Do you want to start a scooter rental business? If YES, here’s a complete guide to starting a scooter rental business with NO money and no experience.
Scooters may not be regarded as the same as motorcycles because scooters are more fun and easy to ride on, and it has now become a very popular means of transport and recreation. The scooter rental business which is part of the recreation as well as specialty travel market is one that is growing at a faster rate than the travel industry.
Even though starting this business is advised for entrepreneurs who are already selling motorcycles and scooters, it doesn’t mean you cannot start the business afresh as you can partner with someone that sells motorcycles and scooters in order to give your business the boost it needs.
In starting your scooter rental business, you should understand that you are different from someone who sells scooters for a living, even though you might want to engage in this later.
As one who intends to rent out scooters, it is expected that users will return the scooters within a definite period of time after signing an agreement to that effect. Those who usually rent scooters a lot are tourists who are looking for cheap and yet fun ways they can use to visit several places without having to use a vehicle.
As with any other business that you might be looking to start, it is essential that you have the needed passion and dedication to enable you achieve your goals and objectives. It is also essential that apart from being dedicated to also have a plan as well because this will allow you achieve your intended milestones more easily.
It is essential that you check what you will need to start the business within your locality so that you do not end up running into trouble with the authorities. Ask those who already run the business in your area what your typical checklist should be.
Even though you are going to be basically renting out scooters to your intended customers, it is also important that you have quality helmets that will go with the scooter rental because the helmets help keep your customers safe and secure.
The safety of your customers should be your highest priority and so when buying helmets, try not to buy one size but different sizes that will accommodate all your various customers, no matter the size of their heads.
Aside the equipment that you will need to purchase your scooter rental business, it is also important that you have a sufficient number of scooters available especially during the peak of the season so that you will not disappoint potential customers.
You need to determine if you will need security deposits or not, and lay out your methods of payment as well as what should be done by you and your customers in the event where rental fees are cancelled.
Steps to Starting a Scooter Rental Business
Table of Content
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide What Niche to Concentrate On
- 4. Know the Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 9. Discuss With an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed With ideas & Strategies
- 17. Develop Iron-clad Competitive Strategies to Help You Win
- 18. Brainstorm Possible Ways to Retain Clients & Customers
- 19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
1. Understand the Industry
The Millennial generation has changed the way money is being spent in America as there is more prioritization towards gaining new experiences rather than acquiring material items, as is evidenced in the way that money is being saved in order to go to new places or take part in new activities.
The changing pattern in which Americans are spending their money has had a positive impact on the recreational rental industry which has not only seen the industry growing tremendously, but it has also outpaced other retail and service industries as more people are keen on taking vacations as well as paying for equipment renting in order to enable them experience recreational activities.
The recreational rental industry generated more than $1 billion in 2014 and it has been predicted that the industry will continually see revenue increase at the rate of 5.7 percent every year for the periods between 2014 and 2017. The growth has slightly outpaced the 3.3 percent which was predicted for the retail services industry, therefore putting recreational rentals in top 40 percent of all the retail industries.
The increased popularity of renting as well as continued interest in gaining experiences during recreations would help the industry’s revenue to stay robust in the near future. According to a research report by Kentley, recreational rental firms generated an average of $500,000 in 2013, with most firms experiencing an annual revenue growth rate of nearly 3 percent between the periods of 2010 and 2013.
However, even though it seems as if operators in the industry are having good financial reports, about 51 percent have terrible margins and this is due to the fact that operating expenses keep growing every year and eventually outpacing revenue. In 2015, operating costs per recreational rental firm was at an average of $387,000 per annum.
One reason why only few firms are profitable is because most of the firms are focused on growth as they are using the revenue generated to provide new services or expand their businesses.
In 2014, the number of recreational rental firms grew by 2.8 percent and forecasts for the next five years (2014 to 2019) has it that the growth average for firms in the industry will remain under 3 percent, even though the number of rental establishments will grow by at least 3 percent and will continue to grow by 2.3 percent every year for the next five years (2014 to 2019).
It is expected that the scooter market and electric motorcycles will generate more than $55 billion by 2024 according to Global market insights, Inc. It is expected that the market size will continue to increase due to the fact that scooters have environmental benefits over others that are powered with gasoline.
