Do you want to start a school transportation business? If YES, here’s a complete guide to starting a school transportation business with NO money and no experience.
The need to travel from one point to another is an essential part of our lives and there are loads of entrepreneurs taking advantage of this human need to build a business. The truth is that business is all about solving problems; the more problems you solve for people, the more reward you will get.
If you are looking to start a business in the transportation industry, then one of your best bet is to start a school bus transportation service. School bus transportation services involve transporting school children from their homes to their schools and back.
The fact that there are loads of schools in the United States means that school bus transportation services is needed. This type of business could be capital intensive or moderate depending on the number of school buses you want to put out there and the number of schools you want to work with.
But one thing is certain, the school bus transportation business is indeed a profitable and thriving business if it is well located.
Just like most businesses out there, you cannot ascertain the profitability of a school bus transportation business in your city until you conduct feasibility studies and market survey; with that, you will be able to make informed decision whether to go ahead with the business in your location or not.
If you are not too sure if it is the right decision for you to start a school bus transportation business, then you may want to read through this article; you are sure going to get some facts and figures that will help you make an informed decision.
Steps to Starting a School Transportation Business
1. Understand the Industry
School buses transport students to and from school, as well as between school events, field trips, camps and other educational events.
Companies also provide transportation for school employees to and from work. A close study of the Public Bus Services industry shows that the industry is projected to grow in the coming years. Economic growth has taken away some pressure on state budgets and gave room for moderate revenue growth.
Encouraging factors pointing to industry growth include steadily improving state budgets and a rising number of elementary and secondary school children throughout the United States of America, both of which will increase industry demand.
A major drawback for this industry is the price of crude oil, a key input that owners of school bus transport services must try to input into their contracts.
The Public School Bus Services industry will continue to experience growth in all parts of the world especially in developed countries such as United States of America, Canada, United Kingdom, Germany, Australia, South Korea, Japan and China et al.
Statistics has it that in the United States of America alone, there are about 11,314 licensed and registered Public Bus Services Companies scattered all across the length and breadth of the country and they are responsible for employing about 244,847 employees.
The industry rakes in a whooping sum of $12 billion annually with an annual growth rate projected at 3.1 percent between 2011 and 2016. The organizations with the lion share of the available market in the industry are FirstGroup PLC, National Express Group PLC and Student Transportation Inc.
A report recently published by IBISWorld shows that the Public School Bus Services industry has a medium level of market share concentration. The report also shows that in 2017, the top four companies are expected to account for 36.6 percent of total industry revenue.
Regardless of continued pursuit of acquisitions by larger operators, market concentration has remained relatively the same over the current period, falling just three percentage points.
The report further stated that while the number of industry operators is projected to grow at a tepid annualized 0.4 percent over the five years to 2017, moderate increases in revenue have supported organic growth for large and small operators, thus maintaining a study market share concentration.
Still, major industry operators, including FirstGroup PLC, National Express Group PLC and Student Transportation Inc. have vastly outperformed the industry on average.
Some of the factors that encourage entrepreneurs to start their own school bus transportation services could be that the business is easy to setup and it is indeed a thriving and profitable business venture that an entrepreneur with little business skills and training can comfortably start.
Lastly, starting a school bus transportation services business in the United States requires that you get the necessary permits and licenses to be able to operate in any city of your choice, and you are expected to have a good grasp of the routes and perhaps financing plans for buses.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
People who require the services of a school bus transportation services company are not restricted to school children alone, but it includes staff members of schools in your immediate community or state.
So, if you are looking towards defining the demographics for your school bus transportation services company, then you should make it a bit open to other categories of people. It should include students and staff members of both public and private schools in the United States.
3. Decide What Niche to Concentrate On
Most school bus transportation services companies tend to provide a wide range of services as it relates to school bus services such as bus services for public schools, employees, school busing for private schools and other transportation services.
That is why it seems like there are no niche areas in the industry. But on the other hand, some school bus transportation services companies may decide to major in some key areas such as;
- Providing home-to-school bus transportation for students
- Providing bus transportation for extracurricular activities
- Providing bus transportation for employees
The Level of Competition in the Industry
The level of competition in the school bus transportation services industry depends on the location of the business and the area of your specializations. In some areas, it is intense and in some other area it is mild.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure that your buses are comfortable and safe, your drivers are always on time and you know how to attract and reach out to your target market.
But over and above, there are several school bus transportation services companies scattered all around the United States.
So, if you choose to start your own school bus transportation services company in the United States, you will definitely meet stiffer competitions not only amongst school bus transportation services companies in the United States, but also other forms of transportation such as car hire services, and scheduled and charter bus services companies et al.
Besides, there are larger school bus transportation services companies that determine the trends in the industry and you should be ready to compete with them for clients.
4. Know the Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading school bus transportation services companies in the United States of America and also in the globe;
- FirstGroup PLC
- National Express Group PLC
- Student Transportation Inc.
- American School Bus Company LLC
- American Student Transportation of Mounds View
- Alpha School Bus Company, Inc.
