How to Start a Private Bus Transportation Business in India? [Cost, Requirements]

Running a transport business in India is quite profitable. There are different types of sectors within the transportation segment, one of which is private bus transportation. Private bus transporters run buses within a city, within a state, across states, and also ferry corporate passengers from one point to the other on set routes every day.

If you wish to start a private bus transportation business in India, there is some amount of groundwork that you will need to do before you begin setting it up. We’ve simplified it for you and got you all that you need to know about setting up your transportation business.

Steps Involved in Setting Up a Private Bus Transportation Business in India

1. Preliminary research

Before setting up your transportation business in India, you must know the industry inside-out.  You must understand how the industry operates, the legalities that the industry is bound by, and the rules and regulations that the business must follow. Since you are looking to set up a private bus transportation business, you need to be well aware of the rules and regulations that govern bus transportation for passengers.

2. Business plan and registration

Once you have done your preliminary research and know the basics of the industry, it is time to chalk out your business plan. This must include the kind of buses that you would like to include in your fleet, both in the short term as well as in the near future, the market segment that you wish to target, mission statement, your vision, perform competitor analysis, projected expenses, and the structure of your business. Your business plan must also include your business model –

• Whether you wish to buy your buses or lease them
• What services do you wish to provide to the customers?
• Costs involved
• What is your competitive advantage compared to your competitors?
• What routes do you want to operate on?
• What are your marketing and promotion plans?
• What challenges do you expect to face in the first 6 months, 1 year, and so on?

This business plan document is going to be your blueprint to help you through the initial few years of your private bus transportation business.

3. Vehicle buying and loan

With your business plan done, the next important thing to do is to source the vehicles - rent/lease or buy. If you wish to buy your own fleet of buses, it is always recommended to buy up to 2-3 buses initially. This will require huge capital, and so, investing in too many vehicles initially is not recommended. You can buy a used bus, as they cost less and you can purchase 2-3 vehicles in one shot with your initial investment. Based on your finances, you can also begin your loan application or borrow money from the investors, if any. Never buy just one bus and try your luck on the same.

4. Decide on a profitable route

Once you have decided your vehicles, it is now time to shortlist and finalise the routes that are the most popular. While you determine the route popularity, you must also perform some expense calculations that can help you determine which routes are also profitable.

5. Secure licenses and permits

Setting up your private bus transportation process requires you to get a whole lot of licenses, permission, and permits for the business as well as the vehicles. You will need the license required to transport passengers, a license as a transporter, RTO permissions, and other necessary permissions to be able to permit the buses to move within a state or from one state to the other.

6. Hiring

Every business is successful due to great leadership and dedicated staff. The next obvious step to setting up your transport business is hiring the staff who will run your buses and manage the customers in-transit.

7. Marketing your bus transportation business

Once the staff is on board, the next step is to launch the business and begin marketing it. It is important that you market to your target customer. You must also list yourself on online portals like Redbus, Bitla, Abhibus, etc. With online bookings becoming the new norm, people are usually looking up tickets here. Getting yourself up on these portals and attracting your customers is the best way to ensure bookings keep coming in regularly. In fact, 90% of private bus bookings come from the above-mentioned online portals.

Another way to get bookings is by partnering with booking agents or owning a physical office where your customers can make bookings.

8. Design the best customer experience to create trust

With the primary work and setup done for your private bus transportation business, it is now time to work on creating the best customer experience for people who ride your buses. This is where you can really make the difference in being different from your competitors by giving your customers perks and benefits like online check-ins, offering complimentary water bottles, snacks, premium seats with added leg rooms, etc. A great way to gain your customer trust and retain is by having a robust customer service and care team. Most bus transport providers often overlook this.

9. Grow your business

It will take anything between 3-6 months or even a year for your private bus transport business to take off and give you substantial profits. Work consistently on marketing it to more customers, retaining the existing and new customers, and continuously making your process more and more efficient.

With consistent growth in terms of customer numbers, a high percentage of returning customers, and increasing profits, the next step is to meet demand with the supply by increasing your fleet and routes and setting off a virtuous cycle of a successful transport business.

Is a Private Bus Transportation Business in India Profitable?

Now that you are armed with all the information you need to set up your private bus transportation business in India, are you wondering how profitable this business is? Here are some factors that affect this transportation business’ profitability:

• No matter the route of your bus, there are so many bus operators and transporters that there is always a cut-throat competition on ticket pricing, and putting a tight ceiling on the prices of the tickets.
• One of the biggest hurdles of setting up this business is its initial high cost of procuring new vehicles that result in steep financing options. If you are looking to purchase luxury coaches of Volvo, Scania, and Mercedes, you might have to shell out around a crore in today’s time.
• Fluctuating Indian markets is something that we all have to live with. In a business like this, the fluctuating markets can have an impact on your newly launched private bus transportation business.

Conclusion

Setting up a private bus transportation business requires a lot of financial investment, time, and consistent effort. While everything may appear set from the get-go, it takes some time to gather a clientele. The business is a very capital intensive one and requires one to have enough financial backing for sailing through the initial rocky years. However, cutting through tariff restrictions, market fluctuations, and price wars, this is a great business to enter as there is always a demand in this segment.

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FAQs

Q. How long can the buses ply in your fleet?

Ans: If maintained well, good quality Volvo buses can ply for around 2.5-4 lakh kilometres.

Q. Which buses should you invest in Volvo or simple buses?

Ans: While simple buses are way cheaper than Volvos reducing your initial investment cost, people prefer Volvo buses for their comfort. So, it is better to invest in two Volvo buses initially that can ply to and fro on your selected route.

Q. What kind of initial investment are you looking at to set up this business?

Ans: The initial minimum investment in a private bus transportation business is anything around INR 50 lakhs to 1 crore.