The Russians seem to have “tried” car rental and understood its advantages. Hence the huge growth rate in the number of rental cars in Russia. Annual growth is more than 20%! In this article we will talk about renting a car - where to get a car for this, what class, how much, etc. And also about the pitfalls of this business. But let's start with the main thing, let's talk about clients.
In Russia, the car rental business is rapidly gaining momentum
Car rental customer base
The client base can be divided into two subtypes:
- legal entities;
- individuals.
Legal entities
In our country, legal entities are mainly represented by representative offices of foreign companies. In the West, they have long understood that becoming a corporate client (and therefore enjoying discounts) of a car rental company is cheaper than maintaining your own fleet of vehicles and incurring associated costs. Domestic firms are gradually coming to this, but too gradually.
Individuals
Here the composition is more diverse:
- middle and higher level businessmen;
- top management of large companies;
- Foreign tourists;
- people renting cars for various special events.
As you can see, the middle class is not on this list. The middle class in Russia is still weak and cannot afford to use car rental on a regular basis.
Cars are often rented for special events.
The first two positions on this list may raise some doubts. Such people should definitely have their own car. But there is nothing surprising here. Cars sometimes break down and get into accidents, but a businessman without a car is like without hands. And he wasn’t used to being without a car key in his pocket. He's uncomfortable! In addition, domestic businessmen often rent cars to improve their image. For example, there are negotiations coming up with an important client and a contract with a lot of zeros is at stake. For this purpose, you can show up in a brand new Mercedes, and not in your Passat, which is not the latest model.
A certain narrowness of the client base does not mean that you can trust the keys to your rental cars to everyone. Typically, rental companies refuse clients under 21 years of age (and for expensive cars - 25 years) and with less than a year of driving experience (or even 3 years).
If you rent a premium car without a driver, the company checks this client’s database for criminal records.
Where to get a car for car rental
This is a business, which means it is subject to all its laws. The main one is to try to put money into circulation, and not to immobilize it in fixed assets. Hence the conclusion. If you have, for example, 2 million rubles, then it is better to lease 6 cars with it executive class, paying a down payment of 30% of the cost of the car than buying 2 cars.
In any business, it is important to manage your finances correctly.
Let’s say each car brings in 60 thousand rubles a month. Of these, 30 thousand you will pay for leasing. In total, your profit per month will be 30,000 x 6 = 180,000 rubles. When buying two cars, this will be 2 x 60,000 = 120,000 rubles. But you still have to pay for insurance and Maintenance, and when leasing, this is all already taken into account in the monthly payment.
You can, of course, buy used cars for little money, bring them outwardly to a new condition and rent them out. As practice shows, very quickly such cars begin to break down frequently, bringing no profit, only losses. After all, when renting a car, a person treats it not as his own. Hence the increased wear.
By the way, leasing provides a scheme in which you can hand over in 3–4 years old car, as a down payment for a new car!
What should be the structure of the vehicle fleet?
In the very general case The rental car fleet must have the following cars:
- premium;
- business class;
- Economy class;
- retro and exclusive.
The characteristics of the customer base in Russia dictate interesting proportions among these classes - 20–30% of the total number of cars are premium class, 60–70 are business class, the rest are economy (excluding retro and exclusive cars). In these classes, cars with both manual and automatic transmissions are in demand.
The farther you are from Moscow and St. Petersburg, the greater the demand for economy class. Our only advice is not to use Russian cars. Domestic Ladas are no longer so different in price, but their reliability still leaves much to be desired.
Where to keep cars
No garages! After all, your cars should be driving most of the time! Therefore, the most acceptable option is a parking lot. By the way, this could be a parking lot near some large shopping center or hypermarket. Just need to decide organizational matters with their leadership. You can also rent office space there. It is ideal if the parking lot is located next to a major transport hub - a railway or bus station, but not an airport, which is too far from the city, which is inconvenient for the majority of customers.
Car rental price
This critical indicator must be determined after being carefully compiled. It is necessary to very carefully calculate all expenses - for service personnel, car maintenance, leasing costs, parking costs, office rent, advertising (a very important expense item, especially for start-up companies), etc.
