It’s not always easy to know where to go for ideas and help when starting up a new business. If you are looking to find out how to start a car rental business then don’t look any further, we have put together a guide for you to follow.
Having your car rental business plan prepared is very important. It will not only help you in planning it will also help you evaluate your business in regards to what is going well and what is not, the business plan can also help you in raising funds. You can search for car rental business plan on the internet for help and templates. You can adopt these to help you start compiling your own plan.
Your car rental business plan should cover all the key aspects of your car rental business including you your financial forecast for the upcoming year. You need to provide an executive summary of the business. If it is a new business, it is important you make it known in the business plan. If it is an existing car rental business possibly seeking for funds in order to expand the business, you need to give a financial highlight of the business. You also need to let people know how you wish to apply the funds.
In your car rental business plan, you will need to supply information about the key management personnel of the business, operations, sales and marketing and the financial projections of the car rental business.
Consider the options available:
The first thing to consider when starting a car rental business is the type of car rental you intend to operate. You will have to know the types available – The two main types are contract hire (where customers - typically businesses, lease vehicles for a set time), or daily hire (where customers – typically individuals, hire vehicles for a shorter period of time).
Your fleet of cars:
The two options are outright purchase or leasing. You do not have to start with a large fleet of cars, but the greater your fleet the greater your earnings. The cars have to be well maintained, so that you can enjoy a high turnover. You could decide to contract the maintenance out, or hire your own maintenance staff, which could prove more expensive for your start-up business initially.
Knowledge about your fleet of cars and customers:
When considering how to start a rental car business, two things are extremely important: knowing your fleet of cars and your car rental customers.
If your customers perceive that a used car in good condition is fairly good, you can give it a try. Secondly, always keep the rate in check to position yourself as competitive and fair priced in the market
Like any business (unless you’re solely online based) you will have to think about location for your car rental business. Firstly do some research on the type of market available in your area, it is beneficial to find out as much as you can about your competition.
For independent start-ups you will need to develop your Unique Selling Point. National operators like Hertz and Avis can hire vehicles out cheaply, so what is it that will be different about your car rental business that will attract customers and build up a following?
Great options for considering location are near airports, hotels and train stations. Be mindful of your location security, it’s not a bad idea to invest in CCTV cameras and alarm systems.
It’s worth shopping around to find adequate cover at the best price. Starting a car rental business without proper and adequate insurance is risky. Insurance may seem like additional costs, but it is always advisable you take full comprehensive insurance for all the cars.
Apart from your own car rental insurance premium which you will need to pay to your insurance broker, you can also choose to sell insurance to your customers too. That is, you can offer cars rental inclusive or exclusive of insurance. Major popular car rental insurance policies include collision damage waiver/loss damage waiver, supplementary liability insurance, personal accident insurance and personal effects coverage.
Managing your daily operation:
Manual systems can leave you liable for inefficiency, with lost time and often lost paperwork. It can quickly become confusing what vehicles are due out and in, and managing your invoices is often a nightmare. To boost your efficiency and steer clear from these pitfalls, it’s vital that you invest in fleet management software.
Fleet management software is computer software that enables people to accomplish a series of specific tasks in the management of any or all aspects relating to a fleet of vehicles operated by a company, government, or other organisation. These specific tasks encompass all operations from vehicle acquisition through maintenance to disposal.
This is an absolute must if you. If you want to make your car rental business company to appear more professional and wish to receive a decent flow of business you will need to create a website. With this, clients seeking for car rental services can easily locate you on the internet. A website will allow people to do this 24/7, effectively extending your opening hours. Also, you should not underplay the role of advertisement. Car rental companies are all over the internet with their various advertisements. You must have come across some adverts like “cheap car rentals”, “cheap rental cars” or “cheap car rentals near me”. These are what people are looking for. No matter how SEO friendly your website may be, these advertisements will always come up first in any search engine results. The simple fact of the matter, especially for new start-ups wanting to establish themselves, is this: If you don’t have a website, potential customers will go with someone who does.
Thinking of starting a car rental business? Find out more about our car rental business course.