Starting a business is an exciting time in anybody’s life. You are finally going to be your own boss, and make all the decisions by yourself. Car rental seems like an excellent idea to start with your entrepreneurial path, and you are absolutely right.
You have seen companies like hyrecar.com succeed, and now you want a piece of the car rental market too. However, as with every company, there is much to be done before you start getting those clients.
You probably already have a website running, you did your competition research, maybe you even have bought some cars. But is there something that you are missing?
Here are a few tips and tricks to help become the best car rental in town.
Calculating the total costs
Costs are the most significant part of your business plan. You need to know exactly how much you are losing before you make a profit. Let’s talk about the initial cost of opening a car rental.
First of all, the car fleet, so the vehicles that will create a profit for your business. Next, the office and its equipment, including hardware and software.
Then there are costs related to insurance for both cars and the business and the payment of incorporation fees. You also need to have some essential tools for car repairing, as well as a camera safety system.
Finally, you need to remember about the cost of people working for you and all your marketing activities.
Keeping in mind ongoing expenses
Then, come the ongoing costs that you also need to know. In fact, it is recommended for young entrepreneurs to assume the business won’t make a profit in the first few months, so you need to be prepared.
An on-site mechanic will cost you between 30 000$ and 60 000$ annually, just like an accountant or IT support technician. A regular employee will earn between 8$ to 12$ an hour.
Internet and utilities are an additional couple hundred dollars, along with vehicle service. What you spend on marketing is your choice, but be aware that effective marketing costs.
How much to charge?
Now, let’s move on to the fun part, that is earning money. Rates for car rentals vary depending on the quality of the vehicle and the location.
Generally speaking, the low end of car rentals, like a Nissan Versa, for example, costs around 35$ to 50$ a day. Upscale car rentals like a Lexus or
Audi will run upwards of 100$, 200$ or more per day. Offer a wide range of vehicles that appeal to drivers with different tastes and money in their wallets.
So how much can you make? If you find the right spot and vehicles, it is possible to make $50,000 to $100,000 in the first years running a car rental company. The scalability of your business depends on your business acumen only.
Here are the required administrative and legal steps that you need to make before the launch of your business. They are:
- Creating a business plan.
- Forming a legal entity that will protect you as an owner.
- Registering for taxes.
- Opening a business account and credit card.
- Getting your business card.
- Establishing accounting.
- Getting the necessary licenses and permits.
- Buying insurance.
These are pretty much all the steps for you to open doors to clients. Make sure you have every single thing from this list checked.
Being able to start a business is not enough; you need to attract people. The best way to start is by defining your brand. Strong branding can do wonders for a company. It’s the 21st century, so obviously you should have a great website.
Advertise using all kinds of mediums, both traditionally and on the web. Use brochures, flyers, and magazine ads, as well as SEO tools and social media.
However, for a car rental business, the most crucial is to establish relationships with local businesses.
And make sure you advertise your services on airports or train stations, so where a car might be needed. If you want to have a loyal customer base, you can create a loyalty program and make people come back for another ride with you.
Car rental is not that complicated of a business and is an excellent idea for a beginner entrepreneur to run. And if you are a vehicle enthusiast, it is a win-win situation for you.
It might feel that there is a lot of work, but every business owner must go through this process. And if you are not sure, ask them if they regret the initial effort they had to put in to become successful.
Following the tips from this article should cut you some time and stress, so do it. Let’s rent some cars and make some money!