In no case do we recommend:
- (see arguments above);
- save on insurance (exclude various insurance cases, for example, theft);
- save on equipping the car (for example, do not equip it with a system that allows you to track the location of the car).
Of course, you need to strive to reduce costs, but doing it wisely. More promising is an increase in the range of services. For example, delivering a person home after various celebrations. That is, you provide the client with a car with a driver for rent, plus a driver who will deliver his car to the specified location.
Currently, car rental prices are approximately as follows:
- economy class (Chevrolet Aveo, Renault Logan, Daewoo Lanos, etc.) - 900–1500 rubles/day;
- business class (Toyota Corolla, Mazda 6, Nissan Teana, BMW 1–3 series, Audi 1–4, etc. Ford Mondeo) - 2500–4500 rubles/day;
- premium class (Toyota Camry, Toyota Land Cruiser, Infinity, BMW 5–7 series, Audi 6–8, Lexus, etc.) - from 5,000 rubles/day.
All prices are indicated without driver. If a driver is needed, then $60/day is usually added to the price tag.
Another point is the daily mileage. As a rule, it is limited to 200 km/day. If it is more, the daily rate increases sharply.
This article was written based on the results of a conversation on Skype with Nizhny Novgorod entrepreneur Vasily Kuropatin, who created own business for cheap car rental, and which with great pleasure shared his successes with our readers. We tried to concentrate in the article the most important questions about opening an inexpensive car rental in a city with an average number of solvent population.
Car rental is a great business for those who know it!
Almost every person with a stable income has their own car. But despite this, vehicle rental remains a very promising area.
For example, in Europe and the USA, the car rental business is already well established. Many people do not bother with maintaining their own transport, but simply rent it.
In our country, this type of activity is very poorly developed, but a tendency towards increasing demand can still be traced. For example, for Last year The Russian car rental market grew by almost 15%. It is hoped that this trend will continue in the future.
The main thing: create your own car rental business plan
We (the editors of the “Russian Startup” project, in almost every article devoted to opening a new business, never cease to assert (big personal experience) that starting a business without a well-developed, working business plan is the height of stupidity and “recklessness.”
Especially if we're talking about about businesses such as car rental where large investments are required. Read the section of this article: “Financial indicators”. Look at the numbers, which reflect a very, very serious investment in the business.
Is it really possible to start such a business (as well as any other) without a clear understanding and step by step instructions? No and no. A business plan is your instructions and route map. Every day, practically.
Who are the clients?
As a rule, it is necessary to focus on wealthy clients. As for the middle class, they rarely use the services of such companies.
An interesting fact is that most renters have their own car. The reason for contacting a rental company is to repair your vehicle, travel out of town, the need to impress business partners, and so on.
Nowadays it is becoming increasingly popular to rent a car on long term, which provides the entrepreneur with a very solid and stable income.
VIP class cars are most often booked for a maximum of one day.
If we look at prices, then renting a domestic car costs from 1000 rubles per day.
A foreign car will be more expensive – from 3,000 rubles per day or more.
To the most expensive transport includes a limousine, which is billed on an hourly basis.
The average rental cost is from 3,000 rubles, but already per hour.
Such a high price is explained by the fact that the car is provided with a driver.
If possible, it is necessary to enter into agreements with corporate clients who will regularly rent cars and generate a stable income.
Naturally, for this type of cooperation there are certain requirements for the form of organization.
Choosing a form of ownership
If your task is to open a car rental business, which can be developed and received good profit, then give preference to LLC with simplified taxation.
At the same time, to reduce costs, register vehicles maybe for yourself. If you have doubts about choosing a form of ownership, you can contact consultants who will describe the procedure in more detail.
As a rule, registering an LLC costs about 100-150 thousand rubles.
Renting inexpensive or luxury cars?
Cars
The most expensive part is purchasing transport for business. At the same time, it makes no sense to start with several machines. The best option is a fleet of 10-20 cars.
