How to Start a Driving School Business

Tuesday, August 13, 2013

How to Start a Driving School Business

Operating a driving school can be profitable, but it requires an intimate knowledge of strict state laws and regulations. Because of this, plan to spend whatever time is necessary to research requirements for the state in which you live, fill out and submit the appropriate forms and get the necessary licenses before opening for business. Start-up costs is another area of concern. Depending on how you set up your driving school business, costs can range from $10,000 to $50,000, according to Entrepreneur.com.

Step 1

Contact your secretary of state's office for information on laws relating to commercial driving schools. Depending on your state, laws and regulations can cover items such as business and personal licensing requirements for you and your instructors, location requirements, vehicles, vehicle inspections, insurance and bonding requirements. If you have questions, consult with an attorney or other knowledgeable business professional before proceeding any further.

Step 2

Protect your personal finances by setting up your driving school as a limited liability corporation rather than as a sole proprietor or partnership. Depending on your location, this step includes tasks such as registering your business name, getting a business license and filing articles of incorporation. A good source of free information and assistance in completing this step is in person or online mentoring with a representative from SCORE, a nonprofit small business education resource (see Resources).

Step 3

Write a business plan that addresses start-up costs, location, equipment, curriculum and promotion. Refer to state regulations when writing your plan to ensure you comply with location, classroom, vehicle and insurance requirements. For example, if you live in the state of Illinois, your business plan should provide for a location in an area zoned for commercial, include a permanent outdoor sign visible from a minimum of 100 ft., and must include a minimum of 150 sq. ft. of office space and 300 sq. ft. of classroom space. In addition, all training vehicles must carry, at a minimum, vehicle insurance consisting of $10,000 property, $50,000 bodily injury and death of one person and $100,000 bodily injury and death of two or more persons. You can get help in completing this step via in person or online mentoring with a representative from SCORE.

Step 4

Get a driving instructor license. This is often a requirement whether you intend to train students or hire employees to conduct training. Licensing usually involves a written and behind-the-wheel test as well as a background check. Contact the Department of Motor Vehicles for specific requirements for the state in which you live.

Step 5

Fill out and submit all state-required paperwork and fees. Depending on your state, this can include an application, certificate of incorporation, copy of your curriculum, instructor license verification for you and any employees you hire, insurance verification for each vehicle, copy of your building lease and a set of fingerprints so your state can run a criminal background check.

Step 6

Promote your business via print, radio and Internet advertising. Contact your local school system, find if they contract out for student driver education and, if so, get information on the bidding process.

References (7)

Resources (2)

About the Author

Jackie Lohrey has more than 12 years of experience in advertising, technical and educational writing. She loves communicating via the written word and turning technical jargon into everyday, understandable English. In addition to writing professionally, Jackie works as a finance data analyst for Williams Lea, a global business outsourcing company.

Photo Credits (2)

No comments:

Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

Pages

Tuesday, August 13, 2013