- Grand Prairie Transit-Lockport
- Cook County School Bus, Inc.
- Krapf School Bus
- Kids on the Go USA
- North American Central School Bus
- Illinois Central School Bus
- A Plus School Bus
- 21st Ave Bus Corp. – Total Transportation Corp.
- Birnie Bus Service, Inc.
- Durham School Services
- First Student Inc.
- Mid-Columbia Bus Company
- Johnson School Bus Services Inc.
- McIlwain School Bus Lines, Inc.
When it comes to starting a school bus transportation services company, you just have to get your feasibility studies and market research right before venturing into the business. It is good to mention that the school bus transportation services business comes with its own fair share of challenges.
Starting this kind of business definitely entails that you raise plenty of capital because you will need capital to purchase the first set of standard school buses or at least to finance the purchase of the first set of standard school buses. If you cannot, you may want to consider pulling the resources from family and friends.
Depending on the scale at which you want to start from, you might require as much as multiple thousands of dollars and even millions to strike this off.
You will be expected to hire experts that will help you with a comprehensive economic analysis and the profitability of the business within the location you intend launching it. If you get your economic and cost analysis right before launching the business, you may not have to stay the long before you break even.
5. Decide Whether to Buy a Franchise or Start from Scratch
There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
If you are looking towards starting a school bus transportation services company, you would have to start from the very scratch because you can hardly get the franchise of a school bus transportation services company to buy except you want to partner with an established schedule and charter bus transportation services company.
Besides, starting a school bus transportation services company is less stressful when compared to other related businesses which usually require detailed groundwork before launching the business.
With a school bus transportation services company, you should just try as much as possible to secure a standard office facility in a good business district, purchase your school buses, secure your licenses and permits and then leverage on every marketing tool within your disposal especially the internet and door to door marketing techniques to market your school bus transportation services company.
Please note that most of the big and successful school bus transportation services companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own school bus transportation services company brand to become successful.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own school bus transportation services company today, one of the major challenges you are likely going to face is the presence of well – established school bus transportation services companies and scheduled and also charter bus services companies who are offering same services that you intend offering.
The only way to avoid this challenge is to create your own market (You can start with school children in your immediate community).
Some other threats that you are likely going to face as a school bus transportation services company operating in the United States are unfavorable government policies, the arrival of a competitor within your location of operation and global economic downturn which usually affects purchasing/spending power.
There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a school bus transportation services company, the legal entity you choose will go a long way to determine how big the business can grow; some school bus services companies design their business and services for community market, some for regional/state -wide market, while others for national market.
You have the option of either choosing a general partnership, Limited Liability Company or even a sole proprietorship for your school bus transportation service company. If you are confused on which legal entity to use, you can consult your lawyer.
8. Choose a Catchy Business Name from the ideas Below
Generally, when it comes to choosing a name for a business, it is expected that you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. If you are considering starting your own school bus transportation services company, here are some catchy names that you can choose from;
- Glitters Int’l® School Bus Services, LLC
- Prudence Team® School Bus Services, Inc.
- Bell – Gam® School Bus Services, LLC
- Toddlers World® School Bus Services, Inc.
- Kingdom Kids® School Bus Services, LLC
- Blue Strides™ School Bus Services Group
- Charlie Loop® School Bus Services, LLC
- Alpha Plus™ School Bus Services Ltd.
- Highlanders® School Bus Services, Inc.
- Ingram Glitz® School Bus Services, Inc.
- Red Star™ School Bus Services, Inc.
- Headway® School Bus Services, Inc.
9. Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your school bus transportation services company.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own school bus transportation services company in the United States of America;
- General insurance
- Motor vehicle insurance (comprehensive insurance)
- Health insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own school bus transportation services company, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successful run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
11. Get the Necessary Professional Certification
Aside from safety and affordability of your school bus transportation services company, professional certification is one of the main reasons why some school bus transportation services companies stand out.
If you want to make an impact in the school bus transportation services industry, you should work towards acquiring all the needed certifications in your area of specialization. You are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business.
These are some of the certifications you can work towards achieving if you want to run your own school bus transportation services company;
- Bus Driver Certification (Bus Certification Training – ESC-20)
- IMG Certification (International Motor Group Certification)
- Commercial Driver’s License
Please note that despite the fact that you can operate a school bus transportation services company without professional certifications, you would still need the appropriate license to run this type of business in the United States of America.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized especially a school bus transportation services company. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents you are expected to have in place if you want to legally run your own school bus transportation services company in the United States of America;
- Business and liability insurance
- Commercial Vehicle Operator’s Registration
- Appropriate driver’s licenses for drivers (Commercial driver’s license (CDL)
- Assistant’s licenses for assistants
- Proof of ownership, proper identification and vehicle license
- Tax Payer’s ID
- Fire certificate
- Certificate of Incorporation
- Business License
- Business Plan
- Non-disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Insurance Policy
13. Raise the Needed Startup Capital
Starting a school bus transportation services company is indeed a capital-intensive business hence entrepreneurs willing to start the business ensure that they raise the required startup capital from all available legal means.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your school bus transportation services company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
Before we talk about choice of location for your school bus transportation business, it is vital to say that you may want to consider starting from home if you are looking to start small and then build fast. Choosing a location for a school bus transportation services company can be in two phases.