Also, they are vibration-free which means there are fewer parts moving. Another factor is the fact that it does not require much in areas of maintenance and it is more reliable which is why it is increasingly popular amongst consumers.
Electric scooters can be used for both commercial and personal use and the fact that it is convenient and allows for easy mobility is why the urban population usually prefers them over transport modes like bicycles.
The regulatory bodies in several countries are encouraging the use of eco-friendly vehicles such as scooters by proving operators with a tax concession. The ecosystem factor is why a large number of players are not only developing efficient batteries in order to ensure high performance, but also looking to make them as eco-friendly as possible.
According to Spinlister, the local American shop has not only been in decline since the year 2001, revenues from sectors like rentals have also been decreasing as well because even though more of the Millennial generation prefer to rent as opposed to owning.
Several factors have been stopping the industry from being on top and this is due to the fact that rental stores are spending more in keeping their businesses afloat especially when accidents occur and the scooters will need to be repaired leading to loss of revenue.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demography and psychographic composition of those that require the services of a scooter rental business include but are not limited to tourists. This is because tourists rent scooters in order to visit new places as well as gain experience.
The category of those that are likely to rent the scooters are the Millennial generation who are above their twenties going down to their mid-forties.
3. Decide What Niche to Concentrate On
Starting a scooter rental business doesn’t really give one the chance of offering niche services. Niche ideas are usually delved into by entrepreneurs because they are looking to expand their services while also generating more revenue for their business.
Engaging in niche services also allows the entrepreneur to stand out from other competitors. It is however important that you research on what niche ideas are available within your industry and how much revenue you are likely to generate if you go into it.
Some of the niche ideas that are available within this particular business include;
- Scooter rentals
- Scooter sales
- Scooter accessories sale
- Scooter repairs
- Wheelchair and mobility rentals
- Guided scooter tours
The Level of Competition in the Industry
Because you are going to locate your business in an area where you are likely to get a lot of customers, it is safe to assume that you will have a lot of competition not only from other scooter rental businesses but also from other rental businesses as those who mostly rent scooters are tourists and they will be looking to try as many experiences as possible that will not be limited to just scooters.
What customers are however on the lookout for when patronizing a scooter rental business is that the scooters are well maintained so as not to have any mechanical breakdowns when they are using it. Customers are also looking to rent a scooter that they can easily afford or that will allow them get back their fees without much hassles if they cancel.
The Millennial generation has opened the door for the recreational rental industry to boom and so therefore if you are looking to start your scooter rental business in the United States of America, you should expect to face a lot of competition from other scooter rental businesses especially in the area where you are looking to run the business.
4. Know the Major Competitors in the Industry
Even though most scooter rental businesses are popular in the area in which they are located, those that are more popular than their counterparts are those that are in areas where there are more tourists’ visit.
There are several factors that make a business become popular and some of the major factors are; quality of service, quality of customer care and affordability. Some of the well-known scooter rental businesses in the industry depending on their location are;
- Yatchy Rentals
- EcoReco e-scooter
- Scoot Around
- Rental Motorbike
- Beach Scooter
Scooter rental operators have increasingly started using technology to provide convenience to their customers. This has caused most of the operators to streamline their membership procedures in order to make scooters available to customers within the shortest amount of time.
The high penetration of the internet as well as increase in smartphone users have made this possible.
Globally, the market is being fueled by an increase in how many tourists now prefer to use the roads during their travel in places like America and India. This has pushed the CAGR to nearly 5 percent.
Even though the Millennial generation has popularized the recreation rental industry, revenue hasn’t increased so much for the industry as operating expenses has been threatening profit margins.
No matter how well kept a scooter is, accidents are bound to happen and this means the time spent by the mechanic in trying to repair damages will cause a loss of revenue on that scooter.
Even though the recreational rental industry has become quite popular, scooter rentals aren’t getting the largest share of the market as most tourists prefer to rent boats in order to be able to engage in water sports. In 2013 alone, more than 88 million people participated in some form of water sports.
5. Decide Whether to Buy a Franchise or Start from Scratch
One decision that you will need to make when starting your business is whether to start from scratch or buy a franchise. While each decision has its pros and cons, it is best that you go for that which will allow you achieve your intended goals and objectives quicker. Buying a franchise is not a bad idea especially as it helps the entrepreneur have a quicker start compared to those that will be starting from the scratch.
