Car rental business plan with financial calculations
Car rental, which is so developed in the countries of Europe and America in Russia, although it came for quite a long time, has not become very popular. Nevertheless, today you can rent a car in Moscow for about $ 80 per day. At the same time, no restrictions are imposed on the service client, and he can go anywhere.
As long as there is little competition in this area, you can start your own business in this area. Moreover, the benefit is obvious - to receive money for issuing a car for a limited time use. But in order not to go bankrupt for the car rental business, you should draw up a detailed business plan and provide for some controversial points.
Car rental in Russia is not very popular yet. Cars are ordered mainly for weddings or similar events, while in Europe such services are used mainly by tourists who want to see the main attractions in a few days without restrictions.
In total, about 40 thousand cars are rented in Russia, with more than 60% of the market concentrated in Moscow and St. Petersburg.
There is not a lot of statistics on this area of business. According to available information, less than 30 thousand cars were leased in 2021, of which 76% were rented in St. Petersburg or Moscow. The total market volume then left 21.8 billion rubles. At the same time, individuals rented cars only in 16% of cases.
According to statistics published by Rossiyskaya Gazeta several years ago, the reasons for renting a car are as follows:
- temporary absence of own car - 43% of cases;
- rest - 21%;
- for service - 14%; li >
- ease of movement around the city - 6%;
- willingness to try a car before buying - 6%;
- others - 10%.
According to experts, such a business area as car rental in Russia is still underdeveloped simply because the population is not aware of the possibility of using this service. Therefore, for the business to really start generating income, you need to take care of a high-quality advertising campaign.
Benefits of a car rental business
Despite the small demand without additional customer motivation, there are clear advantages to the car rental business:
BizplaniKo offers services for the development of a business plan for a car rental and rental company with financial calculations and a presentation to attract investments. On our website, you can order a service, familiarize yourself with our experience and customer reviews, and download a ready-made business plan template for opening a car rental from scratch.
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That is why there is a need to popularize car rental, which is still used by a rather narrow circle of consumers.
Car rental as a business with good incomes can develop only if we take into account all the participants in the car rental market, and also find out the features of the services that are provided.
Companies in this area can be divided into the following main groups:
- representatives of the world leaders in car rental, which have a fairly large-scale vehicle fleet;
- domestic companies with a fleet of at least 50 cars;
- small firms with a small fleet of vehicles (no more than 20 cars);
- companies that offer rental of vintage cars and exclusive brands for organizing various celebrations, weddings, festivals.
What investments do you need to make?
The car rental business is quite costly. Thus, an entrepreneur must have at least ten vehicles that could be rented out. A good option for people who are unable to purchase vehicles for their own funds is to lease them, paying at the first stage up to 30% of the total cost.
It should be noted that CASCO insurance for each car requires significant costs, as well as the rental of premises where cars will be located. Some money will have to be invested in good advertising, which will help find potential customers, since the car rental business is quite new. So, some people can constantly drive a rented car, while others are just trying to save money for their own car, without even thinking to use a car for rent.
Despite large investments, the profitability of this business is very high - according to statistics, the payback period is only 1-2 years. It should be noted that this business (car rental) requires careful planning to develop effectively.
Customer base definition
To optimally provide services in this area, you need to know who most often takes a car for rent. I must say that even renting a domestic car is quite expensive - $ 18-30 per day. This means that the clients of companies that specialize in car rental should be people with sufficient income. But, as a rule, they have their own car, sometimes not one.
Why do people still use such services? Most often, car rental clients are those who have their own car, but for a number of reasons it is not possible to use it. Unlike foreigners, our citizens are not yet accustomed to renting a car while in a foreign city, therefore, as a rule, clients are local residents and people living in remote areas. 20% of them are people who decided to rent a car for entertainment or travel purposes.
Another group of consumers is people who take a car for a short period (for example, for a day in order to appear at a business meeting in a new car). We shouldn't forget about corporate clients either.
Reviews for car rental business plan ()
The main thing about the business plan of car rental in the year
Opening car rental in numbers
Starting a car rental business is, first of all, huge costs. And entrepreneurs planning to officially open a car rental company are trying to determine the amount that may be required for these purposes. The amount of costs depends on which way the businessman will go - whether he will act independently, or decide to purchase a franchise. At the moment, franchises of several well-known Western car rental companies can be purchased on the Russian market.
Which path to choose depends not only on the financial capabilities of the entrepreneur, but also on the situation in this market in a particular region. If, for example, there are already a couple of companies operating under the wing of a well-known western brand in your city, it may be more expedient to organize a car rental business on your own.
