1.1 Products and Services
As mentioned above, the Car Rental Agency will be actively engaged in the rental of economy class, standard, and luxury vehicles for tourists and vacationers within its targeted market. A bulk of the Company’s revenues will come from the daily rental charges for vehicle usage. The business will also recognize revenues from the sale of insurance services and gasoline charges to customers. At the onset of operations, the Company intends to have a leased fleet of 30 vehicles. The third section of the business plan will further describe the services offered by the Car Rental Agency.
1.2 The Financing
Mr. Doe is seeking to raise $300,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest …show more content…
3.1 Daily Car Rentals
The primary source of revenue for the business will come from the direct daily rental of the Company’s fleet of approximately 30 vehicles. The Company will have three tiers of rentals including economy, standard, and luxury. Management expects that 75% of all rentals will fall into the economy or standard class. A limited number of luxury vehicles will be held on the lot for wealthy tourists and business travelers. Daily charges to clients will range from $49 to $99 per day depending on the type of vehicle they intend to rent.
3.2 Insurance Fees and Ancillary Services
In addition to daily charges made to vehicle renters, the Company will earn secondary streams of revenue from the sale of additional insurance. This is an important secondary steam of revenue for the business as sales of additional car insurance will generate substantial gross margins for the Car Rental Agency. Additionally, the Company will charge substantial fees to customers that do not return the vehicles with full gas tanks. Approximately 25% of the Company’s aggregate revenues will come from the sale of insurance and gas …show more content…
Each year, these businesses aggregately generate more than $20 billion dollars of revenue and provide jobs to more than 120,000 people. Aggregate payrolls in each of the last five years have exceeded $3.1 billion. This is a mature industry, and the future expected growth rate is expected to equal that of the general economy. As mentioned above, despite the currently high gasoline prices, the industry will continue to remain profitable as business travelers will continue to require rented vehicles during their business