Most a budget option– products of the domestic automobile industry. But keep in mind that such cars are rarely rented, so it is better to give preference to reliable and time-tested foreign cars - Audi, Mercedes, BMW and others:
- economy class (40% of the total fleet) – small foreign cars (Volkswagen, Ford, Renault and others). Their cost is from 2000 rubles per day;
- comfort class (20% of the entire fleet) - Hyundai Solaris, Chevrolet Aveo and others. Rental cost – from 3000 rubles;
- business class (20% of the total fleet) - Skoda Octavia, Volkswagen Passat, Honda Accord and others. The price of such cars is from 4,000 rubles per day;
- elite class (20%) - for example, Audi A6, Mercedes. Such cars are more suitable for businessmen for organizing business meetings. Costs for renting VIP class cars – from 7,000 rubles per day.
As for more prestigious brands, such as Porsche or Ferrari, this is, unfortunately, impossible to do in Russia.
You can buy cars immediately for cash (in this case, the cost can exceed 20 million rubles) or lease the equipment. In the latter case, you can “get off” only with an advance payment.
In the future, you can make payments from the profit received. Another big advantage of leasing is that the cars remain the property of the lessor.
This means that registration, maintenance and registration are his problems. In addition, there is a chance to save on tax payments (which most entrepreneurs successfully use).
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Insurance
Buying (leasing) cars is not enough - they need to be maintained. The largest expense item is insurance. As a rule, for each car this is about 10-15% of the total price.
At the same time, hiding cars from insurers or trying to cheat is a very risky activity. It’s better to register all the cars properly and get a discount.
Most insurance companies provide services with an unconditional deductible.
The discount in this case can be quite significant.
Particular attention should be paid to the conditions specified in the insurance contract. The documents must indicate that the car can be left anywhere and at any time.
The total cost of insurance is from 2 million rubles per year.
Parking
You need to choose a place where all the cars will be stored. It is advisable that this be a guarded and covered parking lot. The optimal location is in a residential area or the center.
Cost – from 2 thousand rubles for one place. If there are 10-20 cars in the fleet, then the costs will be from 20,000 rubles per month.
Do you need an office?
Regarding your business premises, the situation here is twofold. On the one hand, you can save on this expense item, and orders can be accepted by phone and the car can be delivered to the specified address.
On the other hand, foreign clients prefer to work through offices. In principle, it is enough to rent small room for 2-3 people.
The optimal location is as close as possible to the parking lot where the cars are located. The area of the room should be 15-20 square meters. In this case, the rental cost is from 20,000 rubles.
It is necessary to organize workplaces for workers in the room, put tables with computers, chairs and sofas for clients. General expenses for equipment of the premises - from 100 thousand rubles.
Employees
You will need several workers. 2-3 people will need to be placed in the office to receive and process orders, carry out payments and other “paper” work.
In addition, it is required to hire 1-2 transport production specialists (and drivers in one person).
As for dispatchers for accepting applications, young girls or boys, preferably with an economic education, are suitable here. Knowledge of car models and their features (at least in general outline) is required.
As for the release specialist, this may be a former taxi driver. The main requirements are no criminal record, responsibility and knowledge of cars.
Total labor costs – from 100,000 rubles per month.
Advertising
Car rental is a business that needs to be promoted. In this case, the greatest results can be achieved by installing outdoor advertising, organizing a website on the Internet and placing banners on relevant sites, distributing booklets and visits.
For the first time, you can cover all the cars in your fleet. The costs here are small, but the effect will be maximum. “Decorating” one car with such advertising will cost from 2 thousand rubles.
To create and promote a high-quality website - from 50 thousand rubles, and then another 5 thousand rubles monthly for its maintenance, filling it with content and other activities.
Car rental without driver
Payback
One of the main issues is the profitability of the business. As a rule, to make a normal profit, the machine must work somewhere around 60% of the time.
In this case, you can count on an income of 700 thousand rubles per month. As a rule, this figure can be reached after just a few months of work.
The total payback period is 2-3 years.
Table No. 1. Potential of consumers of car rental services in Russia
Dangers
We must not forget that renting cars for money is a risky business. Therefore, it is necessary to be selective in choosing clients and put forward certain requirements to them.
In particular, they must be over 25 years of age (minimum 21 years). An important factor is having a solid driving experience ( best option– from 3 years old).
