This car rental business plan sample is focused on the flourishing car rental industry in San Antonio, Texas. Factors including the rise in on-demand transportation services and low rate of car ownership among millennials propel the growth of the car rental industry. Our car rental business plan writers created this sample.
Executive Summary
Allrounder Rentals (“Allrounder”) was registered in the town of Monte Vista in December 2020. Since that time, the company has experienced strong growth due to increasing market demand for Allrounder’s exotic vehicle rentals.
With limited competition, low inventory for seasonal exotic vehicle rentals in the local marketplace, and increased market demand, Allrounder is now seeking funding of $250,000 through the Small Business Administration to expand its San Antonio operations with the addition of two new vehicles – namely a 2020 Lamborghini Urus Super Sport Utility Vehicle (SUV) and a 2020 Mercedes GLE SUV. The addition of these vehicles to Allrounder’s existing fleet of luxury automobiles will help the company satisfy the growing demand for deluxe car rentals in the local market, particularly in the off-season when other luxury vehicles are rendered inoperable.
Secondary to fleet expansion, the company is also exploring opportunities for exotic car rentals in other promising prospective regional markets in San Antonio, Texas and/or Houston, TX.
Business Overview
Allrounder Rentals (“Allrounder”) was founded by Mr. Keith Johnson in December 2020 to provide business professionals and auto enthusiasts alike “the car of their dreams” through exotic vehicle rentals in San Antonio, Texas, and surrounding areas. The company offers competitively priced rentals of its 2016 Maserati Ghibli and 2016 BMW 328i sedans and, recognizing opportunity in a relatively untapped off-season exotic vehicle rental market, added a luxury 2017 Maserati Levante SUV to satisfy client demand for year-round rentals.
Allrounder is in the operational stage of its development and is actively generating revenue. In approximately six months since the start of operations, Allrounder has made +/-$47,000 in sales and estimates this number could have been much higher if not for the global pandemic. As four of these months occurred during the off-season, the company anticipates increased revenue in peak summer season and annual growth between 20% to 30% over the next three years.
Market Analysis
The exotic vehicle rental industry stands apart from the traditional car rental industry as it principally caters to individuals who seek to rent luxury vehicles out of desire for a driving experience rather than from necessity for transportation. With the traditional car rental industry, the majority of sales are derived from travelers requiring transportation options, whereas the exotic vehicle rental industry derives the majority of its sales from local customers wishing to drive exotic vehicles for the experience or status without having to make a large capital investment.
The exotic vehicle rental industry combines the prestige of limousine hire-car services with the convenience of unlimited vehicle access, all while providing an incredible driving experience for the customer. This combination holds the most appeal to young professionals who have a passion for driving luxury vehicles but may not have the means to make an outright purchase.
In the northern regions of North America, the exotic car rental industry is traditionally seasonal and reaches its peak in the summer months when operating conditions are ideally suited to the high-performance nature of the vehicles.
The genesis for the exotic vehicle rental industry can be attributed to a combination of five key elements: experience, style, technology, selection, and convenience. As noted in the “Top 5 Trends in Luxury Car Rentals” (www.autoeruope.ca/travel-blog/top-5-trends-in-luxury-car-rentals), “prestige vehicles are the physical manifestation of elevated status and enhance the pleasures of driving”, and this appeals to customers who seek the experience, style, technology, selection and convenience that the exotic vehicle rental industry offers.
Mission Statement
The founding of Allrounder was inspired by Mr. Keith Johnson’s vision to make car enthusiasts’ dreams of driving exotic vehicles come true while still serving the local community with the best value possible. Mr. Johnson’s desire to invest in and grow a business independently from others combined with his philosophy of endless perseverance and passion for luxury vehicles to create a successful “skies no limit” exotic vehicle rental company that serves both himself and his clients.
Goals and Objectives
With the successful application for funding, Allrounder intends to purchase two additional vehicles – namely a 2020 Lamborghini Urus Super Sport Utility Vehicle (SUV) and a 2020 Mercedes GLE SUV – to expand its current fleet and keep up with increasing demand for off-season exotic vehicle rentals in San Antonio. These vehicles will be purchased directly from the respective dealerships.
Further, Allrounder is exploring options to expand to other regional markets such as San Antonio, Texas or Houston, Texas as demand for luxury vehicles increases and business operations allow.
