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How to Run a Driving School in the USA

Learn the merits of flexible pricing, industry partnerships and patient, personable instructors

With around nine in 10 American adults aged 25 and over having a driving license, the driving schools sector continues to grow at a healthy rate.

Aimed at aspiring or inexperienced driving school owners, the following are pointers on benefiting from this growth by effectively marketing and delivering driving instruction to unlicensed learners, commercial drivers and those seeking to erase speeding tickets or reduce insurance premiums.

Improving the Business

You can improve your driving school business by optimizing your service offering to reflect demand for services that are underserved in your local area.

You might, for instance, grow into an all-purpose outfit offering both on-road training and pre-licensing courses, and catering to aspiring and licensed drivers, commercial drivers, and those seeking defensive driver courses in order to reduce insurance premiums or get traffic violation points rescinded.

Or you might specialize in one or more of these areas.

Perhaps you might respond to high volumes of queries requesting compressed, intensive courses or more flexible lesson times.

Flexible pricing and packages are a good way to meet the needs of a variety of customers without particularly complicating your business model. You might, for instance, offer one hour, 1.5 hour and highway lessons, bulk discounts for prepaid lesson packages, or cheaper rates for students, veterans or off-peak hours.

You can burnish your reputation by getting yourself on the American Automobile Association (AAA) Approved Driving School Network, as well as securing partnerships with or accreditations from the relevant State Department of Motor Vehicles (DMV), the Better Business Bureau and insurance companies.

Given the age profile of most new learners, many driving schools also reap dividends by striking partnerships with local high schools.

Consult your DMV’s list of approved providers of lesson materials and study local routes, including your local DMV’s testing route, to ensure appropriate gradients of difficulty as students progress and to maximize their chances of success.

What Do Learners Look for in a Driving Instructor?

Operating a vehicle on the road for the first time is incredibly daunting, so nothing is more important than putting your students at ease, building their confidence and guiding them safely as they improve gradually over time.

Whether improving your own skills or hiring instructors, be mindful therefore that learners value not just the right knowledge but also friendliness, a calm demeanor and encouragement, constructive (not bad) criticism and an openness to questions.

Effective instructors explain driving processes clearly, succinctly and patiently and introduce learners to more complex procedures and challenging roads only when the driver is ready.

What are Your Obligations Around Licensing and Qualifications?

Your state’s DMV will provide information on licensing requirements for you, your instructors and the business itself.

Instructors typically must complete a driving instructor course, undergo screening checks and pay a licensing fee, while businesses may need to undergo inspections to comply with licensing criteria.

Make sure you adequately screen candidates to ensure relevant criteria are met when recruiting new instructors.

Market Research

Identify other local driving schools and examine their services and pricing, competitive advantages and disadvantages, and consider the opportunities presented by local demographics.

For instance, a nearby university could provide a basis for new partnerships, student discounts and enhanced provision for new learners.

Keep abreast of the latest market research, such as US-focused driving school sector reports from IBISWorld and AnythingResearch, and a global report assessing the impact of Covid-19 from Kentley Insights.

This is how you might learn, for instance, that US citizens are learning to drive later in life – only 61% of 18-year-olds had a driver’s license in 2018 compared to 80.4% in 1983. It’s not just young people you need to consider in your marketing, pricing structure, course materials and lesson times.

Also consider local regulations. Many US states mandate insurance discounts and reductions in traffic violation points upon completion of an approved defensive driving course, for instance. The most generous incentives are offered in Arizona, California, Florida, Nevada, New Jersey, New York and Texas.

Interesting Industry Facts

  • Penn State University professor Amos Neyhart started the first-ever US high school driver education course in 1934 at a high school in Pennsylvania.
  • In 2020, there were 20,824 driving schools in the US, collectively generating $911 million in market size.
  • Social media, high costs, tougher licensing restrictions and the emergence of Uber have been variously blamed for growing numbers of teenagers delaying getting their license

Growth Potential 

With the number of cars on US roads continuing to climb by the millions annually, growth prospects for this sector are exciting.

Nevertheless, significant operating costs and exacting safety and licensing requirements mean it still requires careful management to join the countless driving schools that prosper across the US.

And it pays to keep an eye on broader trends – including the aforementioned drop in teenagers learning to drive and the still-distant prospect of self-driving cars – if you’re to keep your business model relevant.

Marketing Ideas

Your learners are obviously not likely to be repeat customers once they’ve secured their license, so you need to be proactive with marketing.

Whether by email or in person, ask satisfied students if they might kindly leave positive reviews on Google or provide a testimonial for your website.

With your biggest source of business still likely teenagers and young adults, it can be valuable having a presence on platforms such as Instagram and Twitter.

However, unless you’re a lifestyle brand the impact of marketing to young people on these platforms can be mixed. It’s arguably more important to have an SEO-optimized website, maintain a Google My Business listing and invest in pay-per-click advertising.

And don’t neglect the basics, such as emblazoning your vehicles with your school’s details.

Be imaginative – perhaps you could hand out flyers outside traffic courts advertising courses that could nullify traffic tickets.

Financing Your Growth

The most obvious means of financing additional instructors and vehicles are regular small business loans, which require a business plan that sets out the basis on which the bank can expect repayments to be met. As a driving school you will have assets, such as cars and premises, to use as collateral.

You can get more favorable terms from loans backed by the Small Business Administration (SBA), although the criteria is more exacting and the application process lengthier.

Angel investors, typically high-net-worth individuals who fund startups in return for equity, could provide significant capital, but will seek high growth business models, such as using an all-electric fleet, vehicles adapted for disabled drivers or innovative online services.

Exit Strategy

You may eventually sell your business for purely personal reasons, such as a desire to retire, switch sectors or relocate geographically.

Commercial reasons, on the other hand, can include the business struggling and a feeling a new owner is needed to revive its fortunes. Alternatively, the business could be performing well, but you want to cash in before developments – say, the arrival of new competitors or, perhaps decades from now, the eventual dominance of self-driving cars – that make continuing your success much harder.

Whatever your eventual motives, it pays to develop an exit strategy months or even years in advance of a likely sale, so you can make the business more valuable and appealing to potential buyers in the meantime.



Megan Kelly

About the author

Megan is the Content Manager for Dynamis and researches and writes for BusinessesForSale.com. She is an expert writer and aspiring digital marketer.

@Be_theBoss

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