The car rental services are still very much in demand today. Because this is the main reason this business has very good prospects. With a large global market share, this industry is expected to reach $200 billion in the next few years. So, are you tempted on starting a car rental business anytime soon?

However, this business does require quite a large amount of capital for a startup. No worries because there are some ways you can do it with a low capital. To do it, you should know what are the steps and the key to success in starting this business!

Key Steps on Starting a Car Rental Business

Like other businesses, a car rental business must also be run in the right way. This is important, considering that there are risks and other things that need to be handled properly. Here are several strategies to consider in starting a car rental business with low capital:

A. Select a Car Rental Business Type

Before starting, you need to know what types of car rental businesses there are:

1. Franchise

With a car franchise system you need to partner with a well-known car rental service brand. One of its advantages is the ease of setting up the business and the support from a big brand. They will help you launch your business and set up franchise financing options to reduce the burden of financing costs. The disadvantages of using a franchise are that you will lose full rights of the business and may face higher costs.

2. Car Dealership

Dealership is to conduct an agreement with a car dealer to offer rentals to customers who bring their cars in for repair. Here, you don’t need a large fleet of cars to get started, which can lower your initial capital.

3. Independent Business

Starting a small independent car rental business means that you’re not tied to anyone. You are the sole owner of your business and you must be ready to face all risks single-handed.

4. Existing Car Rental Business

You may consider buying an existing car rental business when the owner wants to sell it. Here, the basic organization of the business already exists. Yet still, you should find out whether the existing business has excellent management in the past.

B. Identify Prospects and Target Market

Next, identify your prospects and target markets. For example, know the prospects for the car rental business in your chosen location. Will there be many people in the surrounding area who need a car or not? You will need to conduct surveys and do research. At the same time, identify your target market. The target markets for your business can include:

• Short-term and long-term rentals
• Travelers
• Car loaners

C. Choose a Business Operation Location

Your business operation location should be strategic and easy to access by potential customers. This is because you need a garage or warehouse to keep all the cars in one place. The location too, should be near the major roads to make it easier for people to find it.

D. Promotional Strategy

Promotion is one of the important things in any business in order to bring in potential customers. Both offline and online methods can be done. For example, use banners, distribute flyers, create a website, register your business on business websites, promote through social media, etc. You can also provide promotions through discounts for first-time customers.

E. Write a Business Plan

Your business plan should include how you will turn your business into a profitable company. The business plan should include:

• The type of car rental business you’re starting
• The products and services you will offer
• The rates or prices you will charge
• The initial capital you plan to put into the business
• How much funding you have

Basically, your marketing plan outline and financial projections should describe your future business goals. And the business plan will essentially help your business stay on track.

Ready To Become a Car Rental Business Owner?

Starting a car rental business doesn’t require special skills. If you have the desire to do business with promising prospects, then you can master this business well. The bright opportunity will certainly produce results, if this business is done the right way. With proper planning, it can bring maximum profits in the future. Apart from how to start this business, is there anything else you want to know about? Don’t hesitate to ask because everyone is here to learn. So, please leave a comment down below!