In every country, city or town, car rental is one of the highly in-demand services. And for good reasons. As technology advances, more and more people have taken their work, education, and social life online, allowing them to travel from one place to another with ease. Hence, the global tourism industry also grows as people have more capacity to travel frequently. This translates into more clients and potential customers for the car rental business.
There’s no better time to start a car rental business than today. That is if you like to take advantage of this economic growth. If you want to start one now, we’ve prepared this guide for you to make your startup process a lot easier and faster.
The First Steps to Take: Identify Your Target Customers and Choose a Business Niche
What makes car rental startups like carhiremaltagroup.com a successful business is the company’s apt choice of target market and rental category. You can expect travelers, business executives, and companies as your main clients with a little mix of families and couples celebrating important occasions together. With your customer profile, you’ll be able to determine what business category to opt for, which can be either daily hire and contract hire.
- Daily Hire – With this type, you’ll be renting out your vehicle on a per-hour basis. Basically, this is suitable for entrepreneurs and tourists who visit your place only for a day trip.
- Contract Hire – Unlike daily hire, contract hire allows you to lease your car for a fixed number of days. This is perfect for those going on educational tours, company outings, anniversaries, and weddings.
Once these two aspects are ready, you can then proceed to the nitty gritty of creating a formal car rental business plan.
What Should Be In Your Business Plan?
The secret to creating a profitable car rental business lies in a realistic and comprehensive business plan. That’s because profit only follows if the plan is executed well. So, what should be in your proposal? These are the following:
- Industry Overview – For starters, study the niche you’re about to enter, as well as the related sectors such as the airline and hotel industry. You’re going to have partnerships with these businesses to widen your client base.
- Executive Summary – This part is about your company, specifically the services you offer, roles, and responsibilities of the people you have in your team. You should also include here your Vision-Mission statement.
- Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis – Knowing your competitive advantage, competitors, and opportunities allows you to position your company well enough to survive whatever market rivalry and fluctuating demand.
- Market Analysis – While SWOT gives you a bird’s eye view of the car rental industry, the market analysis part of the business plan lets you take a closer look at your customers, specifically their demographics and purchasing power. You’ll also consider the market trends that may affect your operations.
- Sales and Marketing Strategy – Outline how you’re going to promote your business both to your customers and other companies that might need your service. You should also include here your pricing strategy and modes of payment.
- Publicity and Advertising Strategy – Create a plan on how to advertise your services. This may include giving out flyers and handbills, as well as your usage of social media to promote or participate events.
- Sustainability and Expansion Strategy – The last part of your business plan should be your plans for future expansions and other products or services you might want to develop and launch in the future.
The Last Step: Buy, Register and Insure Your Fleet
Once every detail of your car rental business has been laid out, the next thing to do is apply for a business registration to ensure your company is legit. Then, shop for your choice of fleet. This should not be as difficult as you initially thought because you already figured out the type of vehicle to buy based on your target market and core services to offer, which are all in your business plan. Lastly, find a full insurance coverage for your cars so that you can get help whenever you need to shoulder emergency expenses such as collision damage, loss, or personal accident. Remember, liability due to accidents can cost a hefty sum of money, which might lead you to sell off some of your properties.
Yes, starting a car rental business and make it profitable is a daunting endeavor. But if you plan it right using the insights above, rest assured that you’ll be on the right track. Just don’t forget to get expert help, such as from a business advisor and lawyer, to help you with all the details of your venture.