When compiling a car rental business plan, it is necessary to estimate the costs of its implementation in advance.
To begin with, it is worth deciding on the number of vehicles that will be used in the project, and their brand. According to experts, the optimal number of cars is 25-30 pieces of different classes.
The profitability of the project can reach 25% with a transport load of 70%
Promotion of car rental business
Your car rental business plan should definitely include advertising costs. Without it, getting good income is unlikely.
You can use:
- ads on websites
there are a lot of options. But saving on advertising means, especially given the huge competition in this area of business, is not worth much.
The most profitable solution is considered to be a long-term lease for corporate clients. Focus on the fact that in the summer days your profit will grow, in the winter season it will decrease.
You can read more about increasing sales in the article: “ Business idea: car rental ”.
Investment costs for the purchase of cars
First you need to decide:
is it worth buying or renting cars?
According to experienced players in the car rental market, vehicle leasing is the best solution. In the case of buying a car, you «freeze» your money. By leasing a car, you can conclude a lease agreement with the right to purchase at the end of the lease term. As a result, the car will become your property, but you can pay the money in installments.
Initially, the business plan can provide for payment of only 20-30% of the redemption price of cars. Further repayment of the debt is made in installments as the vehicle is used. The term of the lease agreement can be from 1-3 years.
Income and expenses of the car rental project
The minimum turnover required to reach the break-even point of the project is $120,000 per month. It takes about 4-5 years to recoup all initial investments.
Current expenses include:
- parking and office rent — about 40-50 thousand dollars a month;
- wages — the company’s staff should include a security worker, technical staff, a manager and an accountant. The salary of these employees will be about 100 thousand dollars every month;
- Fuel and lubricants is another significant item of expenditure.
Before implementing a car rental project, it is better to calculate its payback. In order to calculate the payback of your business idea, you can follow this link:
What should be taken into account when implementing a project?
It is necessary to abandon attempts to save on car maintenance. Their simple — loss of income. Do not forget that the machines will need to be regularly checked for the presence / absence of faults.
Washing cars — their cleanliness is an important factor for ensuring a decent appearance and presentation of cars. Therefore, it is necessary to regularly spend money on washing, dry cleaning of the interior, etc.
A few tips on how to set up a car rental business: