Car Rental Business Plan Template

Car Rental Business Plan Template

If you’re starting a car rental business or expanding your fleet, a strong business plan is essential.

The following car rental business plan template provides the key elements to include in a detailed plan. This template is designed for businesses offering short-term and long-term vehicle rentals for individuals and businesses.

You can download our car rental plan template (including a full, customizable financial model) to your computer here.
 

Sample Car Rental Business Plan Template

Below is a car rental business plan example with each of the key sections to help you write a car rental business plan for your own company.

I. Executive Summary

Business Overview

[Company Name] is a car rental agency with [x] branches and a network of over [x] associated rental offices all over [location]. We manage a fleet of over [x] new, luxuriously equipped cars. We cater to companies and individuals who appreciate the highest quality of assistance and require a fast and professional car rental service, whether it be for business or leisure. In order to meet the ever-changing needs of our customers, we are continuously improving the quality of our fleet and service.

Products Served

[Company Name] offers premium vehicles without premium prices. We offer models from some of the best car manufacturers in the world, including German favorites such as BMW, Mercedes-Benz, Audi and more. Our rental cars are regularly replaced, so clients can feel confident that they will be behind the wheel of a well-maintained and up-to-date rental. All car models we provide are in excellent condition.

The [Company Name’s] inventory includes: convertibles, luxury cars, minivans, SUVs, sports cars and trucks.

Customer Focus

[Company Name] will primarily serve the residents within a 10-mile radius of our location. The demographics of these customers are as follows:

• 47,827 residents
• Average income of $84,700
• 60% married
• 45% in Management/Professional occupations
• 75% of residents are homeowners
• Median age: 38 years

Management Team

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been in the automotive industry for the past 15 years. He has spent much of his career working with [company], where he oversaw the operations for different car rental companies. There, he learned the requirements for automotive maintenance from both a technical and customer service perspective, as well as car rental policies and procedures.

[Company name] will also employ an experienced assistant manager to manage the location. This will be an experienced operations manager who will be trained in other important company operations by [Founder’s Name] so he will be able to take over in absence of [Founder’s Name].

Success Factors

[Company Name] is uniquely qualified to succeed due to the following reasons:
[Company Name] will fill a specific market niche in the growing community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to make use of our services when launched.
Our location is in a high-wealth area where customers are interested in car rental services.
The management team has a track record of success in the car rental services business.

Financial Highlights

[Company Name] is seeking a total funding of $192,000 of debt capital to open its car rental service. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.

Specifically, these funds will be used as follows:
Rental location design/build: $92,000
Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Top line projections over the next five years are as follows:

 

II. Company Overview

Who is [Company Name]?

[Company Name] is a car rental agency with [x] branches and a network of over [x] associated rental offices all over [location]. We manage a fleet of over [x] new, luxuriously equipped cars. We cater to companies and individuals who appreciate the highest quality of assistance and require a fast and professional car rental service, whether it be for business or leisure. In order to meet the ever-changing needs of our customers, we are continuously improving the quality of our fleet and service.

We provide all types of rental services, from short-term rental to long-term contracts for up to 5 years. We service both business and leisure customers.

[Company Name]’s History

[Company Name] company was founded by [Founder’s Name] in [month, year]. Through the years the company established a reputation for its commitment to offer quality, timely and unparalleled customer service. It has since grown and added luxury cars and vans to its line-up of available vehicles. Enriched with a high qualified staff and crew, [Company Name] is always aiming at customer satisfaction and the fulfilment of their needs.

Since incorporation, the Company has achieved the following milestones:

• Found a business location and signed Letter of Intent to lease it
• Developed the company’s name, logo and website located at [website]
• Determined equipment and fixture requirements
• Began recruiting key employees

[Company Name]’s Products/Services

[Company Name] offers premium vehicles without premium prices. We have over [x] rental vehicles in our fleet, including cars from some of the best car manufacturers in the world. Customer favorites include BMW, Mercedes-Benz, Audi and Volkswagen.

Our rental cars are regularly replaced, so clients can feel confident that they will be behind the wheel of a well-maintained and up-to-date rental. All car models we provide are in excellent condition.