At the same time, we must not forget that even thorough check cannot completely protect clients from getting into accidents. This is where an agreement with an insurance company will be necessary.
At the same time, the car rental business still suffers losses, because the car is under repair and, therefore, does not generate income.
Another important point is the requirement of collateral from clients. Here prices may vary. For example, when registering a domestic car, the deposit will be from 50,000 rubles, for foreign cars - from 100,000 rubles.
Moreover, the higher the cost of the car, the greater the deposit. But keep in mind that this option can scare off many clients.
Table No. 2. Growth of participants in the car rental market in Russia
Results:
So, let's summarize the financial results:
- business registration – from 100,000 rubles;
- purchase of cars – from 20 million rubles. Leasing is possible (in this case, the initial costs will be from 4 million rubles);
- insurance costs – from 2 million rubles;
- office and purchase of equipment – from 120,000 rubles;
- advertising – from 100,000 rubles;
- expenses for wages– from 90-100 thousand rubles per month;
- parking lot rental – from 20,000 rubles per month.
Income – from 700,000 rubles per month. Payback – 2-3 years.
Conclusion
The car rental business, and especially cheap car rental, is a very profitable, but risky direction. It is important to take into account that it is necessary to open an LLC in big city with a population of 500 thousand people. Otherwise, it will be very difficult to make a decent profit.
Every year the business of leasing cars (rental) is increasing by Russian Federation by about 19 percent. And the cash turnover in this market segment is about $2,500,000.00 monthly, which amounts to $40,000,000.00 per year. But these data are at a very low level than in developed countries. In connection with this, there is a need to develop a car rental business. Moreover, only a limited number of people are using this service. If you want to understand what kind of profit it can bring car rental as a business, then in this case this article will definitely help you.
Analyzing competitors
A car rental business is profitable and promising after studying the entire market segment, analyzing competitors and evaluating all services provided. Organizations that directly engage in car rental are classified according to the following criteria:
- World-famous organizations with a very large fleet of vehicles;
- Russian organizations with a fleet of no more than 50 cars;
- Businessmen with about 2 cars in their fleet;
Companies providing car rental services for various holidays, weddings, etc. Their fleet is dominated by luxury cars.
Start-up capital
Renting a car as a business involves quite large expenses. Because if you decide to open such a business, you must have at least 8-11 cars at your disposal to rent out. If you do not have enough money to purchase such a number of cars, a method of purchasing a car such as leasing is suitable for you, that is, you initially pay only about 30 percent of the original price. After purchasing a car, you will have to spend a lot on car insurance. CASCO, of course, needs to be issued for each car. Rent costs a lot of money suitable premises. Since the car rental business, on Russian market, only in the development stage, do not save money on advertising policy, since with its help you will definitely form your customer base. Let us note the fact that with a large starting capital, the payback will not be long in coming. The profitability of the entire project is quite high. A year or two and you will recoup all the costs incurred. But don’t forget, for the successful and promising growth of the entire business, you need to think through everything to the smallest detail.
Analysis of potential clients
In order for your car rental services to be in demand and popular, you must be clearly focused on a particular client. Do you know that the price for renting a Russian car industry reaches $30 for 24 hours. This is quite a considerable amount. Accordingly, your potential clients are people with high level income. But the question immediately arises: such people probably have their own car, and, quite possibly, more than one.
So who are the clients of car rental companies? Mainly by these services. used by those who for some reason cannot use their car. This is the contingent of people who rented a car, for travel or for entertainment. There is also a group of people who rent a car for a short period of time, for example, for one day, for some important event.
Your clients can be large companies. Main types of car parks Have you decided to get serious about car rental business? Let us tell you right away that you cannot do without a business strategy (business plan). To begin with, we advise you to decide what services you provide and what market segment you specialize in.
The first option is “inexpensive”. Operating in this segment, companies mainly rent out cars from the Russian automobile industry. The leading brand in the vehicle fleet is Zhiguli. Rentals remain at the same level good attitude quality and price. But there are few such companies, since then it will be difficult for you to move to a more prestigious segment. Of course, companies generally prefer the “Rich” segment. Here, customers are offered cars of medium, economy and business class. Organizations give preference to foreign cars because they are of much higher quality and are more expensive to rent. The main types of cars in such fleets are Audi, Volkswagen, Skoda and others.