When buying a franchise, you also buy mentorship and guidance which enables you to not only learn the ropes of the business faster but you also won’t be in control of certain aspects such as marketing and others that can be overwhelming for an entrepreneur that is just starting the business.
If you are however looking to start from scratch, you can either start totally from scratch or you can buy an already existing business structure. The latter will be to your advantage because you do not have to worry about getting certain equipment or worrying about location for your business.
Also, it makes it easier to approach investors who prefer to loan money to a business that is already in existence or at least has structures in place than that which is still a business idea. Having a business plan in place will help you start your business easily as this will act as a guide to certain actions and decisions that you will make.
6. Know the Possible Threats and Challenges You Will Face
In every business environment, threats and challenges exist and how you handle them determines how ready you are for the business you are looking to start up.
Even though it is important to be prepared for whatever challenges you might likely face, not all threats and challenges can be easily handled and so when this happens, the best you can do is wait for the moments to pass while remaining optimistic.
Some of the threats and challenges that you are therefore likely to face when starting your scooter rental business are; having to deal with competition from other existing scooter rental businesses, having to deal with accidents and repairs from damaged scooters, having to attract customers, and the start-up capital required to start the business.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When looking to start a business, knowing the legal entity that would be best for your business is necessary because of the amount of impact it can have on the business.
There are certain businesses that can be run without the entrepreneur being bothered about what kind of legal entity would be suitable for it. The scooter rental business is not one of such businesses due to the amount of risk that the business carries.
There are majorly five kinds of legal entities that are available to entrepreneurs in the United States of America and they are sole proprietorship, partnership, Limited Liability Company (LLC), S Corporation and C Corporation.
When looking to choose which legal entity will best suit your business, you can use certain deciding factors such as ease of setup, ownership and control, flexibility, taxation structure and degree of liability or you get in touch with an attorney who has a thorough knowledge of the industry you are into to help you out.
While the sole proprietorship might look like the easiest legal entity to go with especially as most entrepreneurs in the United States usually go for it; this might not be the best legal entity for your business due to the amount of liability that comes with starting or running this kind of business.
While the partnership kind of legal entity is not bad, it also exposes you and those you are looking to partner with to liability issues and might also serve as a limiting factor when you are looking to source for a loan for your business.
The LLC kind of legal entity is one that shields the owner to a certain degree because the business is seen as a separate legal entity from those that own it. This means that liability is limited for the owners.
Even though this kind of entity is regarded to as a state creation, it is usually preferred by entrepreneurs due to its flexibility and the fact that tax paid on personal income return is same as the sole proprietorship.
The corporation is very similar to the LLC in terms of liability; however it is regarded as a more formal legal entity. Entrepreneurs using this kind of legal entity are often in certain kinds of businesses that will allow them raise stock to the general public.
There is the C corporation and the S corporation and the latter is much more similar to the LLC in terms of taxation and flexibility than the former.
8. Choose a Catchy Business Name from the ideas Below
When looking to start a business, it is important that you get a suitable name for your business because this is how your business will be identified by your potential customers, your competitors as well as other stakeholders within the industry.
Choosing a suitable name for one’s business is nothing easy as you will need to ensure that your business name is memorable, catchy and indicative of the industry that you are in.
Below are some of the catchy business name ideas that is suitable for your scooter rental business;
- Bushy trail scooters
- Scooty rentals
- Sprint scooters
- Strike Scooter Rentals
- Swing Scooters
9. Discuss With an Agent to Know the Best Insurance Policies for You
Insurance for scooter rental business might not be so easy to find because of the risks associated with the activity of riding a scooter.
Therefore, with the difficulty that comes with finding the right insurance policies for your scooter rental business, you might need to take your time in looking for the right insurance agent or broker that will help point out carriers that will help in carrying the risks that comes with running your business.