Key Success Factors
Allrounder defines success through three main categories – topline sales revenue, retention of loyal customers, and seasonal growth opportunities – as outlined below:
Topline sales revenue: The ability for Allrounder to steadily grow its topline sales revenue will be a strong indicator of success as increased sales translate directly to increased profit due to the company’s relatively fixed operating costs.
Customer retention: Allrounder believes that retaining existing customers will be a large contributor to its success, not only for the repeat business from loyal customers but as a critical channel to obtain new client referrals. A repeat customer is a satisfied customer, and satisfied customers form the base from which the company can grow.
Seasonal growth opportunities: With the approval of its funding application, Allrounder will be able to accelerate its success through the addition of all-season luxury vehicles to take advantage of the relatively untapped winter exotic rental season. This will provide Allrounder with an even greater competitive advantage over the limited seasonal rental offerings of other exotic car rental companies in the region.
Products & Services
Allrounder currently offers three luxury vehicles for short or long-term rentals as follows:
- 2016 Maserati Ghibli Sedan rental offered at $250 per day.
- 2017 Maserati Levante SUV rental offered at $450 per day.
- 2016 BMW 328i Sedan rental offered at $150 per day.
In addition to the above, Allrounder offers client promotions to entice longer rental periods, such as two days of free vehicle rental when customers book for five days (for a seven-day total rental) or one week of free vehicle rental when customers book for a month (for a five-week total rental).
After the successful purchase of the two fleet additions mentioned previously, the 2020 Mercedes GLE SUV will be offered at a rate of $200 per day, and the 2020 Lamborghini Urus Super Sport Utility Vehicle (SUV) will be offered at a rate between $1,000 to $1,500 per day.
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Operational Plan
Allrounder is in the operational stage of its development and has been actively generating revenue since late 2020. Standard business hours are 8am to 8pm Monday through Friday, and 9am to 5pm on weekends.
Customers can either pick up and return rental vehicles at the main base of operations (at the location listed below), or cars can be personally delivered to and/or picked up from the customer’s selected address. Clients are expected to provide their own insurance and Allrounder conducts background checks on all customers prior to rental.
Allrounder requires a $15,000 security deposit for each rental to be made by VISA credit card, electronic funds transfer, debit transaction or cash. Customers are given flexible payment options and are invoiced in arrears with Net 30 days terms, also to be paid by VISA credit card, electronic funds transfer, debit transaction or cash.
Allrounder regularly reaches approximately 85% of fleet booking capacity on a monthly basis, with an average rental period of three days. To maintain the vehicles in pristine condition and retaining a high asset value, rental mileage is limited to 1,000 kms per week or 5,000kms per month.
Location
Allrounder currently operates from a home-based business located at:
11701 Whisper Valley St. San Antonio, TX 78230
Equipment
Allrounder currently owns three luxury vehicles, all purchased within the past year. These are:
- 2016 Maserati Ghibli Sedan (purchased August 2020)
- 2017 Maserati Levante SUV (purchased December 2020)
- 2016 BMW 328i Sedan (purchased March 2021)
Market Analysis
With the exception of the recent market downturn caused by the global pandemic, the exotic car rental market has been experiencing steady growth, particularly in San Antonio where there are few competitors and strong market demand. As noted in Fortune Business Insights “Luxury Car Rental Market Size, Share & Industry Analysis” (www.fortunebusinessinsights.com/luxury-car-rental-market-103652), growth in the luxury car rental market is being led by a “surge in demand for comfort, luxury, and urge to meet high standards” caused by rising demography and increasing standards of living.
In addition, growth in the exotic vehicle rental market is being fueled by concerns over the “increased number of vehicles causing traffic congestion and rising air pollution” causing people to move towards car rentals in place of car ownership.
Competition
Allrounder’s two closest competitors are John Scotti Luxury Prestige and Louelavie Exotics. The selection of inventory with these companies is dissimilar to that of Allrounder’s however, as the competitors’ fleets are significantly larger than Allrounder’s (up to 30 vehicles per company) but principally populated with seasonally restricted vehicles. These two competitors are outlined below:
John Scotti Luxury Prestige: John Scotti is an exotic car dealer in San Antonio who sells, maintains, repairs, stores, and rents luxury vehicles however the company’s rental fleet is limited to long term rentals. The company boasts a large inventory and flexible financing however its focus appears to be on selling exotic vehicles rather than renting. (www.johnscotti/luxuryprestige.com)
Louelavie Exotics: Louelavie Exotics specializes in exotic vehicle rentals and has a large inventory of premium cars offered for rent for leisure, corporate, replacement or special event use. The company has two locations (Laval & Houston) and has secured several industry partners, including John Scotti (listed above). (www.louelavie.com)
Competitive Advantage
Offering luxury car and SUV rental service similar to competitors but offered at a reduced rate gives Allrounder a competitive advantage within the San Antonio, Texas region. In addition, Allrounder offers amenable deposit terms for its luxury car rentals, requiring a $15,000 security deposit compared to the much higher $30,000 security deposits charged by competitors.