Luxury car rental "Limousine"
Renting out a car is a modern business idea that can be implemented in any city. However, in order to achieve success, you need to approach the organization of this business extremely responsibly. Today you can rent out a variety of cars. However, the most expensive rental is the luxury Limousine car rental, so do not forget to take this into account when developing your business strategy. Such machines are billed on an hourly basis. This car is mainly used for various holidays (wedding celebrations). The average price of a limousine is around $60/hour (rental involves handing over the car with a driver).
Foreigners are also yours potential clients. They most often prefer to rent a car with a driver. Therefore, about $65 is added to the price for renting a car.
A driver's working day is eight hours. If the client wishes to go beyond working hours, then the payment increases accordingly. But it is not always profitable for companies to have a non-employee driver. Their services are used as a temporary hire, or there are about ten cars per full-time driver.
How to achieve a certain level of income
If you want to organize car rental as a business in your city, then you should read about what kind of income this business idea can bring. According to experts well versed in the car rental industry, they confidently state that for a medium-sized company it is profitable to keep no more than 30 units in the fleet, and it is better if these are cars foreign manufacturers. Since Russian cars are of such low quality, you will need to duplicate your entire fleet in order to have spare parts for broken cars.
In your future business plan, be sure to take into account all the mathematical calculations for payback and profitability of car rental. Let’s say right away that profitability ranges from 20 to 25 percent. To constantly have a high income, provide your fleet with highest degree workload. According to statistics, the load on one car should be 230 days in one year. To achieve such results, as we noted above, it is worth investing considerable cash into the advertising policy, build it competently in order to attract as many customers as possible.
Key points of car leasing
As noted above, one of the ways to save money is by leasing cars; this is an excellent saving, especially at the stage of creating a company. In practice, several forms of leasing have become widespread. Here is one of the famous ones:
- To begin with, you make a down payment; this contribution is equal to 30 percent of the initial price of the car.
- Subsequently, you make a monthly payment of three percent of the price of the car. The maximum leasing period, under these conditions, is twenty-five months, after which you become the owner of this car.
Let's give an example: The monthly leasing payment is five hundred dollars, the profit from renting a car brings you one thousand dollars, respectively, exactly half of the profit remains with the owner of the fleet. Agree, excellent arithmetic.
Important rental rules
Car rental as a business can bring good income. However, this can happen if you approach the organization of this business very responsibly. So, you have opened a car rental company, you have drawn up a competent business plan, but for successful work you need to know important rules of this case.
Absolutely every applicant should not rent out a car. There are a number of restrictions. For example, the client must not be under 21 years of age. Rent cars to people who have driving experience (preferably more than three years).
It is advisable to check for a criminal history of those who want to rent an expensive car. This can be done through the security service, which has the ability to cooperate with the police or traffic police. If you suddenly discover a client has a criminal past, it is better to refuse him the service.
Remember that not all clients treat rental cars conscientiously, so renting them out without a driver is a big risk. On average, for one hundred services provided, you receive about six emergency situations. And these are direct expenses of the company. In order to reduce the upcoming repair costs, they take a cash guarantee (deposit) from the client or, another way out, insure the car.
A few important points about car insurance
Before opening a car rental company, we remind you once again about the need for clear calculations of all costs. The bulk of future costs will be the cost of insuring your entire fleet. It is possible to insure all your cars as corporate ones. In this case, the cost of such insurance will be equal to 12 percent of the cost of the car. If Insurance Company learns that the insured cars will be used as rental vehicles, the cost of the policy for you will increase by an increasing factor equal to two. Many insurance companies are reluctant to insure such vehicles.
Office space
Regardless of what kind of cars you will rent out, domestic, imported, luxury, etc., you cannot do without an office. In the office premises, initial negotiations are conducted, contracts are concluded, the cost of the service is fixed, and after all these operations the rented car is delivered to the agreed address. The office location should be convenient, in this case prerequisite is the presence of a parking zone. The size of the room is about 15 sq.m. that's enough to accommodate workplace manager who is directly involved in concluding contracts.
