Recently, an entrepreneur was discussing a new car rental business started in which he coordinated the rental of privately owned vehicles. Operating at various airports, this innovative business model meant he did not have to own or rent a fleet of cars and trucks. This is just one example of the creative and competitive approaches that can be applied to traditional businesses. During business planning, it is important to identify what will be offered to the marketplace that is different from what the competition is already supplying. It might be the type of vehicles available for rent, more lenient rental terms, price, location, or in the example provided, lower prices combined with a unique source of vehicles.
The vehicle rental industry is very competitive.
Since it is likely that startups will need an infusion of capital through traditional financing or private investments, business planning needs to carefully cover all aspects of managing marketing, sales, and operations.
• Identify the source of vehicles, which might be a fleet rented under contract from a car and truck dealer or straight purchases
• Rental locations, i.e. airports, hotels, retail centers, brick-and-mortar business, car dealerships, website, or any combination
• Location of lots where unrented vehicles are stored, whether property is leased or owned, and the terms of the lease contracts or purchase agreement
• The plan for routine vehicle maintenance and replacement
• Rental locations within cities, states, and/or countries
• Insurance agency providing appropriate liability insurance for businesses and rental customers
• Rental rate schedule, taking into account seasonal fluctuations
• Software program that will be used for rental processing and management, including calculating quotes, accepting reservations, identifying vehicle preferences, processing insurance coverage requests, accepting payments, and maintaining vehicle inventory
• Required personnel to manage office functions, customer service requests, rentals, accounting, etc.
• Terms of customer rental contracts
• Target market, i.e. business fleet rentals, travelers, vehicle repair or insurance customers, hotel guests, etc.
In some cases the business owner may decide it is simplest to purchase a franchise. In that case, the financial information will include the franchise purchase price, required cash investment, and financing arrangements. Most franchise agreements include a marketing analysis, training and development, and ongoing marketing assistance. Whether buying a franchise or starting an independent auto rental business, the business plan needs a clear statement of mission and objectives, business description, thorough analysis of the target market, sales plan, a financial plan, operating plan, and a description of relevant management experience and expertise.
Need help with developing a car rental business plan? OGS Capital (https://www.ogscapital.com/) has a team of consultants prepared to advise business owners every step of the way. Simply complete the online contact form to get the process started.
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