One of the greatest advantages Allrounder holds over competitors is its ability to offer luxury vehicle rentals in the off-season due to its inventory of all-wheel drive vehicles while winter weather conditions prohibit operation of the competition’s seasonal fleet inventory.
Risk Analysis
As mentioned previously, the competitor’s fleets are significantly larger than Allrounder’s (up to 30 vehicles per company), which poses a threat to Allrounder as the competitors gain economies of scale and increased brand awareness.
To mitigate this, Allrounder is seeking to expand its fleet (upon securing funding through the SBA Loan Program) with a particular focus on offering affordable all season luxury vehicle rentals, further establishing itself as the industry leader within San Antonio and enhancing its competitive advantage.
Sales & Marketing Plan
Allrounder’s largest target customer group is young professionals who have a passion for driving luxury vehicles but may not have the means to make an outright purchase. Specifically, the company’s target audience is young people of both genders between the ages of 20 – 35 years old who do not have the capital for outright purchase or long-term ownership of a luxury vehicle however wish to have the car of their dreams made available to them.
A secondary target customer group for Allrounder is middle-aged people (also of both genders) between 35 to 55 years old who may be seeking an exotic vehicle rental for use on a special occasion, to become familiar with a particular model on a longer-term basis prior to purchase, or for off-season use when weather conditions limit use of their personal vehicles.
Allrounder currently has a database of approximately 20 recurring customers (originally acquired through social media advertising and personal referrals) who return to rent vehicles on a regular basis.
Key Channels
To date, Allrounder has primarily utilized personal referrals and the personal social media channels of its sole proprietor, Mr. Keith Johnson to secure customers and promote its luxury vehicle rental services. Specifically, these channels are Snapchat (allrounder22), Instagram (allrounder22) and Facebook (Keith Johnson).
In addition, Allrounder has invested over $5,000 in advertising spend for initial promotion on select paid media channels, including social media messenger advertising (via CamCam), attendance at select industry car shows, display advertising in metro stations, and display advertising at sporting events (soccer and hockey games).
Going forward, Allrounder intends to develop a company website, create business pages on social media (Facebook & Instagram), and take advantage of search engine marketing by placing Google search ads that focus on exotic and luxury car rental search criteria.
To acquire additional customers, Allrounder will continue its successful promotional programs (flyers, business cards, and referrals) and intends to host a “Grand Opening” event to officially launch the company beyond its existing customer base.
Management Team
Mr. Keith Johnson is the Sole Proprietor of Allrounder and currently operates the business single-handedly with an estimated annual salary draw of $120,000. Mr. Johnson graduated from high-school and gained an abundance of experience owning his own luxury vehicles prior to starting the company.
Mr. Johnson acquired an appreciation for luxury vehicles at an early age after watching (and falling in love with) a video clip of a Bentley GT when he was 13 years old. The video resonated with Mr. Johnson as part of his cultural heritage, thus inspiring his life-long passion for owning exotic vehicles.
Mr. Johnson’s aptitude for business, strong leadership skills, trustworthiness, and persistent focus fueled by a passion for his craft makes him perfectly suited to lead Allrounder to an even greater success in the coming years.
Staffing
Allrounder anticipates hiring up to five additional staff members within the next three years of operations. These positions will include secretarial support and part-time auto detailers, with a priority placed on hiring administrative office support and a single part-time auto detailer within the next year. Allrounder projects allocating approximately $30,000 per year for administrative support after the first full year of business, and an additional $20,000 per year in subsequent years for part-time auto detailing assistance.
Financial Plan
Allrounder is projected to have strong income potential with consistent cash flow to cover operating expenses. As operating costs are relatively fixed, the addition of new vehicles to expand Allrounder’s operations will provide the company the ability to increase sales, and subsequent profitability, with net income growth potential between 20% to 30% over the next two years.
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