General Business: My New Idea (need your input)

First off, sorry I havent been on the boards in a long time. I've slowed my online venture enthusiasm and have been looking into a more "concrete" entrepreneurship venture.

So here goes the idea:

Short Version: (long version below)

Looking to possible start up a high end shuttle/taxi/transport company in Vegas. By high end I mean not your Crown Vic / van service. I'm talking about Escalades, Hummers, whatever. To start it would be just me owning 1 transporter and working probably 3 nights a week. The other nights i'd contract in work.

Longer Version:
This all came about when I took my most recent trip to Vegas. Taxis just sit out in front of casinos waiting for ppl who need a ride. They sit for appx 5mins before they take off. Now, i'm not sure if anyone is familiar with how taxi drivers are paid, but they actually have to rent the taxi from the company and are paid as independent contractors. Some get a percent of fares some only keep tips.

If i owned the car and drove the car I'd be making all the money. Hired in contractors would get a cut. So basically this car would never stop moving which means money is always streaming in.

I pick high end because there isnt much out there for nice transportation. The vegas atmosphere invites splurging and going all out. Thus if my service was just a little bit more pricey than a cab, I can see the demand to ride around like a rockstar from club to club to be enough to constitute this.

Also, let me mention that Las Vegas allows extorsion. If you don't believe me, here's and article. But this basically means that I could take payoffs from casinos to strictly start all of my runs from their place. They may even go as far as to contract such a service for when the high rollers come thru.

What do you think? I need any and all opinions, comments, concerns because this is a major move for me, and a decent sized investment if I where to purchase an Escalade (appx $15-20k used for a 2002), and i'd be moving across the country.

Sounds like the business I had thought of a while ago, "Allamota" - anyone remember that? I still would love to do it, it's a fun biz idea for sure.

"Or you could go the wrote of "affordable luxury" - cater to the folks who don't really have "baller" status but who want to go to Vegas and live like they do."

That would be my main focus. There's always someone willing to pay a few extra bucks for the luxury. Although the mid level baller that wants to contract me out for a weekend would be fine too. I've thought of both options and I know the volume would be way higher in the prementioned plan, and it's not like I couldnt incorporate both into one business plan

Escalades, 300C's, Maybe some S430's - just nice rigs that don't make you look like a broke chump. That's what I always envisioned - and they're perfect for the "mid level baller".

I'm thinking that my small fleet would look something like these

300

Escalade

Now probably wouldnt have 24s on both cuz that's pretty dang expensive. But those two cars combined you're only looking at a $30k investment if you shop around. There would have to be a way to distinguish my fleet from just some average guy driving his own car. I was thinking just a simple magnetic logo on the side, that could be taken off if a private contract where in the running.

And I've been messing around with some numbers. Feel free to disagree, I'd like to hear input:

Driving a one car fleet all day (24hrs).

Me 8hrs = all the money goes to me = $300-400 (i think thats a low est considering i'd be keeping my own fares and all tips

Hired out work for remaining 16hrs where I pay 1/3 of what the drivers bring in = $400-525

Daily revenue = $700-925
Low end is $255k/yr, high end $338k.

Obviously assuming this one car can run all day every day for a year. Sure I know it can't but that's why if you add another car to the fleet, you're looking at even more money and more time on the road.
None of this includes overhead (fuel and car payments). None of this includes private contracts or payoffs from club owners.

Maybe I'm not being overly clear but I didnt miss it, i mentioned that NONE of that included overhead/expenses. I was speaking pure revenue not take home income.

I've looked into escalade mpg - its more around 15-18 but I'd guess stop and go would bring it down to around 10-12mpg

I've also looked into the cost of and LLC in Nevada, just over $100

I have yet to figure out how to classify the service. It's NOT a taxi, it's more of a chauffeur service. So far researching the start up of one of those hasn't gotten me very far.

Also, I think there is a lot of room to grow in the taxi / chauffeur industry by finding ways to save money. If you could get the great looking cars that everyone wants to be seen in and find a way to make them more affordable and efficient then you'll have a huge advantage over the other guys because you'll have more money.