Ensure that whatever carrier you choose is one that will not only help manage your risk but also help your business to keep flourishing. Below are some of the insurance policies that you might need to buy when looking to start your scooter rental business in the United States;
- General Liability Insurance
- Property Insurance
- Motorcycle Insurance
- Workers’ Compensation Insurance
- Casualty Insurance
- Umbrella Policy
- Mechanical Breakdown
- Professional Liability Insurance
- Product Liability Insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
The scooter rental business is one where you will rent out scooters to those that need it for a short or long term period and therefore it will not require you to buy any sort of intellectual property protection. If however you feel it is vital to protect your company name, logo and any other concepts you deem worthy, you can get a lawyer to help you out but you should note that entrepreneurs in this industry do not consider this a priority.
11. Get the Necessary Professional Certification
Even though there might be need for you to have little technical knowledge so that you can carry out light maintenance; all that is needed for you is to be able to have the start-up capital with which to start the business. There is therefore no need to have any professional certification when starting or running your scooter rental business.
12. Get the Necessary Legal Documents You Need to Operate
When looking to start your scooter rental business, it is necessary that you get your legal documents in place because it is necessary to run your business without any hassles.
If you do not know the documents you will need to start your business, you might need to talk with others running the kind of business that you are in or get in touch with an attorney who knows what you will need in order to get the right documents that you will need to start your business with. Below are some of the legal documents that you will need to start your scooter rental business;
- Sales Tax License
- Business Insurance
- Certificate of Incorporation
- Operating Agreement for LLC
- Local Business License
- Rental Agreement
- Business Plan
- Employer Identification Number (EIN)
- Federal Tax Identification Number (TIN)
13. Raise the Needed Startup Capital
Having start-up capital for your business is very important because it is the capital that will be used to run the business and generate revenue till the business starts paying for itself.
Sourcing for start-up capital is not easy for any entrepreneur which is why it s important to have a business plan at hand in order to be able to convince investors on why investing in your business will be of huge benefit to them. Below are some of the financing options that is available to you for your scooter rental business;
- Generating part of your start-up capital from savings or sale of stock
- Sourcing for soft loan from family members and friends
- Getting loan from your business partner or private investor
14. Choose a Suitable Location for your Business
In any business that any entrepreneur is looking to start, location is always such a huge deal which is why a great deal of thought is given to where a business is to be located because of the degree of impact the location has on the business.
Most scooter rental businesses are usually located close to a beach or close to the hub of tourists since these are the ones that are more likely to rent a scooter than the locals.
If you live in an area close to the beach and do not have sufficient funds for your business, then you might need to partner with a local hotel and place signs in vital places in order to get the attention of your potential market depending on the scale of your business, but if you will need to rent a store, ensure that it is as conspicuous as possible.
When choosing a location with which to run your scooter rental business, ensure that it is in a suitable location that will attract a lot of tourists and ensure that the facility you intend to choose has a large parking facility so your scooters can be stored and also seen by your potential customers.
It is essential that the location you intend to choose for your business is one that has a storefront so that you can easily display other materials for sale and also meet and assist the customers who will patronize the store.
If you aren’t sure of the right location for your business, ensure that you contact a commercial real estate agent with knowledge about your kind of business to help you choose a location that will be most suitable for your business.
15. Hire Employees for your Technical and Manpower Needs
Even though tourists are usually regarded as the major customers for these kind of businesses, there are also locals that will be looking to rent scooters every once in a while for various reasons and so it is necessary that you have designed your business in a way that will allow you to cater to the different customers you are likely to get.
While this is a revenue generating business, you should also be aware of the expenses that you will incur in order to run the business to a reasonable standard.
Even though scooters are generally easy to operate, there will still be a number of your customers getting into accidents or damaging the scooter, and these are expenses and situations that you should be prepared to face at every moment the business is operational.
It is important that you purchase your scooters from a reputable dealer so that you are able to reach them and amicably settle any complaints that might arise from the scooters you have purchased.
To get reputable dealers, you might need to conduct a research online or check with your local Chamber of Commerce. Ensure that the scooters you have purchased are enough to start your business and run it successfully.
If you are going to be running a medium or large scale operation, it is vital that you build a solid business structure where you will hire dependable hands to help run your business efficiently.
Even though you will not need to employ much, you will still need to employ an office manager, front desk officer, marketing and sales executives, account officer and security guard. From the above break down, you will need at least 5 key people to run your scooter rental business successfully.
