Central Indiana's newest limousine company plans to make only 10 percent of its revenue from passenger fees.
Indy Racing Limos' three principals expect to generate 85 percent from sponsors and the other 5 percent from use of their unique racer-like cars in corporate displays and business promotions.
The company is the first limo firm in Indiana attempting to generate the bulk of its revenue from corporate sponsors plastering their names and logos on vehicles. Even so, founders Roy K. Ward, Joseph Kines and Alexander Schank are confident their business model will work.
"When we were forming our business plan, we asked ourselves, 'Does Indianapolis need another limousine service?'" Schank said. "But we operate on an entirely different business model."
The company's only car so far, a custommade stretch Pontiac Grand Prix bearing Indy Racing Limos' logo, is a head turner. The limo is a spitting image of the cars made famous by NASCAR, except for some 120 inches added to the middle.
The limo's interior is outfitted with a lot more than safety harnesses and mesh netting. This luxury ride for 10 passengers has lighted aisles and ceilings, three flatscreen plasma televisions with eightspeaker surround sound, a DVD player, a stereo system, a video-game system, three fridges, a bar and an intercom.
The purchase price of the tricked-out racer: $65,000. Riders fork over $100 an hour with a three-hour minimum to race around central Indiana, a rate competitive with the dozens of other area limousine services. Indy Racing Limos serves Marion and the surrounding counties.
The trio launched the company late last fall, and is so far using word-of-mouth to grow it. The partners hope to launch a formal marketing campaign this summer.
The limo is proving popular for weddings, bachelor parties and other special events. Indy Racing Limos also has been commissioned by organizers of local conventions and special events, including the Testostorama Men's Expo last November. The ABC TV network used it to bring in special guests for Indianapolis Colts' "Monday Night Football" games.
"We heard about it, and thought it would be a really great way to drive our celebrities around," said Ray Compton, president of Compton Strategies and organizer of Testostorama. "I think it has tremendous marketing potential because there's nothing else like it."
Testostorama organizers said the limo got more stares than the celebrities it carried, which included former Chicago Bear William "Refrigerator" Perry and singer Cindy Morgan.
Indy Racing Limos has no interest in owning a big fleet of stretch rides like most limo companies. The company plans to add a second limo this summer. It is considering a stretch Chevrolet Monte Carlo or even a Silverado pickup that resembles vehicles used in NASCAR's Craftsman Truck Series.
Indy Racing Limos hopes to grow to a four- to five-limo stable, each with the potential to gross $250,000 to $350,000 annually, said Kines, company president.
The company will offer about a halfdozen sponsorships per vehicle, with options of putting logos on the hood, roof, trunk, side panels and fenders. Sponsorship packages likely will range from the low to high five figures, company founders said, with additional options to use the vehicle for company entertainment, transportation and marketing events.
"This is such a unique idea in advertising it's difficult to say how it will do here," said Randy Kron, president of local ad agency Kron & Associates. "I think this type of sponsorship could work for an established brand that wants to extend their exposure and identity."
Indy Racing Limos says it's in the final stages of signing its first sponsors, including one of the city's top-rated radio stations.
"We think this is a very unique and specialized way of advertising not yet available in this market," Schank said.
This tricked-out ride represents a $65,000 investment for Indy Racing Limos' founders.