How to start a bus company
Whether you want to do the local school run or offer a nationwide service, starting a bus company could be right for you. Learn how here
How to start a bus company – the essential steps:
With a range of vehicle types to choose from and array of target audiences to focus on, starting a bus company gives you plenty of options. You can start small with a minibus and grow into a large company with a fleet of vehicles.
Alternatively, it could be that you focus solely on coach hire and have one large vehicle. Whichever you choose, it’s a business idea that’s flexible and relatively lean to run so you can match it to your lifestyle, as well as your professional goals.
If you’re interested in starting your own bus company and not sure where to begin, read on for our step-by-step guide. We’ll cover the essential information you need to know to get started.
1. Find your niche
When you first picture what starting a bus company might look like, you’d be forgiven for thinking it’s only all about intercity travel. While that’s certainly one key area, there are a whole range of different types of bus companies available.
What are the different types of bus businesses?
- School services – take and collect children from local schools
- Luxury vehicles – offer transport by executive coaches
- Transport for parties – get guests to and from venues
- Day trips – group travel to places of interest
- Intercity travel – provide national services
- Tourism routes – cater for sightseeing trips
- Care home transit – offer transport between care facilities and associated places
Choosing between these options will ultimately come down to deciding where your strengths lie. It means figuring out what specific skills are needed for each type of bus business.
It may be worth considering seeing if you can get a Start Up Loan (external partner site, link opens in a new tab) to help you with financing, and mentoring to start this business idea. You'll also need to think about registering your business, either as a sole trader or as a company - if a company, then Smarta Formations (external partner site, link opens in a new tab) are an organisation that can help you set up.
For example, you’ll need to be a patient and caring person to work a school bus route. While offering a transit service to and from parties and venues is more likely to need good people skills and an upbeat, sociable manner.
These are just some factors to consider – you’ll also need to look at it from a business perspective too, such as how much longevity is available in each option in the area you want to operate in, as well as the revenue potential.
2. How to choose the right location
Picking a prime place to operate your bus company from is crucial because you need to choose a location that can offer you a steady stream of customers, as well as the potential for growth. Here are some ideas to think about.
- Nationwide services – offer routes between cities across the country
- City centre travel – specialise in transit in particular towns
- Events transport – provide transport to and from stadiums and conference centres
- Transport hubs – base services around train or bus stations
- Rural routes – connect remote locations
Some factors that may influence your decision include: work/life balance – you’ll need to work out how much time you’ll spend on the road away from home; driving ability – sitting in city centre traffic jams and navigating winding country roads require different skills; as well as workflow – if you opt for an events transport, bear in mind this is likely to be seasonal work.
Now that you’re aware of the different types of bus companies and location options available to you, it’s time to think about your business strategy.
3. Do market research
Take some time to look into the bus companies currently operating in your local area and/or the niche you want to break into. Go online and find out what services they offer and consider what gaps are visible.
Similarly, local newspapers and notice boards in supermarkets and other places can be helpful to see if any community groups or other organisations are looking for bus or coach hire.
While online research will get you so far, it’s also really useful to get on the phone and make contact with the groups you want to target.
For example, if you’re interested in starting a school bus company, find out from your local education authority or school board if and when they put transport contracts out to tender. Plus, be sure to ask about the process. Try to collect as much information as possible at this stage.
4. Write a business plan
Once you’ve gathered your initial research, it’s time to think about organising it into a coherent and practical business strategy.
It’s essential to write a business plan – not only to help you stay on track to reach your goals and targets, but it’s also often a necessary document if you’re trying to secure funding too.
A free business plan template is available to download here.
5. Research costs and equipment
All businesses require thorough research into the costs and necessary equipment needed to get started.
This is especially true when running your own bus company, where you might potentially be operating multiple vehicles on the road at the same time. They will all require maintenance and servicing, not to mention the initial outlay as well.
So what costs and equipment do you have to think about?
- Vehicles – allocate funds to purchase a bus, or consider a long or short term lease, if more suitable (you can find a cost breakdown below)
- Maintenance – the coaches will need repairs and fixes, as well as MOTs and other essential services
- Insurance – minibuses and coaches require specific bus insurance (see below)
- Upgrades – as your business grows over time, you’re likely to require new and improved vehicles
- Design – depending on your brand, you may need to customise the vehicles, as well as have creative, professionally designed promotional material
- Sign-writing – it pays to sign-write your fleet with your business’ name and booking/contact details; your buses are free on-the-go advertising, after all
How to choose the right type of vehicle
This decision will often be tied into the type and location of the bus business you want to run that we covered in step one.
Sometimes, this will be a clear choice – for example, if you plan to offer intercity travel, you’ll need a large capacity coach. Here we break down some of your options.
- Luxury – opt for extra details such as air-conditioning, high-spec finishes, leather seats as well as more leg room, plus TVs and tables for a quality coach business
- Vintage – consider classic London red buses or retro coaches for an eye-catching and quirky bus company
- Practical – large capacity coaches or minibuses with accessible features are examples of practical vehicles that allow you to put your passengers’ requirements first
How much does a minibus cost?
There are a variety of factors that will determine the price of a minibus. Here are some key questions to consider:
Used or new?
While a used minibus will have a lower purchase price than a new vehicle, be aware of potential faults or other work that it may need to be roadworthy.
On the other hand, a new vehicle will require greater upfront expenditure, although will be ready to drive straight away.
Buy or lease?