[Founder’s Name] will be able to provide clients with the following services:

• Convertible Car Rental
• Luxury Car Rental
• Minivan Rental
• SUV Rental
• Passenger Van Rental
• Long-Term Car Rental
• One-Way Car Rental
• Unlimited Miles Car Rental

As [Founder’s Name] understands, the key to a successful car rental business is being responsive to the particular needs of clients. [Founder’s Name] will have a full-time assistant manager who will, among other things, manage operations and will free up the time of [Founder’s Name] to work on sales and customer service.
 

III. Industry Analysis

The Car Rental industry has increased slightly over the past five years. Rising per capita disposable income, coupled with a national unemployment rate below 5.0%, have encouraged consumers to increase their level of spending on car rentals for leisure trips.

It is anticipated that the industry will continue to grow over the next five years. Industry demand is anticipated to rise alongside a rebound in domestic travel, supported by a recovery in the US economy. Growth in demand for car rental services is expected to be augmented by rising per capita disposable income and improved in corporate profit levels. Additionally, anticipated growth in the number of inbound trips to the United States by foreign visitors over the next five years will likely boost industry demand at airports.

As US airports experience more traffic, demand for car rental services is also forecast to rise to the benefit of industry operators. The industry’s largest companies are expected to retain their competitive advantage over smaller players by maintaining strategic alliances with airlines and hotels. Such partnerships will likely provide rental car companies with a steady stream of referral business, with coordinated rewards programs adding loyalty incentives for consumers.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the residents of [company location] and the immediately surrounding areas in a 10-mile radius.

The area we serve is near the airport and populated mostly by the middle and upper class and lead busy lifestyles; as a result, they have both the need for car rental services and the means to pay for it.

The precise demographics of the town in which our location resides is as follows:

Customer Segmentation

The Company will primarily target the following three customer segments:

• Travelers/Tourists: Families with children and couples are frequently visiting the [Location] area for vacation and recreation. Tourists are great advertisers to future visitors especially when they have a pleasant experience with their car rental service.
• Businesses: Companies rent a significant number of vehicles for corporate contracts. Since the company is located at the center of the city, executives and businessmen use car rental services for important business meetings and fetching VIPs to and from the airport to make a good impression.
• Local customers: This segment comprises loyal locals who use car rental services for temporary use, special events like weddings, or out of town trips with friends and family.

 

V. Competitive Analysis

Direct & Indirect Competitors

The following businesses are located within a 12-mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Car Rentals Inc.
Car Rentals Inc. is a leader in car rental. The company operates about 10,000 rental locations in about 150 countries. About 70% of its revenues come from airport locations. Its fleet includes approximately 524,500 cars from Ford, General Motors, Toyota, and other manufacturers. In addition to its signature car rental services, it also offers fleet leasing and management services.
Vehicles are available for personal rental, special events, charity auctions, corporate incentives, and other uses. They also sell vehicles, and offer an ownership model called Rental Ownership, where owners pay a fee to gain access to any vehicle for three months each year.

Ultimate Car Rental
Ultimate Car Rental partners with affiliate car rental companies to offer car and luxury SUV rental in multiple locations across the United States. They feature vehicles from manufacturers like Bentley, Ferrari, Lamborghini, Mercedes, Porsche, Rolls-Royce, BMW, Corvette, Lexus, Maserati, Aston Martin, Audi, Bugatti, Smart, Lotus, McLaren, Tesla, and more. Hybrid, convertible, electric, and armored & bulletproof vehicles are available.

Vehicles are available to rent for corporate transportation and for special events such as weddings and proms. VIP packages are also available. Customers can choose from daily or weekly rental packages.

Dream Cars
Dream Cars offers exotic and luxury vehicles for rent throughout southern United States. Their fleet includes vehicles from manufacturers such as Bentley, Ferrari, Rolls-Royce, Lotus, Lamborghini, Aston Martin, Hummer H2, Mercedes-Benz, and Maserati.

The company will deliver the rental vehicle to a client’s home, hotel, office, or the airport, and pick up the vehicle at the end of the rental period. For customers who choose to pick up their rental car, free overnight parking of their personal vehicle is available. GPS systems and XM satellite radio are included in most vehicles. And 24-hour roadside assistance is available. Additionally, Xotic will provide instruction on operating the vehicle properly prior to the rental period.

All weekly rental packages include free daily services such as car washing. Xotic also rents vehicles for special events, such as weddings, or for use in movies or advertising.