The Service Delivery Process of the Business
Once you have decided on starting your scooter rental business, it is important that you apply for a business license and also find out the necessary documents and licenses you will need to start your business and run it with as less hassles as possible.
Once the legal ground has been taken care of, knowing reputable dealers from which to purchase your scooters is necessary so that you can have a warranty on the products that you have purchased.
Decide what packages you are going to offer your potential clients and what the payment structure would be like plus how you intend to handle cancellations.
16. Write a Marketing Plan Packed With ideas & Strategies
Marketing your scooter rental business successfully might not be easy as it would be for other businesses because a large base of your potential market are those that have no idea whatsoever about your business and so one of the easiest ways you can catch their attention is ensuring that you are located in a place that is conspicuous and has ample traffic.
Even though this might likely cost more, it will allow you generate enough revenue to cover your start-up and operating costs. Marketing, if not carefully handled, can become an avenue for a business to waste money on campaigns without getting customers back in return.
This is why it is oftentimes important to have a marketing plan in place. Marketing is more than an avenue to generate funds, it is also a way entrepreneurs can generate the needed awareness for their business and then convert this awareness to money.
Most entrepreneurs starting out either get a marketing consultant to help them with crafting the right marketing strategies or hire marketing executives that understand what goals they are trying to achieve to help out in creating, reviewing and modifying strategies.
The internet has also made it very easy for entrepreneurs to put their businesses out there in order to be able to gain more attention from the intended target market especially with the rising use of smartphones. Below are some of the marketing ideas and strategies that can be used for this particular business;
- Ensure that you partner with hotel and tour employees to help refer your scooter rental business to potential clients
- Ensure that your scooter rental business is listed in local business directories
- Create attractive fliers and brochures and have them displayed as various strategic locations such as local hotels, restaurants, bed and breakfast establishments as well as other tourist attraction sites
- Create a website and display pictures of your scooters, your scooter packages, hours of operation plus other vital information
- Ensure that you use social media platforms such as Facebook and Twitter to constantly market your scooter rental business
17. Develop Iron-clad Competitive Strategies to Help You Win
The scooter rental business usually peaks during summer when tourists usually visit a place, state or country and so this means that you may likely not be the only scooter rental business around and therefore will need strategies that will allow you to not only attract potential customers but also enable you to compete against your competitors.
If you do not have any strategies in place to win over your competitors, then it is likely that you will lose a lot of customers and revenue.
Some of the competitive strategies that you should therefore have in place when looking to start in this particular business include; ensuring that you have varying rental packages for your customers, ensuring that your rates are fair and that you offer value added services to your customers as well.
18. Brainstorm Possible Ways to Retain Clients & Customers
Attracting customers for your business is one way to generate revenue for your business, which is why there are plentiful strategies that help an entrepreneur easily attract the needed clients for their business.
However, while customer attraction is key to the survival of a business, ensuring that a high number of them are retained is key to continued growth and survival of the business. Even though most tourists might not come back to rent your scooters, once they are satisfied with your services, they can easily refer others to your scooter rental store.
It is a known fact that businesses that retained a high number of their customers end up spending less than those that continually lose customers.
Some of the reasons why customers usually leave a brand for another is poor quality of service, terrible customer care, high charges and a host of other factors, so it is in the interest of your business to ensure that your services are top notch and that your rates are competitive enough.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
In every business that is started, entrepreneurs often have to seek for ways they can continually make their business visible. This is because the more visible a business, the higher the chance of increasing its revenue generation. Already successful companies understand how much being visible helps their business and so always strive to set aside money to continue to remain visible and positively communicate their brand to their potential target market.
Like all important decisions that you will make when you are starting your business, it is important that you have undertaken a thorough research about your target market in order to know what strategies will most likely suit them and so that you do not waste time and resources on strategies that will not work for your business.
Below are some of the strategies you can use to boost awareness and create a corporate identity for your scooter rental business;
- Ensure that you have flexi banners in strategic places in order to create awareness for your business
- Offer other services such as guided tours in order to increase awareness for your business
- Ensure that you create a website and then hire someone that can promote your website so that it can rank tops in search engines
- Distribute handbills and fliers in various strategic locations where your customers are likely to congregate
- Make use of your social media platforms such as Snapchat, Instagram and YouTube in order to increase publicity for your scooter rental business