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Executive Summary

Your executive summary is the first part of your car rental business plan, but you usually write it last because it is a summary of all the most important parts of your plan.

Your Executive Summary should quickly grab the reader’s attention. Tell them about your car rental business and where it is located. For example, are you just starting out, do you have a car rental business that you want to grow, or do you run a network of car rental businesses?

Next, give a brief summary of each part of your plan. For instance, you could briefly describe the car rental business. Talk about what kind of car rental business you have. Detail your direct competitors. Tell us about the people you want to work with. Talk about your marketing plan in a few words. Find the key members of your team. And tell us what your plan is for your money.

Company Overview

In your business summary, you will say what kind of car rental business you have.

You could, for example, run one of the following:

  1. Car rentals: This type of car rental company lets people rent cars for short periods of time for business and pleasure.
  1. Car leasing: This type of business lets people rent cars for long periods of time with a fixed monthly payment and an upfront leasing fee.
  1. People can rent cars from this kind of business for short periods of time, usually for an hourly or daily fee.

In the section of your business plan called “Company Analysis,” you should explain what kind of car rental business you run and give some background information about it.

Questions like these should be answered:

  • When and why did you start your own business?
  • What are the most important steps you’ve taken so far? As milestones, you could use sales goals, the number of new contracts, etc.
  • Your legal structure. Do you run your business as an S-Corporation? An LLC? A business with just one person? Tell us about your legal structure.

Industry Analysis

In your industry analysis, you need to give an overview of the car rental business.

Even though this seems useless, it can be used in more than one way.

First, you’ll be smarter if you learn about the car rental business. It helps you understand the market better.

Second, market research can help your strategy, especially if it shows you what the market trends are.

A third reason to do market research is to show your readers that you know a lot about your field. You do that by doing the research and putting it in your plan.

In the industry analysis part of your business plan for a car rental service, you should answer the following questions:

  • How much money does the car rental business make each year?
  • Does the market go up or down?
  • Who are your biggest competitors?
  • Who are the main suppliers in the market?
  • What new things are going on in the field?
  • How quickly do you think the industry will grow in the next 5–10 years?
  • What’s important is how big the market is. That is, how big of a market do you think your car rental business could have? You can figure out such a number by figuring out how big the market is in the whole country and then applying that number to the number of people in your area.

Customer Analysis

In the “Customer Analysis” section of your business plan, you must describe the customers you serve or expect to serve.

Customers in airports, customers outside of airports, people who rent cars, people who share cars, etc., are all examples of customer segments.

As you might expect, the type of car rental business you run will depend a lot on the customer segment(s) you choose. Customers who share cars will want different service options and respond to different marketing campaigns than customers who lease cars.

Try to figure out who your best customers are based on how they look and what they think. Talk about the ages, genders, locations, and levels of income of the people you want to serve. Most car rental companies mostly serve people who live in the same city or town as them, so demographic information is easy to find on government websites.

Psychographic profiles explain what your ideal customers want and need. If you can understand and define these needs well, it will be easier to get customers and keep them coming back.

Competitive Analysis

In your competitive analysis, you should list both direct and indirect competitors for your business and then focus on the direct ones.

There are other businesses that rent cars and are direct competitors.

Customers can buy things from other places that aren’t direct competitors. This includes taking the bus, a taxi, or a driver-driven car. You should talk about this competition to show that you know not everyone who needs a way to get around will rent a car.

In terms of direct competition, you should list the other car rental services that you compete with. Most likely, the rental car companies closest to you will be your biggest competitors.

Give an overview of each of these competitors’ businesses and a list of their strengths and weaknesses. You won’t know everything about your competitors unless you’ve worked at one of their companies. But you should be able to find out important information about them, like:

  • Who are the clients they work with?
  • What are the things they sell?
  • What are the prices (high, low, etc.)?
  • What are they really good at?
  • Why do they mess up?

Try to answer the last two questions from the customer’s point of view. And don’t be afraid to ask the people who buy from your competitors what they like and don’t like about them.

In the last part of your competitive analysis, you should list the ways you are better than your competitors. For instance:

  • Will you provide superior services?
  • Will you offer things that your rivals don’t?
  • Will you make your services easier or quicker for people to use?
  • Will you be nicer to your customers?
  • Will you make better prices?

