How to Start a Successful Driving School Business: 9 Tips by Experts
The rule of any successful new business is to supply goods or services that are in demand. That’s the beauty of creating a driving school–you’ll have ready-made demand in just about any reasonably sized city in the country.
But before you can do so, you need to figure out all the details of creating quality instruction, meeting state requirements, and marketing your school to your community. Read through our 8 tips so you can lay a solid foundation for your new driving school, increase profitability, and create long-term success!
1. Understand State Licensing Requirements
When starting up, the first thing you need to understand is state regulations. Every state has different regulations for driving schools. You’ll be asked to complete a series of forms and prove that you have all elements needed to fulfill the state’s licensing requirements.
These requirements may include:
- Establishing a physical location that meets state regulations.
- Completing written, road, or other tests as well as certain instruction.
- Posting surety bonds with the state.
- Passing a criminal background screening.
- Providing insurance on all vehicles.
- Creating a record-keeping system for required contracts and other paperwork.
The best way to find these is simply to go to your DMV’s website and search for the relevant forms. Here is an example from the California DMV.
2. Select a Business Structure
Just like establishing any other business, you’ll have to select a structure for your driving school for legal and tax purposes. Be sure to engage an attorney and accountant before finalizing your decision. Typical options include:
- Sole Proprietorship: Usually used for very simple businesses, but owners can be liable for business problems.
- Limited Liability Corporation: This is a middle ground, allowing you to avoid some personal liability without the complexity of establishing a corporation. Read more here.
- Corporation: As the most complicated business structure, a corporation selection will offer the greatest protection against liability.
3. Do Your Market Research
Although students become eligible for driving permits every day in every city, you’ll firstly want to understand exactly how many students will be filling the pipeline in the next several years, and secondly how many other driving schools are already serving your area.
- Take the time to research not only the number of high school students in your community but the number of elementary schools as well. See if you can determine population trends in your area and whether there is growth expected in the near future. There are a number of websites that can help you determine population trends for specific areas, here is a great tool that might help you.
- Find out what types of driving instruction is already available, including school-based programs and other competitive schools. Consider their price structure, online reviews, and locations before determining the location and scope of your business.
After this research, you should be able to answer the following questions:1. How much demand is there?
2. Are there competitors? How many?
3. Is there room for an additional school?
4. What is working for other driving schools? What is not working?
5. Is there anything you can do to differentiate your business and create demand?
If you take the time to do this research, you will be way ahead of most other schools and feel comfortable that there is room for your business to grow.
4. Create a Financial Plan
In order to ensure that your driving school is viable for the long term, you’ll need to create a comprehensive financial plan. Your accountant may be able to help you, but start by pulling together a list of your initial and ongoing expenses. They may include:
- Rent or mortgage on your physical building.
- Lease payments on your teaching vehicles.
- Marketing expenses.
- Wages and salaries of instructors and administrative staff.
At this point, you’ll need to determine if you have enough cash reserves to begin your driving school or if you need to seek investors, a business loan, or other outside financial assistance. If you do need additional funds, you’ll most likely be asked to submit a formal business plan.
It’s always a good idea to create a business plan with a strategy, goals, and time frame. You’ll need to continually track your finances, many new driving businesses do so using a simple excel spreadsheet.
5. Curriculum Creation
Once all of the business steps are underway, you’ll need to create a knowledge base, courses, and overall curriculum that will encompass the scope you’ve chosen to undertake. Check to see if your state has a mandatory curriculum and use that as a launching point. Many other organizations, including Zutobi, have already created courses and resources that you may be able to use.
If you’re offering an online or classroom course, be sure to incorporate the material that students will face on the knowledge test. If you are only offering behind-the-wheel, plan your driving sequence to practice and tackle the most important and challenging aspects of the road test. Some states do not allow practicing on the actual road test route; be sure to check local rules.
6. Decide What to Offer
Once you have your expenses outlined and understand how much your competition is charging for similar services, you’ll need to create a price list for your driving school. Many schools will offer a variety of services, such as:
- Road testing
- Classroom instruction
- Behind-the-wheel instruction
- Package deals
Also, consider where and when lessons will be held, if you will pick up and drop off students, and whether you’ll allow the instruction vehicles to be used for the actual road test. Check to see if your state allows your school to conduct the road test.
7. Use Management Tools
When you have all of these things in place, it’s time to start teaching. If you’re a new school, chances are that you’ll do most of the teaching yourself. A huge part of an instructor’s day is student management and administrative tasks, and most instructors don’t even realize how much time they’re spending on these tasks! Remember, each hour spent on administration is an hour that could have been spent in the car with a student.
As a driving school owner, you’ll want to reduce student administration to a minimum so you, and your employees, can focus on what’s important – bringing in money.
8. Spread the Word
After you receive your license to open a driving school, you’ll want to create an advertising, SEO, and marketing strategy. In this day and age, having an online presence will be critical to letting potential students know about a new school opening up.
Here are some things you can try:
- Website. Be sure to select a name for business and secure a domain name for your website. Make it easy to spell and remember. You can seek professional help in creating a website or use one of the many do-it-yourself tools to help you create one.
- SEO. Now that you have your website, make sure it is optimized for SEO. The easiest thing you can do is to create a blog where you occasionally write about relevant driving topics and answer common student questions. You’ll also need to make sure that Google understands what you do and where you are based by clearly stating that information on you website. If you want to know more about SEO and how it can benefit you, we recommend that you read this guide.
- Social Media. Create social media accounts for your business to communicate with interested students and parents. Be sure to link to useful information as well as have details on how to contact your school.
- School Connections. In some cities, you may be able to advertise through the high schools themselves. Contact the office to find out more about what is allowed and how to serve their students.
- Local Media. Send news releases about your driving school to the local newspapers, radio and television stations. They may have an area dedicated on their websites for community announcements.
- Advertising. If you have the resources to do some targeted advertising in your community, you may want pay to help get the word out.
- Business Cards. Be sure to have business cards printed so they can be distributed in areas where potential students may be found.
- Instructor Cars. Most states require that vehicles used for behind-the-wheel training are clearly labeled with the name of the school, but this is a great way to advertise while your students are on the road.
- Swag. Consider ordering car magnets that warn other drivers that a student is learning to drive and include your driving school’s name. Hand these out to learners to use on their personal vehicles.
- Community Involvement. Another great way to get the word out is to participate in community work, church festivals, or conferences where you can hand out safe driving tips, talk with people, and give out advertising freebies. You may even consider joining the local Chamber of Commerce or offer to give driving safety talks through community venues as well.
9. Fostering Long Term Success for Your Driving School
The best way to succeed in a community is to provide excellent services at reasonable prices. While you cannot guarantee passing the driving tests simply by enrolling in your school, you can publicize your pass rate. Be sure you provide high quality instruction, and then share your successes in helping to prepare safe, responsible drivers through your future advertising, marketing, and online communications.
Keep in touch with former students through an annual update or even a personal birthday wish. If they remember having a good experience with your organization, they will be more likely to refer to your school when asked by friends and family.
Like all businesses today, your school will begin generating online reviews. Be sure to stay on top of the main review platforms, responding to both positive and negative feedback in a professional manner. If a student has a reasonable complaint, do your best to resolve the issue and use this information to improve future services. Don’t forget to request reviews on major platforms from your happy students. Many just need to be asked.
Finally, be sure to stay on top of any state-required record keeping and organizational requirements. Treat your driving school like the business it is. Take care of your employees and your customers by providing an excellent product and caring service. If you consistently do those basic things, your driving school will develop a positive reputation and be an important member of your local community.
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