We recruit staff and attract potential clients
The staffing level of your future company directly depends on the operating mode of your future company and the number of cars in your fleet. With a 24-hour operating mode, you will need two specially trained dispatchers and four repair technicians who analyze the operating condition of the fleet and issue vehicles. Future employees should again be checked for criminal backgrounds, so do not hire people with a dark past. To attract and lure clients to your company, take care of advertising your organization. Here are some advertising examples:
- outdoor advertising is the main method of attracting
- advertising on the Internet,
- printing business cards and booklets in a printing house.
Basic rules for renting
From this article you learned how to properly organize a car rental business. We recommend that when running a car rental business, you rely on current legislation. An agreement with a client must be drawn up in writing, and if the agreement is concluded with an individual, it is also notarized. For example, if a person who owns a luxury car wants to rent it out on their own, we advise you to seek the help of qualified specialists in order to correctly and competently draw up the contract. And don't forget to get insurance.
Car rental business is quite profitable and simple direction, which does not require impressive financial investments. If in the recent past such services were not in demand, now the rental business is developing at a rapid pace.
- How to start your own car rental business?
- The target audience
- What cars are best to rent?
- How much money do you need to start?
- How much can you earn by renting a car?
- What documents are needed to rent a car?
- What is OKVED for business?
- What documents are needed to rent a car?
- How to make your car rental business more profitable
How to start your own car rental business?
Firstly, you can start operating a franchise by becoming a representative of a well-known Western company. Secondly, small companies that rent out cars often operate at dealerships. You can also organize a separate, independent company. Before choosing one form of business or another, you should evaluate its competitiveness. Registering an enterprise does not present any particular difficulties, since renting out a car does not require obtaining special licenses.
The initial stages are the same for any type of business. This includes searching for suitable office space, recruiting personnel, purchasing office equipment and software. There are some features in the rental business that should be studied in advance. Firstly, it is not easy to find specialists in the car rental industry. This line of business began to develop recently; there are few professionals in this field. With the increase in the number of companies providing such services, your company may not be able to withstand the intense competition.
The target audience
Both individuals and legal entities rent cars. Private individuals mean businessmen and top managers. Foreign representative offices are increasingly turning to car rental companies. This is explained by the need for cars in the absence of our own fleet. Moreover, many companies consider maintaining their own fleet unprofitable.
Today, due to active repair and construction work, rental of the necessary tools for this is becoming popular again in Russia. For many citizens this may turn out to be quite convenient.
Not everyone will buy expensive tools in order to make repairs in one apartment. It is much cheaper to rent them, paying for use daily.
In addition to professional and household tools, you can rent gas-powered equipment, vibrating devices, and parquet sanding machines. Overall, rental construction equipment can bring considerable income. We will consider the organization of this type of activity in more detail below.
Business plan: tool rental
When organizing any business, everything should be carefully thought out and calculated. This case is no exception. To implement an idea, you need to properly draw up a business plan. Renting a tool is not as simple as it might seem.
The documents should describe all the main aspects of this field of activity. It is also necessary to analyze the main problems that may arise when opening this business and determine the main ways to solve them. This will be discussed further below.
Selecting a room
Here you will need individual approach. The room in which your tool rental shop will be located can be about 20 square meters in area, and in any residential area of the city. The ideal would be a small corner in an existing store so that access by car is convenient.
Not every client can carry 20-25 kilograms of rented equipment. If the store is located on a busy side of the street or highway, you need to design the office window well so that it attracts the attention of consumers from afar.
Recruitment
In this case, you will need the following specialists:
- Repairer of units and tools.
- Equipment receiver. He may also be responsible for concluding contracts and maintaining financial records.
- Accountant.
- Lawyer (if the instrument is not returned for a long time).
Advertising
This is an integral part of business development, which is reflected in the business plan. Tool rental should begin with active advertising of the company. You can publish an ad in local newspapers or hand out flyers.
