Starting a business seems like a daunting prospect if you’ve never done it before. Luckily, plenty of other entrepreneurs have done this, and you can benefit from their wisdom gained from successes and lessons learned from mistakes. This guide on how to start a buggy car rental business will help you with everything from validating your money-making idea to figuring out how to deal with unpredictable hardships in the industry. We will also tell you where to source cheap buggies from.
Table of Contents
Is it wise to start a buggy car rental business?
Getting started
Write a business plan
Secure finances
Create a rental contract
Build a team
Service provision
Points to note
Is it wise to start a buggy car rental business?
A straightforward answer is YES! It is perfectly ok to start a buggy car rental business. Here are some mind-blowing facts.
The global car rental business is expected to hit the 116.6 billion USD mark in 2026 from 81.3 billion USD in 2022. This is at a projected CAGR of 9.4% from 2022 to 2026. With an industry growing at a staggering rate of almost 10% annually, it is openly presenting multiple opportunities to venture in. One of them is the buggy car rental service which is largely untapped.
The car industry is over 100 years old and dates back to 1906, when the first car rental industry, Sixt, was founded. Other than writing history, learning from decades-old companies gives you insight into how to manage your business.
The rental car industry is not flooded. Only a few major industries, like Enterprise Holdings, control over 90% of the market. Enterprise owns a fleet of over 1.8 million cars, SUVs, and trucks in over 6000 locations globally. While Enterprise seems like an unbeatable adversary, you can invest in unexplored market niches like buggy car rental.
Here is how to start a buggy car rental business.
Getting started
First, you’ll need a fleet of vehicles. You can either purchase these outright or lease them from a car dealership. But, because as you launch a business, demand is usually low, start with one or two buggies that are cheaply available on wholesale. Gradually increase and diversify the fleet according to consumer needs.
Next, you’ll need to secure insurance for assets and employees. Car insurance is calculated according to the driver’s history, the purpose of the vehicle, and the risk of accidents; there is no straightforward formula to calculate the premium. But it is important to insure a buggy because the future is always uncertain.
Employee health and life insurance are mandatory. Plan on how you will take care of such costs.
Third, you’ll need to find a location for your business to set up a shop. With the internet era in full bloom, you don’t need to worry about brick-and-mortar shops. Create a website and use it to reach out to customers. After all, all major companies have online booking portals. Why not bring your business closer to customers with the internet?
Finally, you’ll need to market your business and attract customers. This is the most complex task any business must deal with to record profits. Marketing starts by telling a friend to tell a friend, targeted ads, email campaigns, and partnering with vacationing companies. The latter is very useful because tourists are major off-road buggy car customers.
Write a business plan
Now that you have a clue about what a car rental business is, you need to write a comprehensive business plan. A business plan is basically a document with a clear road map on how you will achieve your objectives. It includes your marketing, financial and operational plans that will help you achieve overall objectives, be it increasing your presence, revenue or customers.
Note that, being a crucial document, ensure your business plan is as detailed as possible and avoid generic information. Also, remember to consult experts whenever you are stuck.
Secure finances
Money is the biggest problem for any start-up. If you are not careful, it may bring your project to a screeching halt. To be on the safer side, plan before you invest.
Basically, a small buggy car rental business will cost you around 20k USD, including two 500cc sand rails from Alibaba.com. The remaining portion will be distributed into:
- Certificate of incorporation- 50 to 800 USD
- Small business insurance fee- 800 to 2500 USD
- Licenses- 500 to 700 USD
- Website- 500 USD
- Booking system -2000 USD
- Legal fees- 500-3000 USD
This is a rough overview of what you should expect, but remember, these costs are subject to scrutiny depending on your jurisdiction.
If you have not saved enough to launch a business, you can request start-up loans, present your idea to prospective investors, or partner with friends.
Create a rental contract
A rental contract is an agreement between your business and a customer on certain terms. It highlights who is responsible for what. For example, it will explain to customers their liabilities in case of an accident.
To be on the safe side and have total assurance the contract is protecting your business and at the same time not violating customers’ rights, work with an experienced car rental attorney.
Build a team
Employees are crucial to any business as finances are. Motivated and experienced employees will sacrifice everything for your success, so find the right human resources. In the early days, hire one or two employees to help you out in receiving calls and managing customers, organizing your finances, and washing and repairing buggies.
Though it may be impossible to find someone who is 100% suitable for the job, learn how to train and coach employees, and over time, your efforts will pay off.
Service provision
Just when you think everything is done, you have one more step. Excellent customer services build long-lasting relationships. Strive to leave behind a mark not only in the local community but also in the minds of one-time visitors.
Points to note
A buggy car rental business is a unique venture which can earn you modest profits. What separates you from such profits is launching a business. Start by researching the car rental business, bring your finances in place, and write a comprehensive business plan. Also, reach out to as many people as you can to market your business.
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