Starting a New Business

Hi everyone,

I've recently quit my job and went traveling, now that I'm back I don't want to go back to my old job. I got a simple idea to start a shuttle service between the airport and the city area.

Target market: Budget conscious traveler e.g. backpackers, students etc…

competitors: A number of operators out there but they are not targeting any market in particular, they are just offering a service but I believe the price of their service is "premium" and I can discount it. I used the word premium very loosely, because if I was to offer the service, my service would be only be at most $5 dollars less than theirs.

Advantage over competitors: Better price, concentrate on a particular route that is currently not service by the competitors (they probably do service it but there is no direct promotion by them)

Problems: Market penetration

My main concern is how to get my service out there, if I do a google search e.g. shuttle bus - my competitors name came up first and I don't know how long it will take before my site will be even on the first page of google let alone the first result.

I thought of several ways to advertise my service e.g. with hostel booking engines, with discount airlines but the opportunity to advertise with them is not there or the cost is prohibitive.

Any advice would be greatly appreciated :)

Comments

  • If you're targeting back packers, you're best to talk to the back packers itself and promote there.

  • What city are you operating in? What's your website?

    Also, list your service on wikitravel.

  • Do you have a license and insurance to carry paying passengers?

  • Sweefu - I haven't got anything setup because setting it up means I'm taking the plunge not only in terms of money and time. I'm just thinking it through at the moment.

    Dasher86 - not sure what you mean by talk to the backpackers itself. I imagine that any backpacker or travelers would most likely to look for way to get from the airport once they book the airline ticket or maybe when they book the accommodation but advertising on either is not available or very expensive. To give you an idea, I've contacted a couple of airlines and ask about advertising on the confirmation email that they sent out. Both airlines, quoted me around the 50c per email that sent out. This would be great if the click through rate is at 100% but its less than 1%.

    Pjetson - of course I will if I go ahead with this.

    •  

      Have you researched all the requirements and costs? It's not going to be cheap.
      That would be a good start, as the results might quash the idea pretty fast.

      • Thrift, yes I have researched the requirements and costs.

        •  

          What sort of money are you looking at for setup?

        • You need a 12 passenger people mover, a trailer, a license to be a tour operator from the RTA. The cost will depend on how cheap I can get the car for but around $25k.

        • +7 votes

          @zoombie: Right, you're in NSW. You'll also need:

          • business registration
          • commercial vehicle insurance
          • at least $10m public liability insurance
          • personal and income insurance
          • vehicle maintenance plan
          • roadside assistance plan
          • backup vehicle plan
          • alternate driver plan
        •  

          @zoombie: to expand a little on the backup vehicle and alternate driver: if you're relying on word of mouth, you can't afford to inconvenience your passengers. If someone misses their non-refundable non-changeable flight (or check-in), it's your reputation at stake.

          You need a solid plan to make sure you can get people to their destination as promised should you or the bus become incapacitated.

    • I'm talking about taking backpackers (hostel) from the hostel to the airport.

  • If this is Melbourne, a lot of the backpackers know to get the 901 bus to Broadmeadows and then in to Southern Cross, then off and tram 96 to St Kilda. Costs like $4.

    • Its not Melbourne, its Sydney where it cost about $16-$17 to catch the train to the city. And its a 5 min ride lol.

  • Think about when you went travelling yourself. Would you be more likely to catch a train which was available every 15mins or wait around for 45 minutes for the people mover, just to save $5? How did you hear about ways to get from the airport to tourist destinations when you were travelling?

    Does the route you're proposing connect tourist destinations to the airport or just suburban places? Would it be just you? What happens in the event of traffic? Would people have to book you in advance or would you just hang out at the airport? What are the fees associated with running a business out of the airport?

    Sounds like it may work in Se Asia but maybe not here unless you had a lot of money to throw into creating a fleet of cars and pumping money into advertising.

