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How Much Does It Cost to Start a Pilot Car Business? (Sales Forecast and Breakeven Analysis Included)

Equipment You Need to Start Pilot Car Business

It will cost you approximately $500,000 to start a pilot car business with a fleet of pilot cars and trucks. However, it is important you know that certain factors can determine the exact cost and that is what we will discuss in this article.

A pilot car business, also known as an escort vehicle service or flag car service, provides support to oversized or overweight vehicles, such as trucks carrying wide loads or construction equipment, during transit.

Pilot cars accompany these vehicles to ensure safe passage by warning other drivers, navigating obstacles, and assisting with traffic control.

Estimated Cost Breakdown for Opening a Pilot Car Business

  1. Vehicle Purchase (e.g., buying 3-4 specially equipped vehicles at $40,000 each): $150,000
  2. High-Visibility Markings and Lights: $20,000 (for all vehicles)
  3. Radios and Communication Equipment: $10,000
  4. GPS Navigation Systems: $5,000
  5. Vehicle Insurance: $30,000 annually
  6. Business Liability Insurance: $25,000 annually
  7. Pilot/Escort Vehicle Operator (P/EVO) Training: $5,000 (for multiple drivers)
  8. Additional Certification Costs: $3,000
  9. Website Development: $15,000
  10. Marketing and Advertising: $30,000 (initial campaign)
  11. Branding (logos, business cards, uniforms): $10,000
  12. Office Lease and Setup: $50,000 (first year’s lease plus furniture and equipment)
  13. Operational Software (scheduling, invoicing): $12,000
  14. Business Registration and Licensing: $3,000
  15. Legal Fees for Contracts and Agreements: $7,000
  16. Miscellaneous and Emergency Fund: $50,000 (to cover unexpected costs or slow business periods)
  17. Initial Salaries (first 3 months): $40,000 (covering drivers and any administrative staff)
  18. Contingency for Overruns: $20,000

This breakdown totals to $500,000 and covers the main categories of expenses you would need to consider when launching your pilot car business. Adjustments can be made based on specific business needs or regional cost variations.

3-Year Sales Forecast and Breakeven Analysis

If your pilot car business charges an average fee of $200 per job and gets about 50 jobs at the start of your business with an annual growth in jobs/contracts of 10%.

With an annual fixed cost of$150,000 (including insurance, office lease, salaries, etc) and a variable cost per job at $40 (including fuel and maintenance); here’s the 3-year sales forecast for a pilot car business:

Year 1:

  • Jobs: 600
  • Revenue: $120,000
  • Total Cost: $174,000

Year 2:

  • Jobs: 660
  • Revenue: $132,000
  • Total Cost: $176,400

Year 3:

  • Jobs: 726
  • Revenue: $145,200
  • Total Cost: $179,040

Total Revenue over 3 Years: $397,200

Total Costs over 3 Years: $1,029,440 (including the initial capital of $500,000)

The cumulative revenue of the pilot car business at the end of three years total $397,200, which does not cover the total costs of $1,029,440. Therefore, under these assumptions, the business does not reach the breakeven point within the first three years.

To approach or reach the breakeven point, the pilot car business should consider increasing the number of jobs it handled more aggressively or raising the service fees if market conditions allow.

You can also explore some creative ways to reduce both fixed and variable costs; which can help in achieving profitability sooner.

Factors That Determine the Cost of Opening a Pilot Car Business

  1. The Number and Types of Pilot Cars You Want to Start the Business With

It is important to note that the brand, type, and size of pilot cars you want to start the business with will also determine how much you will spend.

The cost of some of the best pilot cars varies and the one you settle for will determine how much you will spend. For example, the Ford F-150 costs about $30,635, the Chevrolet Silverado 1500 costs about $32,795, the Ram 1500 costs about $32,595, the Toyota Tundra costs about $35,620, and the GMC Sierra 1500 costs about $35,900.

  1. The Size of Your Parking Facility

By law, before you can get approval to start a pilot car business, you should be able to secure a parking facility for your cars. The cost of leasing a secured facility in a highbrow area will take a significant portion of your budget.

For example, it will cost you between $2,000 to $10,000 per acre per year to lease a secured parking facility in a suburban area, and between $10,000 to $100,000 or more per acre per year to lease a parking facility in an urban or prime commercial area.

  1. The Cost of Registering the Business

You cannot start a pilot car business without first registering the business and obtaining the necessary licenses and permits. As such, you would need to budget for business registration and also pay for the needed licenses and permits.

You should have in place the following licenses and permits; Business License, Commercial Driver’s License (CDL), Pilot Car Operator Certification, Oversize Load Escort Certification, Vehicle Registration,

Vehicle Insurance (Commercial), Special Permit for Oversize Load Escorts, DOT Number (if operating interstate), State-specific Oversize Load Escort Permit, and Local Permits for Operating as a Business.

  1. The Required Insurance Policy Coverage

No wise businessman or woman would want to dabble in a pilot car business without having the necessary insurance policy coverage in place.

This is because more often than not, the pilot cars used in the business might be under a lease agreement, coupled with the fact that the pilot car business is subjected to risks of different proportions.

In essence, if you are planning to start a pilot car business, you should at least have the following insurance policy coverage in place; Commercial Auto Insurance, Liability Insurance,

Passenger Liability Insurance, Workers’ Compensation Insurance, General Liability Insurance, Property Insurance (for your vehicles and premises),

Umbrella Insurance (Excess Liability Insurance), Garage keepers Insurance, Business Interruption Insurance, and Business Owner’s Policy (BOP).

  1. The Cost of Hiring and Training Your Employees

The fact that you cannot operate a pilot car business alone means that you should make provisions in your budget for hiring and training your employees.

You should make plans for competent people to occupy the role of pilot car operators, dispatchers, accountants, fleet managers, mechanics, I.T., administrative support staff, and marketing and sales officers.

  1. The Equipment, Tools, and Supplies Needed to Operate Your Pilot Car Business

As expected, you should plan and budget for GPS navigation systems, communication devices (e.g., two-way radios, smartphones), vehicle maintenance tools and equipment, vehicle tracking software, reservation and dispatch software,

Office computers and software, accounting software, office furniture and supplies, safety equipment (e.g., first aid kits, fire extinguishers), safety and maintenance records software, payment processing systems, vacuum cleaner, first aid kit, fire extinguisher, tire pressure gauge, and roadside emergency kit.

  1. Your Operational Cost, and Contingency

Under your operational cost and contingency, you should be able to budget for fueling your pilot cars, servicing and maintenance, toll fees, parking fees, towing fees,

Emergency vehicle repairs, unforeseen maintenance costs, unplanned vehicle downtime, legal fees (if facing any legal issues), accidents and collision repairs, and medical expenses (if injuries occur) et al.