Those who would like to start their own business and are passionate about cars, their maintenance and driving have probably contemplated the idea of starting a car rental business. If you’re one of these people, there are several things you need to know and some conditions that have to be met if you want your idea to succeed. Let’s take a look at them.
Are you the right person?
If you know little or nothing about cars, this is probably not the best business idea. No matter how big a budget you have and how sound your business plan is, chances are you won’t get very far unless you have a penchant for cars. You have to know what is happening in the car industry and the current situation on the market so that you can predict trends. Those not interested in this field simply can’t keep up with all the developments.
What does the job entail?
In a nutshell, you’ll need to make decisions about your fleet, research new vehicles, create marketing strategies, organize car maintenance service, delegate work and constantly try to find new customers. Needless to say, you’ll also have to make sure you conduct your business in accordance with all applicable laws.
Who is your target?
The best-case scenario includes finding a local business that needs numerous car rentals for their employees. You’d need to make certain concessions in terms of the rental price, but with a long-term contract, you’d be able to create a solid basis for future growth. Also, you should focus on business travellers who can afford spending a considerable amount of money on car rental.
How much can your business grow?
This is one of the key questions you need to ask yourself. Unfortunately, there is no straightforward answer. It depends on your location, the quality of your fleet and your marketing strategy, to name just some of the most important elements. Naturally, you need to be located in an area with a lot of business travellers, companies looking for your service and as few competitors as possible.
What skills and knowledge are vital?
Like with any other business, you need to know what your customers desire and need and respond appropriately. You have to know what is happening in the car industry (check out these tyre innovations you won’t believe, for instance) and find a way to customers. So, a combination of business shrewdness and extensive knowledge is a must.
How much does it cost?
Your initial expenditure will be significant, there is no question about that. You’ll need to obtain a fleet of vehicles, rent an office and purchase computers, printers etc. You also need to get insurance for the business and the fleet, have a well-organised maintenance service and provide salaries for your employees.
What else is involved?
You need a business plan for your business. Also, make sure you form a legal entity so that you’re not personally liable if your business is sued. Other requirements include registering for taxes, opening a business bank account, as well as obtaining all necessary permits and licences.
How important is online presence?
In today’s world, it’s one of the things you have to pay great attention to. Not only do you need to have a functional and user-friendly website, but you also have to take advantage of all social media platforms and make sure you respond to queries instantly. That will help you raise awareness of your brand and stand out among similar businesses.
How to promote your business?
You need to advertise across a number of different mediums, so don’t neglect print advertising, such as brochures, flyers and ads in magazines and newspapers. Also, try to establish contacts with local businesses, government agencies and corporations to increase your chances of securing new clients. Don’t forget local hotels where business travellers stay, since they can be a great source of customers.
How to secure returning customers?
Basically, you need to keep providing excellent service and products at prices people are happy to pay. Also, keep an eye on what your competitors are doing and make sure you provide more for the same money or the same for less money. Your fleet is definitely the most important, so have a range of vehicles available and reward returning customers with a discount or an upgrade if possible.
How to boost profits?
One of the problems you’ll have to deal with is the fact that cars go out of fashion, which means you’ll have to get rid of old ones in favour of brand new models. You can either sell your old vehicles or trade them in, depending on the deal you can get from your local car dealership. Remember that clients want both reliable and fashionable vehicles from a car rental company.
Starting a car rental business means you are entering a market that may already be saturated. That’s why it’s very important you don’t make any mistakes at the beginning of your project. If you manage to establish a successful company, your next step will be to make it grow, but you’ll cross that bridge when you come to it.