Before starting any business, it is important to write a realistic, detailed business plan that…
Important Things to Consider in Rental Car Business Plan
There are some names in the rental car industry, like Hertz and Avis Budget Group, which are recognized by most people. However, per Auto Rental News the industry includes over 5,500 independent rental car businesses that are renting an estimated 68,000 vehicles. There are many markets ready for the startup of an enterprising rental car business able to meet their needs.
Developing a car rental business requires careful planning. Will the rental agency rent economy, standard, and luxury autos and trucks? Will vehicles be rented to consumers and/or businesses? It is a highly regulated industry and highly competitive. What is the marketing plan for attracting customers? Business planning requires addressing topics like:
• Size and type of the rental fleet
• Fleet maintenance and turnover strategies
• Rental locations
• Type of revenues – rental charges, gasoline charges, insurance fees, mileage fees, etc.
• Pricing strategy
• Daily rental prices and projected commercial rental contract revenues
• Management experience in the automotive or other relevant industry
• Target market – commercial fleets, individuals, business travelers, vacationers
• State of the industry and competitive analysis – what businesses are the main competitors
• What differentiates the new company from competitors, like price or service or type of vehicles, and how the new enterprise will fill an unmet customer need
• Current and planned relationships with hotels, travel agencies, airports, convention centers, etc.
• Marketing strategies that address advertising, online access, direct sales, etc.
• Personnel costs
One of the important features of successful companies renting autos and trucks is the software that enables people to book rentals online. It must run flawlessly to satisfy customers. This detail and many others can make or break the business.
Structure Of The Rental Car Business Plan
The financial section includes projected profit and loss statements, cash flow statements, and balance sheets. Since revenues are only generated when vehicles are available, the car rental agency must invest in the right size fleet of autos and trucks, meaning the rental car business plan is critical to finding investors or for obtaining a bank loan. Investors will consider the amount of funding needed versus when they can expect to see a return on investment.
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