In this part of your plan, you should think about how you will do better than your competitors and write those ideas down.

Marketing Plan

Usually, a marketing plan includes four parts: the product, the price, the place, and the promotion. Your car rental business’s marketing plan should include the following:

Product: In the product section, you should talk about the type of car rental you talked about in your Company Analysis. Then, describe in detail what you’ll be selling. Do you, for instance, offer car-sharing services in addition to renting cars for business and pleasure?

Price: Write down what you’ll be charging and how it compares to what your competitors are charging. The product and price sections of your marketing plan are basically where you list the services you offer and how much they cost.

Usually, a marketing plan includes four parts: the product, the price, the place, and the promotion. Your car rental business’s marketing plan should include the following:

Place: This is where your business renting out cars is. Write down where you are and how it will affect your success. For example, is your car rental business close to an airport, a place that fixes cars, etc? Talk about how people could keep coming to your location.

Promotions: The last part of your car rental marketing plan is about promotions. Here, you’ll list how you’ll get people to your location (s). Here are a few ways you could promote your business:

  • Putting ads in local newspapers and magazines
  • Trying to reach out to local bloggers and websites
  • Flyers
  • Marketing with social media
  • Local radio advertising
  • Places near you that have banner ads

Operations Plan

You wrote about your goals in other parts of your business plan. In your operations plan, you talk about how you will reach these goals. Your operations plan should have two different parts.

Everyday short-term processes include things like helping customers, getting supplies, keeping the store clean, and so on.

Long-term goals are the things you want to accomplish in the future. These could include dates like when you want to sign your 100th lease or make $X in sales. It could also be when you plan to hire your Xth employee or start up in a new location.

Management Team

If you want to show that your car rental business can do well as a business, you need a strong management team. Showcase the backgrounds of your key players, focusing on the skills and experiences that show they can help a company grow.

You and/or your staff should have worked in the car rental business before. If so, talk about your skills and experience. But you should also talk about any experience you have that you think will help your business succeed.

If your team is missing something, you may want to form an advisory board. The same way that a mentor would help your business, a two-to-eight-person advisory board would do the same. They would help answer questions and give suggestions about how to plan. If you need to, try to find people for your advisory board who have run small businesses or rented cars before.

Financial Plan

Your 5-year financial plan should start with a monthly or quarterly breakdown for the first year, then switch to an annual breakdown for the next four years. Your financial statements include your income statement, your balance sheet, and your cash flow statement.

A more common name for an income statement is a P&L, which stands for “Profit and Loss.” It shows how much money you made and then subtracts how much you spent to show if you made a profit.

To make your income statement, you need to make some assumptions. For instance, do you want to rent 10 cars a day or 50? And will sales grow each year by 2% or 10%? As you might expect, the assumptions you choose will have a big impact on the financial forecasts for your business. Try to find out as much as you can about your assumptions to see if they are true.

Balance Sheets: Balance sheets show a lot of information, but the most important things to know are your assets and your debts. For example, if you spend $100,000 to start a car rental business, you won’t start making money right away. Instead, it is an asset you can use to make money for years to come. Also, a $100,000 check from a bank doesn’t have to be paid back right away. You will have to pay that back slowly instead.

Cash Flow Statement: Your cash flow statement will help you figure out how much money you need to start or grow your business and make sure that you never run out of cash. Most business owners and entrepreneurs don’t know that you can make money and still go bankrupt because you ran out of money. For example, say a company came to you with a $100,000 fleet lease contract that would cost you $50,000 to complete. Well, in most cases, you would need to pay that $50,000 now for things like supplies, repairs, employee salaries, etc. But imagine that it took the company 180 days to pay you. You could run out of money during that time.

Make sure to include some of the most important costs of starting or growing a car rental business on your Income Statement and Balance Sheet.

  • Location build-out, which includes construction, design costs, etc.
  • The costs of things like software, tools for maintenance, etc.
  • Keeping a good fleet of cars in good shape costs money.
  • Payroll or salaries that are given to workers
  • Commercial insurance
  • Charges and permits
  • Legal expenses