Competitive Pricing

Pricing varies widely depending on the type of vehicle rental and term, but below is a sample of the rates offered:

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Client-oriented service: [Company Name] will have a full-time sales manager to keep in contact with clients and answer their everyday questions. [Founder’s Name] realizes the importance of accessibility to his clients, and will further keep in touch with his clients through newsletters about car rental specials.
• Management: [Founder’s Name] has been extremely successful working in the automotive business and will be able to use his previous experience to provide the best sales and customer service experience. His unique qualifications will serve customers in a much more sophisticated manner than [Company Name’s] competitors.
• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows many of the local leaders, newspapers and other influences. Furthermore, he will be able to draw from his ties to develop an initial client base.

 

VI. Marketing Plan

You can download our car rental plan template (including a full, customizable financial model) to your computer here.

The [Company Name] Brand

The [Company name] brand will focus on the Company’s unique value proposition:

• Client-focused car rental services, that treat each client individually and get the job done right the first time
• Service built on long-term relationships
• Big-firm expertise in a small-firm environment

Promotions Strategy

Referrals
[Company Name] understands that the best promotion comes from satisfied customers. The Company will encourage its clients to refer their friends and neighbors by providing discounts for new clients. This strategy will increase in effectiveness after the business has already been established.

Internet
[Company Name] will invest resources in two forms of geographically-focused internet promotion—organic search engine optimization and pay-per-click advertising. The Company will develop its website in such a manner as to direct as much traffic from search engines as possible. Additionally, it will use highly-focused, specific keywords to draw traffic to its website, where potential clients will find a content-rich site that presents [Company Name] as the trustworthy, well-qualified car rental company that it is.

Publications
[Company name] will place print advertisements in key local publications, including newspapers, area magazines, and local sport programs. Additionally, the Company will print brochures and place them in specific locations frequented by target individuals.

Pricing Strategy

[Company Name]’s pricing will be competitive compared with [Competitor] and lower than [other competitor], although higher than independent car rental service owners. For regular clients, pricing will be based on the average distance and rental time. For one-time clients, or clients who are trying out the firm’s services, a competitive hourly rate will be charged.

 

VII. Operations Plan

[Company Name] will carry out its operations through phone calls, internet service bookings and walk-in bookings. The business location will be used for sales, customer service, client meetings and bookings. It will house the [x] full-time staff.

[Founder’s Name] will work as the primary salesperson for the company’s services, although the assistant manager and administrative assistant may be trained in sales activities over time. The assistant manager will manage company operations, under [Founder’s Name]’s supervision. The administrative assistant will handle basic bookings and scheduling work for the assistant manager, as well as light answering phones, and organizing human resources.

Milestones

[Company Name]’s long term goal is to become the best car rental service company in the [city] area. We seek to do this by ensuring customer satisfaction and developing a loyal and successful clientele.

The following are a series of steps that will lead to this long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:

 

VIII. Management Team

Management Team Members

[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. [First name] has been in the automotive industry for the past 15 years. He has spent much of his career working with [company], where he oversaw the operations for different car rental companies and automotive shops. There he learned sales, customer service and automotive maintenance processes.

[Company name] will also employ an experienced assistant manager to manage the automotive maintenance operations. This will be an experienced operations manager who will be trained in other important company operations by [Founder’s Name] so he will be able to take over in absence of [Founder’s Name].

Hiring Plan

In order to launch the business we will hire the following employees:

• Sales and customer service: 4 full time employees to manage the day-to-day sales and customer service
• Auto mechanics: 2 full-time, experienced mechanics
• Administrative Assistant: Must be organized, with good phone skills, facility with numbers for bookkeeping, and good writing skills.

 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come primarily from car rental services.

The lease and maintenance of the fleet of cars and labor expenses are the key cost drivers of [Company Name]. The major cost drivers for the company’s operation will consist of:

• Salaries
• Car leases and maintenance
• Lease on business location
• Moreover, ongoing marketing expenditures are also notable cost drivers for [Company Name].

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $192,000 of debt capital to open its car rental business. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.

Specifically, these funds will be used as follows:

• Headquarters design/build: $92,000
• Working capital: $100,000 to pay for marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions

The following table reflects the key revenue and cost assumptions made in the financial model.

5 Year Annual Income Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement