How to Start a Successful Fleet Rental Company
Starting a new business, regardless of the industry, is a daunting proposition. You’ve got marketing to think about, funding to obtain, inventory to purchase and customers to find. One type of company that is growing in popularity is a fleet rental model — providing heavy-duty trucks or cargo vans for customers to rent. If this sounds like the kind of business model that might make you successful, here are a few tips and tricks to help you start a fleet rental company that will stay successful for years to come.
Building From the Ground Up
While you can purchase an existing fleet rental company, it’s often more trouble than it’s worth, especially if the business that you’ve purchased doesn’t align with your business model. One way to avoid this is to build your fleet rental company from the ground up.
That includes building a business plan, securing investments or loans for working capital, finding a location and purchasing a rental fleet. It can end up more expensive than purchasing an existing business, but it allows you to build it from scratch to create the kind of business that you’ll feel proud of.
Keep Track of the Numbers
This is important for any business — keeping track of things such as income, expenses, profit and payroll is essential to running any successful business. For a fleet rental company, you’ve got a few additional things to take into consideration, including:
- Vehicle Depreciation – Once your vehicle leaves the lot, it starts to lose value. Keeping track of this can help you decide when to sell your current vehicles and upgrade to new ones. Vehicle depreciation can also get written off on your yearly taxes. While the exact depreciation depends on the year, make and model of the car, on average, most cars will lose between 35 and 50 percent of their value in the first three years.
- Mileage – Keep track of how far people drive your vehicle each time it is rented. This is another thing that can get written off on your taxes as well.
- Maintenance – Vehicles will require regular maintenance to keep them running smoothly — plus you will need to budget for unexpected breakdowns and accident repairs. Waiting on the insurance company will take your cars offline for a lot longer than you would like, so having funds budgeted for emergency repairs is a good idea.
- Fleet Data – Data like routs that are being taken, idle times due to traffic or construction, and other data points should all be recorded so they can be analyzed. This can allow you to offer new route ideas or travel plans to your customers so the fleet vehicles are spending less time idle and more time on the road.
- Return on Investment (ROI) – Starting a fleet rental company is not an inexpensive proposition, so monitoring your investments and more importantly, your ROI, can help you make decisions about the future of the company.
- Going Green – Green fleets are becoming more and more common. Utilizing green – hybrid or electric – vehicles from the get-go can reduce operating costs in the long run. It might be costlier in the beginning, but in addition to reducing your carbon footprint, many consumers will choose a green fleet over a more traditional one.
Pick the Right Vehicles
The next step is to pick the best vehicles for the job. This will depend on your location and the kind of customers that you’re trying to attract. Dodge, Mercedes, Ford, Chevy and even Nissan all offer great cargo van options with varying maximum payloads and different costs depending on your needs. Larger cargo vans offer more hauling space but sacrifice fuel mileage.
Do your research before you start purchasing or leasing vehicles. There are plenty of options available on the market today, but not all of them will meet the needs of your business.
Don’t Skip the Accessories
People rent work vehicles because they don’t have the funds to purchase their own or the necessity for those DIYers who just need a work truck for a day or two because their daily driver isn’t big enough for the job that they’re working on. That doesn’t mean they necessarily want to rent an empty van though, especially if they have tools or toys that they need to organize or secure.
Invest in toolboxes or cargo van shelves to enable your customers to organize their tools or supplies in the best way possible.
Focus on Marketing
Starting the perfect business doesn’t mean much if no one knows that you exist. Don’t spend all of your beginning capital on vehicles or store-fronts. Use some of that money to market your new business — TV, radio, newspaper, magazine advertisements, even social media are useful tools to get your business out there and start bringing in customers.
Don’t just rely on word of mouth — it’s a useful tool but it can prove difficult to get that snowball rolling. Start with traditional marketing and word of mouth will take care of itself.
Build a Successful Business
If you’re looking to start a new business, getting into fleet vehicle rentals is a great way to build a successful business, as long as you know where to start. Hopefully, these tips and tricks can help get you started.
Megan Ray Nichols
STEM Writer & Blogger
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