    • lemc6125 - If you are new to a city, you want the easiest route to get to your hotel/hostel from the airport. The train is quicker but it drops you off at a station whereas shuttle bus actually drop you off in front of your hostel/hotel.
      The route I'm looking at is a tourist destination but I don't know how many goes there straight from airport as there are hostels around the area but not that many.
      I already research into the cost of operating, what advice I'm looking for is how to market a new business.

      • Sorry if my post wasn't relevant to your question, I was just thinking aloud.
        Marketing to budget conscious travellers is different than marketing to the general population. The budget conscious traveller or backpacker will hunt for the cheapest price and likes getting a discount. Word of mouth is very powerful in backpackers hostels - many backpackers take advice from the person at reception from where they're staying. So the hostel can be a very powerful source of business. You could possibly advertise X price via normal advertising medium but then offer X - 25% for customers at said hostel. Speak to some local accommodation places to see if this deal interests them (they will want a cut).

        • No problem, I appreciate the time that you and everyone else took to reply :)
          I think if I can convince those hostel booking website such as hostelbookers to allow me to advertise in their confirmation email I will get a huge advantage over my existing competition. Anyone here work for hostelbookers ;)

    • There are already airport shuttles operating in Sydney, so it doesn't seem like it is confined to Asia.

  • You could reach backpackers heading back to the airport with brochures in hostels. And the airport has tourist info places too.
    See:
    http://www.sydneybrochuredistribution.com/
    http://www.theinformedtourist.com/
    And contact the authors of tourist guides for the next time they update their books/online publications. Also the inflight magazines have ads for these type of services.
    Do you need some sort of authority from the airport? Considering they charge a toll on the cab drivers, I can't imaging they would be happy about private bus operators shifting passengers without getting their cut!

    • You need an etag that charges you based on the time you park there, sydney airport is privately own by macquarie bank and there's no such thing as a free lunch when it comes to bankers :)

  • What about partnering with the hostels themselves? They would then push your services and you could in turn sell theirs to arrivals who haven't picked accomodation before arrival?

    • Yes, I'm thinking about that option, I'm trying to be partner with a hostel booking engine. If that doesn't work out then I'll try to contact individual hostel.

  • +2 votes

    Depending on how you book the rides and offer your service you may need an operator's licence. http://www.rms.nsw.gov.au/business-industry/buses/index.html.
    The number of seats also affects the class of licence you need and will need a driver authority.
    http://www.rms.nsw.gov.au/business-industry/buses/drivers/in...

    $25k will not buy you a decent 12 seater bus. It needs to be checked by Transport and they are very strict.

  • How deep are you looking for the penetration to be? I believe the low cost market is usually quite competitive.

  • -1 vote

    Why not join uber, low capital outlay, work whenever it suits you, and would give you experience in operating a transport business and the related costs in maintaining a vehicle used for commercial purposes.

  • Hyper-competitive market.

    Hyper-competitive industry (keyword) for google too.

    Uphill battle, hard-to-scale, but u could probably earn a living.

    best of luck, zoombie.

    Regards, Zombie. ☺

  • This is great idea. We talk to lots of small businesses. One thing that you shouldn't overlook and try to find out is why the shuttle services do charge that premium prices?
    One is probably they hire drives and pay salary.
    They might have to pay commission to hostels or hotels as well.
    Or simply so they can to make worthwhile.

    I found in cairns was really cheap for shuttle. Probably see how their model is.

    Also try talking to existing operators and getting advice.

    Might as well get as much information as possible before you spend any money

    •  

      Cairns is a very different environment. There is a very high concentration of backpackers and virtually no 'city' where larger players would work. Sydney has the big city where shuttle companies have high volume low profit models that work.
      Very few make decent money though, so don't get your hopes up.

  • I seem to remember that there is a bus to the airport, 400 I believe?
    This was what I used to catch to avoid the airport fee.

    Edit: This is the one I'm talking about. It doesn't have the airport fee the trains slug you with. You can get off at Coward street and then walk a bit to Mascot train station.