- Form a Company Now! +
- Services +
- Compare Prices +
- Learning Center +
- HBS Blog +
- Make Payments +
In general, when you hear about entrepreneurs starting a new business, people tend to think of a storefront, office space or even a warehouse.
Entrepreneurs usually rent a space and begin setting up shop for the sales or service that they provide. This is very common, but may not be cost efficient for some businesses.
Recent studies show that 59% of hospitality facilities fail in the first three years of business. High rents or mortgage payments to secure an office location can often be a strain on small businesses.
However, more and more entrepreneurs are forming Delaware LLCs or corporations in order to run mobile businesses. In the past, one of the most common examples of a mobile business was an ice cream truck. This simple idea has now expanded to include taco trucks, hot dog trucks, cotton candy trucks, dog grooming trucks and bra trucks. Yes, bra trucks.
A company called True & Co, which thrived as a mail-order lingerie company, has opened up a mobile lingerie service. The challenge they faced with their online business was that women typically want to try on their bras to ensure the perfect fit before purchase.
This made it tougher for True & Co. to compete online, since their clients were hesitant to choose a suggested size based on a chart. The owners, however, did not want the expense of forming a brick and mortar storefront in order to solve this problem, so they decided to launch a Try-On Truck.
The truck spent the winter driving throughout the state of California. Customers scheduled appointments online, and chose a location from the schedule posted on the website. The True & Co. truck is not set up for browsing but rather with each particular client’s sizes and interests laid out for a personal shopping experience.
Other companies are taking advantage of a mobile location as well. SoZo offers a mobile salon experience anywhere in the state of Delaware.
They provide all the services you would expect from a brick and mortar salon, but in a luxury RV that shows up at your door.
The owners typically expect at least five customers at your location in order to keep prices reasonable, and cater to weddings, proms, senior facilities and corporate offices.
Once on the RV, each client receives a personal experience without having to travel to a specific location, sit in a standard waiting room or interact with strangers.
The influx of food trucks in both small and large cities is also adding to this trend of personalized, convenient service geared toward busy customers. These days, just about every type of food can be purchased via food truck: pizza, po’boys, Jewish deli sandwiches, gelato, donuts, tacos, falafel and more.
With the mobile business industry increasing, it is important to realize that generally all businesses will still need to have an official business address. They will also still be responsible for maintaining local compliance in their state of operation, such as Franchise Tax; business licenses; foreign registrations; Department of Transportation registration; and vehicle insurance.
With food trucks, there are usually additional compliance matters, such as Department of Health Inspections. If you own a mobile business, don’t make the mistake of thinking local compliance matters do not apply, since your business does not have a physical address.
This theory is often incorrect and could cost you a lot of money in fines. It is always a good idea to check with your local jurisdiction directly in order to find out how to keep your company compliant and in good standing.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.