Hours of operation
Based on the experience of other entrepreneurs, the optimal working hours will be from 09.00 to 19.00 without a break. Day off is Sunday.
Deciding what can be rented
The list of the main most popular tools includes the following:
- Rotational devices – jackhammer, drill, impact wrench, etc.
- Grinding and cutting tools - saws, grinders, etc.
- Welding equipment and fixtures.
- Assembly and compressor devices.
- Construction tools - concrete mixer, heat gun, etc.
It should be remembered that rental will be in demand if you offer a large assortment of goods, preferably about 30 items. Also, renting construction equipment significantly diversifies the list of services. It must be of a professional type in order to be in demand among serious construction teams. It is better to take care of this long before opening a rental office. You need to decide where the equipment and tools will be purchased. Buy them from places that will provide warranty documents and a discount for buying in bulk.
Potential consumers
Typically, clients fall into three main categories:
- Builders who do private renovations. The rental of tools is included in the estimated cost of the work. This category of clients is subject to mandatory training on safety precautions and the use of electrical equipment, because not all builders in practice turn out to be professionals; they can easily break the rented goods.
- Private individuals. This is the most problematic and common category of tenants. They should be given a lot of attention and should also be detailed instructions on all questions and a detailed study of the client’s personality.
- Legal entities, organizations. This category of clients usually has their power tools break down. It’s easy for a manager to work with such clients. Detailed instructions are not required; work experience is available.
We take into account the presence of risk factors
Be sure to include this point in your business plan. Tool rental involves the following main risk factors:
- It often happens that the renters of tools or equipment may be people who have absolutely no experience working with them. This means that there is a high probability of getting back an already broken device or, even worse, the client may injure himself if he uses it carelessly. To avoid these troubles, managers should provide detailed instructions on the use of tools and equipment. This is important.
- All rental points should have stands with instructions and rules for operating various tools and equipment, as well as regulatory documents on safety precautions when using them. It is better to familiarize the consumer with these materials upon signature.
- When concluding a lease agreement, the client must provide his passport, of which it is better to take a photocopy, so that in case of failure to fulfill the agreed obligations, the unscrupulous tenant can be easily found. Usually rental points do not require a deposit, but it is better to insure yourself and still take 100% of the cost of the equipment. However, not every person carries such an amount with them. After all, for example, on average, an ordinary hammer drill costs about $1,000. Then, in this case, they are limited only to insuring the instruments, as well as determining the identity of the tenant.
When can I expect profit from investments?
As a rule, rental points provide their services on the basis of payment for the tool on a daily basis. The average rental price for one unit of equipment for one day is about 9-10% of its cost. Typically, clients can take at least two types of any instrument per day. This is what simple builders who have small amounts of work do. But large teams can rent ten units of tools at once for a period of more than a week. The average payback period for one device is about six months.
It is better to open this business in the summer, more precisely, even from the beginning of May to the end of October. At this time, the newly opened tool rental can be visited by about five to seven clients in one day. Towards the end of the year, demand will decrease significantly. As a result, there will be only two or three clients every day.
The average cost of renting a tool per day will be about 500-600 rubles. As work experience accumulates, in the coming year the tool rental business will bring its owners 15 contracts each day worth about 1 thousand rubles each.
You can also sell along the way. Consumables To various devices, freeing the client from going to the store. It will be convenient for the renter to purchase dowels, drills and much more directly at the tool rental point, and for you this will become an additional source of income.
If within six months from the date of opening of this business The average monthly income of a rental office will be below one and a half thousand dollars, think about whether it is worth continuing to do this business. In this case, the tools can be sold for 50% of the cost, as well as stands and tables, gaining about 25% of the initial investment.
But let's not talk about sad things. Renting tools can bring a fairly stable income if you plan everything well and pay attention to clients and try to sense those who are ready to deceive. It would be nice to know about the structure of the tools, because sometimes you will have to rent them out for up to 20 days a month, and you need to be prepared for anything. If during the first year of work the entrepreneur has enough money to pay salaries and rent premises, then we can assume that the business has been a success and profits will soon begin to flow. Just a little time left to wait, you are on the right track.