Abroad, the sphere of car rental, clothing and various things has a very wide popularity. In this article, we will take a closer look at a business that is built specifically on car rental.
This business is especially popular in resort towns, or in regional centers. In small towns, the demand for such services is not at all profitable. So people, for example, while relaxing in a resort, will be happy to rent a car for trips to various excursions, or residents of a big city whose car, for example, is being repaired, will also use this service. Well, and of course, the whole industry of this direction relates to the rental of wedding or executive cars. Let’s talk in more detail about how to open a car rental business, and what you need to count on after establishing all business processes.
Car park
To start in this business, you will first need to purchase cars and form a full-fledged fleet of vehicles. Here you first of all need to decide in which niche you will work. If you rent an executive class car (including wedding limousines, etc.), then in order to purchase such a fleet, you will need more than one hundred thousand dollars. The best solution would be to open a rental car of the middle class or domestic cars. So, for the purchase of 5 foreign cars of the middle price segment, you will need about $100,000, $20,000 each, and for the purchase of 5 domestic cars, about $50,000. You can also save a lot and buy used cars, but then you need to be prepared for more frequent maintenance.
After you buy a car, you need to insure it. It is also worth considering the rent of a parking lot, an office and the payment of salaries to employees, but more on that below.
Staff
In order for your business to function to its full potential, you will need:
– manager (customer service);
– an accountant, you can also contact various companies that provide this kind of service;
– a technical worker, more precisely an auto mechanic who can work part-time as a driver.
All expenses for the salaries of employees must be calculated individually, so it is difficult to judge here. You can ask your friends how much they get in such jobs.
Place
Location is one of the very important factors and it is worth paying special attention to if you want to build a successful car rental business.
It is advisable to rent a parking lot and an office near the motorway, so that everyone can easily find you, even tourists who have come on vacation. The more people pass or drive near your parking lot every day, the less money you will invest in advertising.
Advertising
Everything is standard here: leaflets, ads in various media, your own website (it can bring a lot of customers), a bright sign and much more. You will have to spend a lot of money on advertising during the period when only your business will be unwinding, but without it, nowhere.
An excellent solution would be to launch an Internet site with prices for services and real photos of cars. Tourists are looking for cars on the network, and when you connect contextual advertising, you can establish a constant flow of customers. If we consider car rental as a business, then perhaps contextual advertising is one of the most effective tools in this area of activity.
Income
The cost of renting a car for one day varies in the range of $15 – $35 per day.
Experienced entrepreneurs in this area say that the profitability of this business is 20% – 25%. At the same time, in order to ensure such an indicator of profitability, it is necessary to ensure a constant load of cars that are rented. In the business plan of car rental, you need to lay the value of the car load – 65% – 70%.
The most profitable is the format of long-term car rental for corporate clients. In this case, the daily rent is reduced by 15%, but due to the constant workload of the car, you can have a good profit.
Conclusions
It can be emphasized that a large investment is required to start, but the car rental business is gaining popularity and you can earn good money on it. Please leave your feedback about this activity.