose.

  • Create a website– you need a website, whether you build it yourself or hire a web designer
  • Print flyers– place them in local shops and attractions or distribute them
  • Sign write vehicles– use your vehicles to display the name, logo, and details of your business
  • Word of mouth– participate in business events and fairs as well as tell your friends and colleagues about it
  • Social media– reach out to your target audience through the platforms that are most relevant to them
  • Business cards– distribute business cards with contact information to potential customers, partners, and suppliers

Distributing your marketing materials accurately is crucial after you’ve created them. Consider where your prospective customers might be found, such as:

  • Accommodation providers
  • Food and beverage businesses
  • Tourist attractions
  • Transport hubs

Financing your bus company

When it comes to financing your bus company, there are a few key things to keep in mind. You’ll need to have a strong business plan that outlines your goals and objectives. If you are bootstrapping your business you’ll need to identify potential investors and lenders who can provide the capital you need to get your business off the ground.

Finally, you’ll need to put together a solid financial package that includes your personal financial statement, a pro forma income statement, and a detailed business plan. By following these simple tips, you’ll be well on your way to securing the funding you need to start your bus company.

A bus company has many options when it comes to financing its operations. The most common source of funding is passenger fares, but this is not the only option. The company may also choose to apply for government grants, loans, business invoice finance or to secure private investment. In addition, the company may choose to lease its buses or to start a crowdfunding campaign.

Each of these options has its own benefits and drawbacks, and the best approach for a particular bus company will depend on its specific needs and circumstances.

However, no matter what type of finance is used, it is important that the company plan carefully and use its resources in a way that will maximise its chances of success when it comes to how to start a bus company

How to Start a Bus Business

Business Finance specialist at Invoice funding | + posts

Seasoned professional with a strong passion for the world of business finance. With over twenty years of dedicated experience in the field, my journey into the world of business finance began with a relentless curiosity for understanding the intricate workings of financial systems.

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