If you’re not ready to purchase a vehicle, then a short or long term lease could be an ideal solution.
Leasing is essentially a fixed term rental – you pay the company a set amount, usually on a monthly basis.
Plus, as leased vehicles can come up for a sale after the agreement expires, you could purchase the vehicle eventually.
Alternatively, buying a minibus means you have greater control over the specifications, as well as the ability to customise your vehicle, such as sign-writing.
Essentially, this decision comes down to your finances, as well as how much control you want to have over design.
Other additional factors that could affect the cost include:
- Bluetooth capacity – if you need your vehicles to be connected to the internet while driving then this functionality is likely to increase the price
- Delivery – will you have to collect the vehicle or will the seller drop it off to you?
- Extra features – automatic doors, wheelchair access as well as luggage/roof racks are additional features that could affect the price
- Mileage – if you’re considering a used vehicle, check the mileage for how far it’s travelled
- Tachograph – the device that measures distance, speed and other activity. Will it be pre-fitted or will you have to install it separately?
How much does it cost to buy a minibus?
|Used||New||High-end/Fully wheelchair accessible|
|£1,000 – £20,000||£20,000 – £30,000||£30,000+|
How long can you lease a minibus for?
|Short term||Long term|
|1 – 12 months||12 – 48 months|
Leasing prices are variable, depending on the provider, the length as well as the model or make.
Generally, leases are available from £150-£500 per month, depending on the type of vehicle you require.
Remember, you can factor in the costs of your minibus (whether you buy or lease) into the coach hire prices you set for your customers.
6. Understand licence and regulation requirements
If you’re interested in finding out how to start a bus company in the UK, then understanding the licence and regulation requirements is essential.
Minibuses are almost all manual vehicles so ensure you (or your staff) have the correct licence.
Note that different rules apply for running a bus company in England and Wales, as well as Scotland. If you want to operate a local bus service in London, there are specific rules for the capital too.
What are the requirements for school buses?
Entrepreneurs that are interested in starting a school bus company will have to factor in additional requirements. For example, DBS background checks are a requirement to work with children.
Additionally, it could be useful for your staff to undergo first aid training. There may also be extra insurance requirements for transporting children in vehicles.
How much does a minibus licence cost?
To gain a minibus licence, you’ll need to complete specialist driving training. This is conducted on an hourly basis and is determined by your current driving level.
On average, for those completely new to minibus driving, training and testing will cost between £700-£1200.
What is a D1 licence?
If you plan to carry nine people or more in your vehicle, then you’ll need a Public Service Vehicle (PSV) licence.
This is also known as a D1 licence, which is a category of driving licence and requires an additional driving course, as mentioned above.
When driving a minibus (a vehicle that can seat nine-16 people plus the driver) for hire or reward, then these additional licensing requirements come into effect.
You may also hear about a Passenger Carrying Vehicle (PCV) licence, which is part of the D1 licensing category.
Smaller vehicles with fewer passenger capacity will also need the PSV licences, if separate fares are charged for the journey.
There are four different types of PSV licence:
- Standard licence – national
- Standard licence – national and international
- Restricted licence
- Special restricted licence
If you plan to run your bus or coach company in London, then you’ll also need to apply for a London Service Permit. Note that a minimum of three months’ notice is required.
Why is minibus insurance necessary?
As you’ll be driving people and offering a transport service for a fee, it’s absolutely vital to ensure you have the correct insurance in place. You can use insurance to protect your vehicles, as well as your staff and passengers.
You can opt to insure your entire fleet with the same provider for easier organisation, as well as the possibility for discounts. Be aware that higher charges are likely for liability to provide cover for your passengers.
For more information, you can check out our relevant business insurance pages, including employers’ liability cover if you employ drivers.
What is vehicle tracking?
Whether you’re running one vehicle or managing a large fleet, ensuring that your drivers are following the correct routes and that the services are running to the timetable is going to be essential to your company’s success.
Plus, making sure your drivers are taking sufficient rest stops is vital too, as there can be significant consequences of driving while tired.
That’s where vehicle tracking steps in, using GPS technology to monitor and track driver and vehicle activity. You can view the data and use it to drive business decisions, all the while putting safety at the forefront too.
7. Find customers
Once you’ve thought about the type of bus business you want to start and created a business plan, along with researching the relevant requirements, it’s time to find customers.
You could buy an existing coach hire business (and so a readymade customer base), although be sure to check why the business is being sold – you could gain a glowing network or inherit disgruntled customers.
Whether you buy a business or set up your own start-up, branding is going to be key to distinguish your business from your competitors. This means thinking about:
- Your bus company name
- Your bus design
Whichever route you choose, there are a number of ways to reach your target audience.
- Create a website – whether you opt for a website builder or choose a web designer, an online presence is vital
- Print flyers – display in local shops and attractions or hand them out
- Sign write vehicles – display your business’ name, logo and details on your vehicles
- Word of mouth – attend business events and fairs, as well as tell your network
- Social media – use the platforms most relevant to your target audience to reach them
- Business cards – hand out cards with contact information on to potential customers, partners and suppliers
After creating your marketing materials, it’s crucial to distribute them accurately. Think about places where your potential customers are likely to be, such as:
- Accommodation providers
- Food and beverage businesses
- Tourist attractions
- Transport hubs
What are the next steps?
Now that you’ve read about how to start a bus company in the UK, from how to find a niche to the essential equipment to acquire, now’s the time to actually get going and start your own bus company!