If you have noticed it seems as if most Zimbabweans are not that big on renting cars. In neighbouring South Africa, it is quite commonplace that some diasporans come for the holidays here using rented cars. Anyways there are major prospects here in Zimbabwe since car rentals are not yet as commonplace. In this article, I shall be discussing how you can start a car rental business in Zimbabwe.
I am going to share with you two broad approaches. The first one is the straightforward one where you buy vehicles and use them to offer car rental services. The second one involves a bit of an interesting story which I will briefly share with you. So I have a buddy of mine who once worked at a certain non-governmental organization as a driver. He is a professional driver because he even underwent training as a professional chauffeur. So he noticed that the organization would always hire vehicles for its operations. He realized that there was money eluding him that he could tap into. He then asked me for advice on how to take advantage of that framework. You see, he was in limbo because he knew he had vehicles. So what did I advise him to do?
I advised him to consider starting a car rental but using a brokerage system. In essence, he did not have to even own any vehicles. He simply had to come up with a business structure where clients come to him looking for vehicles to rent and he links them up to those who have them. He would essentially be a broker but his revenue model would in that both parties pay a fee for him facilitating the car rentals. He did come up with the business and is still establishing himself. This right here could a light bulb moment for someone who has been thinking of a car rental but without the means to own vehicles. So, there you have it that is the second approach you can adopt.
What you need will depend on the type of vehicles you want to rent. The ideal scenario would be to have vehicles across the board i.e. from light motor vehicles to buses and even haulage trucks. You can always start small and strategically scale over time. You will also need a secure and well-positioned base of operations. You would need a spacious land space for secure parking of the vehicles. Vehicles for the rental need to always be in top-notch shape so you would need a workshop for regular maintenance. You would also need a car wash on site for cleaning the vehicles. A professional office will be required too – just one spacious room or two could be enough.
Additionally, you would need a vehicle surveillance system to monitor where the vehicles will be. Several local service providers can help you with that. If you are buying vehicles they need not necessarily be brand new – if you can that is fine. However, you can always get good condition pre-loved vehicles.
You probably might even need a huge staff for this type of business. The other great thing is that you can outsource wherever possible. You will need someone (or two) for administration and operations (you will also be key in this), someone for car maintenance (though this can be outsourced). General hand(s) will also be needed for mundane tasks and things like car wash (again car washes can be outsourced). Basically how many you will need depends on your scale of operation and level of sophistication. My advice to you is that you must have a healthy mix of hired employees and outsourcing.
The biggest startup costs will be the vehicles – if you choose to buy. If you choose the brokerage path then startup costs will not be that high. The only hurdle about the brokerage approach is that it will take lots of work to gain people’s trust and confidence. If you are to buy you will also need a base of operations and that will cost quite some money. The size of your fleet also plays a huge role in determining capital needs.
The market is highly segmented but it is there – you will have to do market research. Probably you might open up new markets where people typically would never rent cars. Advertising, particularly digital marketing, will be instrumental in increasing your brand awareness. Competitive pricing plus favourable terms and conditions will also be pivotal in luring clients.
Important Things To Consider
Car rentals can be a murky world if you drop the ball regarding your operations. I am sure most of you have heard of the Impala Car Rental saga of how one of their vehicles was used in an abduction case. I do not wish to dwell more on that issue but I just want to emphasise the importance of doing proper due diligence. Car rentals involve several legal aspects such as background checks, ensuring clients are licensed drivers and so forth. All this obviously entails contractual agreements with clients so you will do well to seek legal assistance in putting together standard operating procedures (SOPs) for your car rental business. Do not forget the importance of having insurance – critically important in this business. You could also throw a service option where someone can rent both a vehicle and a driver. That can go a long way in ensuring your vehicles will be in safe hands.
This type of business requires to strategically niche. Of course, you can be a general car rental where there is something for everyone. However, if you conduct proper market research you can niche in such a way that you always land premium clients. For instance, imagine dealing with clients such as NGOs, foreign diplomats and the like. All the best in your endeavours to set up your own car rental business!