A penny saved is a penny earned.

Ideas:

- Converting the Escalade / 300 to bio fuel or hydrogen.
- Take eco friendly or friendler cars and pimp them out with leather, rims and etc...
- Guerrilla Marketing - Finding ways to reduce your dependency on the traditional taxi / chauffeur marketing that requires you to pay high fees / taxes to get biz.

letutor... Darius-Downer is known to a small group of people... that group slowly gets bigger over time ;)

SSM, I guess I'm not exactly clear what you were looking for in a response. If you were just looking for "what do you think about the benefit in the service" I wouldn't have bothered to hit you with all the costs, but if you're going to say potential income... and show how great it can be, you better also be thinking about the costs.

Cheers.

Wow a lot of downers in here for this....

Here's the deal, I bartend and DJ here in crap weather Michigan. I'm making comparable to what I could with my degrees in marketing and management. So there isn't much to really drop here in MI other than friends. Plus my income is based strictly on which shifts my manager decides to give me. I have little to no say in if I make more during the nights I bartend and DJ. With this, it'd be all me.

I am not starting up a taxi service. Taxi's are gross and usually crappy vehicles with weird drivers. It's not a limo company, it'd be a step up from taxi and a step down from a limo.

Marketing won't cost me all that much. I dont want to compare to taxis too much but they don't spend much on marketing. They are simply there when you need them.

As for starting this on a small scale where I am? Psh, Grand Rapids Michigan would not provide nearly enough volume for such service.

Revolving customers - I'd have to say 90% of the customers that take taxis are tourists. I'd have to say that number would be comparable to what I could expect. I would however have a higher probability for the repeat customers from repeat tourists.

Taxes/fees - This i have no idea what they are. I'm pretty sure tho that taxis in Vegas don't have astronomical fees and I doubt a chauffeur service would either.

Costs - I realize there are costs. I know what they are, have an idea as to how much they'd be. And I know the revenue would outweigh the costs.

Obviously this is currently just in the beginning idea stages. I haven't drilled the research yet.

I'm not looking for the $100M idea. I'd settle for about $500k a year, and based on what I make now, it'd be a big raise. Shit, I'd take $75k.

SSM you sound set to go. What do you need our opinion for?

SSM - why not cater to dj's and other event/nightlife industry folks? Vegas is full of visiting dj's (constantly coming and going). You understand the industry and it'd require less by way of marketing.

Think: moving around folks AND their equipment.

OR again, tap into your nightclub industry experience - what about doing the full end-to-end solution - you partner up with a few mid level promoters (just one or two - because a handful of them RUN the vegas club scene): someone pays you $2000. You agree to be their roadie for their stay in Vegas and hook the up with direct entry into clubs and bottle service. You come up with packaged prices and take a cut off the top. Or show services - some guy who's bringing some girl to Vegas to impress her - again, rides to and from the airport and to/from shows (i.e. O at the Bellagio, Ka at MGM, Zumanity at NY NY, whatever's happening at TI - the new "hip" name for Treasure island :sigh:) etc.

Here's a question for you: How well do you know Vegas?

I dunno - there a lot of ways to do this.

letutor - $200k aint bad. Isnt filthy rich, but I could figure out some things to invest into and hopefully get there. As for the questions you posted, thank you...I'll be looking more into those this week. Competition? I don't think so. Closest thing I can think of is Limo's and Taxi's, no in between.

Kmulligan - This is just a brainstorming session really. If I do this, it won't be for about a year.

MsNadi - I dig the dj idea and the nightclub concentration. Originally I was thinking that most ppl taking such service would be headed to the nightclubs anyways. The "arrive in style" type of ppl. I've done VIP at the bellagio's club O a few years back...it would have been sweet not to arrive in a run of the mill taxi. I could see where a nightclub would like their VIP rolling up in something nice. VIP was already $3XX plus mandatory bottle (we chose Grey Goose for $175 x's 2). Got ripped and then took another run of the mill taxi back to our place. The ride was the only non-vip thing about the night.