Firstly, it must be located in a city that has need for such services (a city/community with a good number of schools and residential communities) and also in a city that has good road network. So also, you are expected to secure administrative office in a visible and busy location.
Indeed, location has great influence on the success of a school bus transportation services company. If you have taken your time to study the school bus transportation services industry, you will realize that they are willing to pay expensive rents in order to stay in a metropolitan city and of course a busy business district; a place where business activities and financial activities are at its peak.
It cannot be overemphasized that the location you chose to open your school bus transportation services company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of households and schools with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility for your school bus transportation services company in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients who would want to physically examine your buses before sealing a deal with you.
It is important to note that a business facility in a good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.
If you are new to the dynamics of choosing a location for your company, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your school bus transportation services company.
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technologies or equipment needed to run this type of business except for comfortable school buses, logistics and transportation software applications. So also, you will definitely need computers, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
When it comes to choosing between renting and leasing an office space with good parking, the size of the school bus transportation services company you want to build, and your entire budget for the business should influence your choice.
If you have enough capital to run a standard school bus transportation services company, then you should consider the option of leasing a facility for your office. As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.
Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Professional Bus Drivers, Bus Assistant, Accounting Officer, Business Development Executive/Marketing Executive, and Customer Service Officer.
Over and above, you would need a minimum of 10 to 12 key staff to effectively run a medium scale but standard school bus transportation services company. Please note that you would also need the services of automobile servicing and maintenance engineers.
If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you. Hence you are expected to contract out some roles.
The Service Delivery Process of the Business
On the average, the way school bus transportation services company works varies from one company to another, but ideally, a school bus transportation services company is expected to first and foremost hire highly skilled and licensed bus drivers with commercial driver’s license and get their comfortable buses available for schools.
Once a client signs up with the company, they are committed to convey students and staff members to and from school and also transport them for other extra – curricular activities.
It is important to state that a school bus transportation services company may decide to improvise or adopt any business process and structure that will guarantee them good return on investment (ROI), efficiency and flexibility; the above stated business cum services process is not cast on stone.
16. Write a Marketing Plan Packed With ideas & Strategies
Usually, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a school bus transportation services company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands determining the market direction for the school bus transportation services line of business.
Schools and parents will patronize your services if they know that they are going to get the best of services for their wards and staff members and of course value for their money.
As a matter of fact, your marketing strategy will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service. You should ensure that whenever your customers hire your services, they will get excellent services.
The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort will be directed to internet users and your website will become your number one marketing tool.
These are some of the marketing ideas and strategies that you can adopt for your school bus transportation services company;
- Introduce your business by sending introductory letters alongside your brochure to all the schools and households in and around the communities you intend operating
- Advertise your business in relevant transportation and school magazines, radio and TV stations (make yourself available for transportation related talk shows and interactive sessions on TV and Radio)
- List your business on local directories/yellow pages
- Attend international transportation expos, seminars and business fairs
- Create different packages for different category of clients in order to work with their budgets
- Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks
- Engage the services of marketing executives and business developers to carry out direct marketing
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your school bus transportation services at a price that is highly attractive is to ensure that you source your initial startup capital from sources that won’t put pressure on you or give you high interest rate.
Another strategy that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products and services.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
18. Develop Iron-clad Competitive Strategies to Help You Win
The school bus transportation services industry is a competitive industry, and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to operate safe and affordable services.
Organizations and people will always hire your school bus if they know that you have a better option especially as it relates to transporting their students and staff members to and from school. Another strategy that you can adopt is to ensure that your organization is well positioned; key members of your team are highly qualified and certified in their chosen career path especially your professional drivers.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your services delivery, they can hardly source for alternative service providers or products.
If you can continue to improve on your services and your customer service delivery, then you won’t struggle to maintain loyal customers and also ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized emails and above all, you can easily receive complaints and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secret of larger corporations is that they are willing to spend fortunes to boost their brand awareness and communicate their corporate identity the way they want people to perceive.
If your intention of starting a school bus transportation services company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
In promoting your brand and corporate identity, you should leverage on both print and electronic media and also social media. As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and far reaching.
Another strategy is to sponsor relevant community based programs, TV and radio programs, advertise your business in relevant magazines and newspapers. Below are the platforms you can leverage on to boost your brand and to promote and advertise your school bus transportation services company
- Place adverts on transportation and school magazines and related newspapers, radio stations and TV stations
- Encourage the use of word of mouth publicity from your loyal customers
- Leverage on the internet and social media platforms like YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms to promote your business
- Ensure that you position your banners and billboards in strategic positions all around your city
- Contact schools and households in your community by calling them up and informing them of your school bus transportation services company and the services you offer
- Advertise your business in your official website and employ strategies that will help you pull traffic to the site
- Brand all your school buses, and official cars and ensure that all our staff members and management staff wears your branded shirt or cap at regular intervals