The car rental business is so competitive but also a lucrative one. A car rental business is the one that rents cars at an affordable price on an hourly, daily and also weekly basis. The customers for the car rental business mostly are travelers and business people.
Before moving further into the steps of building your own car rental business, let’s have a look at the growth and revenue.
It is important to do a complete market analysis for any business you are in which will give you a better understanding of planning the strategies for your business.
According to Statista, the revenue in the car rental business amounts to US$ 94,764 m in 2020. Also, it is expected that it will amount to almost 108,987 m US$ by 2024. Hence it is proved that the car rental business is surely one of the most successful business ideas for an entrepreneur.
Isn’t it amazing? Keeping it aside, let’s have a look at the steps to start your own car rental business and be successful.
1. Make a business plan
Planning is everything for an entrepreneur to succeed in their journey. So, before making any decision, sit back and spend some time planning out your business venture. Like,
- Startup cost and other expenses
- Target market
- Revenue model
- What is your unique selling point?
- Business name
- Legal formalities, etc.
2. Research about your venture location
If you are about to start your local car rental business, then the important factor you should consider is where you are going to build your business.
Do complete research on your area. Get all the information about the car rental businesses out there in your area. And make a decision where you can locate your business.
It is super cool if you place your business near hot spots like tourist areas or airports, etc.
3. Choose the type of rental.
There are two types of car rentals available, you have to choose wisely among them. The duo are contract-based long term rentals and daily hire rentals.
In contract-based rentals, you will rent out a car for a monthly or even long term basis. Basically, in long term rentals, you deal with businesses. Whereas short term rentals are individuals who need cars for some time. It depends on your choice to choose between these two.
4. Build a fleet of cars for your business.
This is the most important step in building your car rental business. I don’t recommend that you should immediately buy 6 to 10 cars in the first step.
Start simple as you can consider having 3 to 4 cars in the initial stage. But your fleet should be well maintained with proper functionalities to get the income you expected.
5. Consider purchasing insurance for your fleet.
It is necessary to have your fleet insured. Insurance policies may protect your business in case of emergencies. Go for policy which includes both collision and liability protection for your cars.
Check out this article on insurance for car rental businesses, to know more about the policies and their benefits.
6. Get a business license
Apply for the business license at your nearest state or federal agency. They ask you a few things about your business like the name of your business, type of business, employee count, etc. Fill out the application and submit it. It may vary depending on the region you are in. Without the license, you may not be able to start the business. So make sure you get it.
7. Fleet maintenance
Hire mechanics to maintain your fleet because if your fleet is not well maintained then you may see a drop in your business profit. So hire experienced professionals to get extra help as they may even tell you whether the car should be replaced or repaired based on its condition.
8. Build a website and mobile application for your business
Everything’s digital now, hence adapting the change may help you get a steady flow of customers to your business. Customers love to book the car through the internet before they even travel. So give your customers the freedom to book the car on your own site.
If you find it hard to build a website or software on your own, don’t worry. There are a lot of car rental software available in the market to choose from. But it is important to choose the best car rental script for your business.
You can buy the software and customize it if you are aware of the rules of coding. It is so simple as you can do it on your own with a little bit of help from the software development company.
9. Marketing strategy
There are two types of marketing strategies you can follow, online and offline marketing.
- Online marketing – According to a report from statista.com, the number of internet users is around 4.54 billion in 2020. This made online marketing a preferred stream to market your business. Online marketing includes Social media presence, Search engine marketing, and optimization, content marketing, email marketing and lot more.
- Offline marketing – Offline marketing is also an important part of marketing. It includes print media advertising, flyers, event speaking, cold calling, sponsoring events, etc.
Often you can get the expected market outcome if you combine these two marketing strategies.
We’ve seen already in the above sections that building your own car rental app or software can help you grow better. Let’s discuss how car rental apps benefit your business in this bonus tip.
What is a car rental app or software?
Car rental software is a web-based solution that helps the car rental business owners to manage the bookings, fleet management, listings and also be in touch with the customers at ease.
How car rental apps work?
The car rental app acts as an intermediate between the customer and the business owner/driver. It allows the customer to scroll through the list of cars and book the preferred car effortlessly.
Much needed features your car rental app should have.
Features are the important factor to consider when you are about to buy and customize the car rental app.
Let’s have a look at the few best features of car rental app that you may consider buying,
- Advanced search filters
- Managing listings
- Reservations management
- Seasonal pricing
- Safe payment gateway like stripe
- Multiple login options
- Multi-language and currency option
- Ratings and Reviews
- Service fee management
- Document verification
Here you are to the very last part of this guide to start your own car rental business. I hope you got some idea out of this. By hoping so let me recommend the best car booking script for the best of your business, RentALL Cars – A best in class car rental script to get you going.