A driving school business is a lucrative venture in the United States and the industry remains a multi-million dollar industry presently. The primary requirement for starting a driving school is to have professional driving instructors. So many driving schools in the United States now prefer to subcontract out their driving instruction to trained professionals who supply their own cars, insurance and gas in exchange for a percentage of the revenue paid by their students.
You will have to be very diligent about making sure the insurance coverage for those training vehicles is up-to-date. In all cases, you will monitor the marketing campaigns for effectiveness. Note that to start and manage a driving school effectively, you will also have to be an excellent driver.
The Estimated Profit Potential of a Driving School Business
Driving school businesses charge a fixed price for a full course of instruction. Online driving schools can be very competitive and areas like California charge only $9.95 per student. In-class instruction for a six-week/six-session course averages about $99 to $150 per student. On-the-road instruction is typically a two-week (or fourteen days of teaching) course and costs $50 to $100 per day.
Note that online driving schools are only limited by their online marketing success. The best ones can make thousands in revenue per year; however, the competition is very severe for new entrants in this business. Successful in-class schools and on-road driving school owners can make around $5,000 or more in profit per month.
How Much Does It Cost to Start a Driving School Business?
For a new entrant in the industry, the cost of starting and managing a driving school can be daunting. For an online only business, the major cost will be getting the state certification, the website design and registration, hosting, and marketing the website.
Note that good quality websites are around $1,000. Registration is about $12 per year. Hosting can be free or about $10 per month. Marketing is open-ended and will be based on response rates. A minimum is $100 to $200 per month.
But for the offline classroom part of this business, an owner will have to hire teachers and rent a classroom. These teachers who are certified get about $30 per hour. Classroom space for up to 30 people rents for about $50 per day. If on-road training is part of the Business model, then you will need special vehicles that are equipped with dual controls. This is so your instructors can override the control of the vehicle if the student is making a mistake.
Note that if a new vehicle costs around $50,000, expect the dual control modification to cost about $20,000. You will require signage for the vehicle, and this may cost around $5,000 per vehicle. This is both a warning to other drivers that the vehicle is being operated by a student learner and also an advertisement for your company.
You will need very good insurance coverage that is extremely expensive. Set aside about $5,000 per month for each vehicle that is used for training.
Going down this lane can be a wonderful way to minimize the overall startup and operating cost the business. Presently, revenue split rates range from a low 60 percent for the instructor and 40 percent for the driving school to 75 percent for the instructor and 25 percent for the school.
The growth potential of this business is almost unlimited, yet there is significant competition. Every city in America needs a driving school and most have more than one. It is possible to start in a single location and expand nationwide. Have it in mind that profits in this business come from making many affiliations.
Contracting with local high schools to give their students driver’s education and paying the school a commission is a wonderful way to create new business. Offering programs that are co-promoted with insurance companies is also a good idea.