By living in a busy metropolitan area, people can already tell how a car rental business can be a very competitive industry that can be quite lucrative. Many travellers find it more convenient to rent a car whenever there’s an upcoming business trip or a family vacation. It is also practical to rent a car for some people with vehicles that are currently under repair for a specific period of time. The coming to light of this business plus the visible increase in consumer demands are only traces of its success which is why many entrepreneurs are motivated to look for a franchise or start up their own rental company.
If you’re into vehicles and looking for a profitable business, it’s not bad to enter the competitive world of car rentals. But for starters to put up this kind of business, they must follow a business model that will guide them through the whole process. Consider the following steps to making your dream car rental business come true:
Conduct market research in your target area.
Before you choose your target location, it is imperative to find out initially where all the other rental companies are situated. It could be in go-to places with potential high rate of consumer demands such as airports, shopping malls and other tourist spots. The car rental business can be competitive, so you must know how to gain the upper hand in the competition. Learn what the customers need and want from this kind of service. You can start surveying people and other businesses to decide who would be the target consumers that will benefit from the service you are to provide.
Choose your type of car rental service.
There are two types of car rental startup operation and it is important that you know which type to focus and capitalise on. As a startup business, you can choose between a contract hire or a daily hire. Providing vehicles for contract hire is for customers who want to lease the vehicle for long-term use, which usually takes a couple of days or weeks. Daily hire, on the other hand, involves renting out your vehicles often to individuals for a short period of time.
If you have a fair capital for this business, considering a franchise business such as a well-known car rental service provider. Many customers would often choose to rent with a well-known brand without taking much time to compare the pros and cons of choosing branded services over independent ones. That gives you a great opportunity to capitalise if you opt for retailing rather than putting up your own independent business. Franchising would likely take a few application with less paperwork and money. The company will help you settle the paperwork and provide you with their vehicles with relevant car accessories (GPS Monitoring device) and the brand name that you have to pay for every year.
Purchase existing business.
And here’s another option to take if you want to escape the hassle of shopping around fleets of vehicles and looking for an ideal business location. However, purchasing an existing business may require more research as you have to determine if the existing location can make you capitalise on the market.
Apply for car insurance.
The last step would be shopping around for a comprehensive insurance policy that will provide your business with collision and liability protection due to accidents. Make sure that the policy coverage includes your customers so they can avoid liability but they have extra for their coverage. Also note that in some states, it is illegal to trade a fleet service with no provided insurance policy for vehicles.