I know vegas fairly well. Obviously I dont live there, but it won't be hard for me to learn the place. Damn near everything is on one road (clubs and casino-wise), and it wouldn't take long to find out who the big promoters are and what nights are big at which place. I was pitched a "discount card" when i was riding in one taxi two weeks ago out there. I think it was for TI's Tangerine (been there the previous time i was in Vegas). So if promoters are handing out discount cards to hohum taxi drivers I would like to think they'd rather team up with something like my idea and offer a more exclusive service.

Thanks for all the brainstorming this time around. Keep it coming if you got something!

Posted By: Eric

Limo's and taxis are certainly your competition. Don't count them out. Will you not consider them while trying to price your service properly? If so, they ARE competition, and in fact they're your BIGGEST competitors.

Proud Founder of YGG

Well I was thinking more of a direct competitor (like ford vs chevy) and no I dont think there are any out there right now. I've got to research that.

But yes, taxis and limos are substitute competitors, meaning that they do serve a similar purpose...transportation.

Good advice.

Limos and taxis are going to be there but I wouldn't consider them your direct competition. It's like Apple vs Toshiba - sure Toshiba is a competitor but folks who are sold on a PC aren't really going to be worried about what Apple has to offer.

Folks who are taking taxis and are cool with that are really going to be worried about what you're doing - and thats fine, cuz frankly, you're not really all that worried about them.

You're like a nightlife concierge. Some bachelorette party is going to Pure in Caesars on a Friday night. You pick them up from the airport and drop them to the hotel. Then when it's time to be out - you call the club manager/whomever and verify that they are on the list and guaranteed arrival and that they are on their way. If they got bottle service, the club can start preparing that so when they arrive everything is good to go. You pick the ladies up from the Excalibur (HA!) drop them at Caesars - maybe even walk them into the club, straight to the front of the line and in they go. Once dropped you leave a business card and a text message with a number where they can call you when they're ready to leave Caesar's and go back to Excalibur.

You offer a flat fee per night or per weekend (so folks can't rent you out "hey dog, take me from x to x). $200 per night or $500 per weekend (or something) for basic concierge (drive us around and entry into x clubs). Additional fee on top for bottle/VIP service.

Maybe 2-3 different vehicles: 2 SUVs of some sort and a luxury sedan (for couples) - like an S class MBENZ or LS Lexus. Something classy. If folks come with a party that exceeds your capacity - you can partner up with an established limo company - they'll give you a cut for the "finders fee".

Yea I can see it.

Interesting analogy with the Apple/Toshiba

Here's food for thought: I was a "Toshiba" guy for 12 years - switched to a Mac last year. In short - they do and will care.

That pretty much blows what you said to smithereens, doesn't it? :)

To end the debate on the different competitor classes: I'll use food as an example

Direct competition: McDonalds to Burger King
Substitute Comp: Fast Food to Sit Down Plated Place
Budget Comp: Any company that a consumer chooses to spend money on for food.

If we'd like to debate the topic of "competition" we can start a new thread. It's starting to clutter this one up.

So if you did this, how much would it cost for me and 6 buddies to go around Vegas for roughly 6-8 hours and visit all the hottest strip clubs.

I know there's competition, no debate there. However with the marketing definitions i didnt feel there was a exact replica of what I am i thinking.

And also, the 6 buddies, 6hrs...I probably wouldn't charge per head, although shuttles do. Limos and taxis do time based fees. Taxi's are regulated at I think $36/hr there. Obviously Limo's can charge whatever they want. I've priced out a few down there do offer Navigators and Town Cars for hire. Those are about $40-$60/hr. I would guess it'd have to be comparable in price. Anything less than $40 and it wouldnt be worth it, anything more than $60 at start up would make ppl go with a limo.

Still plenty of research ahead of me.

SSM - and remember - with Limos there are typically minimum requests - you can't have a limo for 30 minutes. Some have 2, 4 and 6 hour minimums and have minimum tip requirements.