The cost of a franchise is usually about 25-30 thousand dollars, in addition, the company will have to transfer a certain percentage of orders to the partner every month. But in this case, the businessman will not need additional advertising costs.
The minimum amount required to open a car rental company on your own is 5 million rubles. The main item of expenses is the purchase of cars. Most entrepreneurs prefer foreign cars, since the maintenance of domestic cars is much more expensive, and they break down much more often. As for the choice of model, many businessmen working in this sector of the market, at first, purchase cars of the same brand. This allows you to count on a substantial discount when purchasing.
When opening a car rental business, an entrepreneur needs to purchase at least 10-12 cars. Only in this case it is possible to avoid losses in the course of the company's activity. Too large vehicle fleet is also not advisable, since it will be much more difficult to find the required number of customers. In addition, car maintenance is costly, and the more cars a company has, the higher the costs. Each car must be insured, and the cost of the policy will average about 10% of its price. The approximate cost of servicing one car does not usually exceed 3-4 thousand rubles per month. When starting a car rental business, be sure to consider the associated costs such as buying tires, renting parking spaces, etc.
Such a business project as car rental requires substantial expenses, and, of course, any entrepreneur does not want to throw money away. The initial investment usually pays off in 2-3 years, when it is time to change the vehicle fleet. If you want to know clearly how a car rental business works, check out the professional example of a car rental business plan with ready-made calculations. A comprehensive car rental business guide will enable you to close your knowledge gaps. You will understand how to start a business such as car rental and find out if it is worth creating a website that will offer car rental services.
Organization of car rental: we go to the regions
Car rental business is a risky business. A small number of companies operate in this market, and on the one hand, this allows entrepreneurs to easily occupy an empty niche. But the problem is that such services in our country are not yet in high demand. The consumer must be taught to such an opportunity - to rent a car. As a type of business, this activity is advisable only in large cities, or in a tourist area where there are a lot of visitors.
In most settlements, this service began to appear only 2-3 years ago. So the opportunities for businessmen who have decided to master this market sector are very tempting. No competition, which sometimes gets in the way of aspiring entrepreneurs. But this will not diminish the difficulties with finding clients. The usual methods of advertising must be carefully reviewed, because mainly foreigners - guests of the city, business travelers, tourists - will contact your company. And you need to make sure that they can quickly find out about your services.
How to start your own business so that it brings a stable income? First of all, it is necessary to study the needs of the market and the demand for a particular service or product. If you live in a resort area or in your city there are historical sites, business centers that attract tourists and business travelers, then you should consider options on how to open a car rental, properly organize an enterprise so that it becomes profitable.
Where to start your own business?
The demand for car rental is explained by the fact that in this way visitors can save on taxis and get freedom of movement. According to statistics, the majority of consumers (seventy percent) are people who have arrived from other cities or countries, and 30% are local residents. The service is very popular, especially in summer.
At the beginning of the activity, a business plan for car rental is developed, in which it is necessary to take into account the experience of such organizations, their advantages and disadvantages. After that, your own business must be formalized as a legal entity. A suitable form is a limited liability company. Further - registration with the tax authorities. Then you need to choose and rent a room where the company office, garage and parking will be located.
The cost of registering a company is two hundred and fifty dollars, for renting an office you will have to pay an amount from six hundred to seven hundred dollars. Cash investments will be required for the purchase of a car park and garage premises. In addition, all vehicles must be insured (for example, in case of an accident).
The car rental business plan should include the organization of its own repair base for equipment depreciation. You will definitely have to pay taxes, pay salaries to employees. In total, expenses can be one and a half percent of the total income. You can apply for a bank loan as a start-up capital when starting a business. The main costs of starting a business include investments in advertising.
You need to start promoting a company at the same time as its registration, so that by the time it functions, you have a potential client base. Information can be placed in newspapers where free classifieds are published, on Internet sites, on television. Visual advertising on city streets also helps to attract customers. Investments in promoting a business can be about three thousand dollars.
Unforeseen expenses are also included in the car rental business plan. These include, for example, equipping cars with satellite systems, which track their location. You can organize the business in another way - to purchase a franchise. Then you don't need to promote the project. After all, you will work under the name of an already well-known company.
But the right to use its name will have to pay a large sum, it can range from eight hundred and ten to one million two hundred and twenty thousand rubles. In addition, such an approach will deprive you of the opportunity to act the way you want it, and you will need to obey corporate rules. For using the brand, you will have to pay ten percent of the profit every month.