Entrepreneurs consider a variety of ideas as options for starting their own business. Someone seeks to occupy a completely new market segment, while others are ready to share profits with competitors in an already researched area. The limousine rental business belongs to the second option, although the competition in this area is not high.
Complexity of the business process
The main problem for a novice businessman planning to open a limousine rental service is a fairly high "threshold of entry". The cost of a used limousine on the Russian market is rarely less than two million rubles - for this money, in principle, you can buy several inexpensive new cars for rent. On the other hand, the price of renting a limousine with a driver is also much higher: if an ordinary car can be rented for one to two thousand rubles a day, then a limousine will cost two to three thousand rubles per hour. Nevertheless, it is easy to calculate that without taking into account the driver's salary, fuel costs, depreciation of the car, taxes and related expenses, just to recover the cost of purchasing a limousine, it must work about two thousand hours.
Even if we assume that your limousine will "work" for two hundred hours a month (which is 6-7 hours every day), it will still take at least a year before your investment will pay off. In reality, however, it is worth counting on a period of two years or more, since the “net” profit is likely to be much less.
Among the most extravagant offers on the limousine rental market is a car with a three-meter pool in the cabin. In Russia, such machines are just beginning to appear.
Another difficulty lies in the fact that the number of potential customers for such a service is limited. This is especially true for small towns, so before deciding to open a rental, you should carefully study the market and competitors. In 70% of cases, limousines are ordered for weddings, so try to find out how many weddings are registered by local registry offices per month. Even in the case of a complete absence of competitors, it makes no sense to expect that all newlyweds will want to use your services: someone will not be able to afford them, and someone will completely decide to do without the solemn part of the ceremony. If there are competitors on the market, then your share will be even less.
Sometimes a limousine is rented directly for a celebration (for example, a birthday party). In such cases, customers are usually interested in spacious cars for 15-20 people.
Nuances of big cities
In large cities, as a rule, the market is divided between large firms that have their own fleet of dozens of limousines. Naturally, it is almost impossible to compete with them, especially considering that the supply slightly exceeds the level of demand. Companies are trying to attract customers with additional options, original options, discounts and promotions, moreover, they can afford to provide customers with a choice of several cars. Of course, if your starting capital significantly exceeds the minimum level, you can purchase several cars at once to increase your competitiveness, but this step is associated with certain risks.
Don't forget that it will take time and additional advertising costs to get the attention of potential tenants. Nevertheless, the limousine rental business can become a profitable enterprise if you develop it for a long time, constantly renew the car fleet and do not wait for super profits, especially at first.
