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1.0 Executive Summary
Exotic Car Rental Service, LLC (“the Company”) is a Phoenix, Arizona business founded by Steve Maldoro. The business will specialize in renting high-end sports cars and luxury vehicles within this market. At this time, the Company is seeking $1.5 million in order to establish its operations. The business will earn substantial per diem fees from these rentals.
1.1 The Services
From its location in Phoenix, the business will provide its customers with access to high-end sports cars among brands including Ferrari, Porsche, Lamborghini, Audi, and Lotus. In regards to luxury sedans, the Company will have numerous Rolls Royce and Bentley vehicles available. On average, the business will rent these vehicles for $900 per day.
In addition to the base rental fees, all drivers will be required to purchase insurance. Drop off and pickup fees will be incurred among renters that want the vehicle delivered to their destination and picked up when the rental period is over.
The Company will only rent vehicles to people that are over the age of 30. The third section of this document will further discuss the operations of the business.
1.2 Financing
At this time, the Company is seeking $1.5 million in order to establish operations in Phoenix. The funds will be allocated towards the following:
• Location development
• Deposits for vehicles
• Working capital
• Initial marketing
It should be noted that the business will typically lease its fleet of high-end vehicles. This will reduce the overall capital expenditure of the business. From time to time, the business will directly acquire a high-end vehicle if it can be acquired under its market value. Moving forward, Exotic Car Rental Service may acquire a line of credit to better manage its cash flow while also facilitating fleet acquisitions.
1.3 Mission Statement
Exotic Car Rental Service’s mission is to provide an unparalleled experience for customers that want to experience the excitement of driving a supercar.
1.4 Management Team
Steve Maldoro has more than 15 years of experience in the field of automotive rentals and sales. The Founder will be able to develop Exotic Car Rental Service into a widely recognized exotic car rental agency within the Phoenix market.
1.5 Sales Forecasts
1.6 Expansion Plan
During the first three years of operation, Exotic Car Rental Service will make substantial reinvestment into its operating infrastructure in order to boost revenues. The Company will make continued acquisition of new high-end vehicles. After the third year of operation, Management may develop additional locations among other major market areas in Arizona.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Exotic Car Rental Service, LLC. The business is a limited liability company domiciled in the State of Arizona.
2.2 Required Funds
An equity investment of $1.5 million is needed to launch the operations of Exotic Car Rental Service. The funds will be allocated as follows:
2.3 Investor and Management Equity
An investor will retain a 50% ownership interest in the business.
2.4 Exit Strategy
Given the highly predictable stream of high-margin revenue generated by the business, the Company could easily divest the business, via an asset sale, to a third party. The Company would have a full valuation completed. Management will work in tandem with a business broker, certified public accountant, and business attorney to manage the divestiture. This is not expected to happen for a substantial period of time.
3.0 Operations
As stated in the executive summary, the business will offer its customers an extensive line of premium vehicles for daily usage. Management is currently working with dealers of Bentley, Ferrari, Lamborghini, Lotus, Maserati, Porsche, and Rolls-Royce vehicles to obtain preferential pricing. In order to properly control cash flow, the business will lease vehicles for a 36-month period in most circumstances. The business, for luxury sedans, will typically purchase these vehicles outright or through specialty financing.
In order to protect the value of the Company’s fleet, the business will implement a number of protocols and procedures. Foremost, the business will only accept renters that are over the age of 30. All drivers will be required to have their own insurance while concurrently purchasing insurance through the business as well. Drivers will be required to put down a $2,000 deposit (via a credit card), which will be refunded when the vehicle is returned.
The Company will take pride in providing its customers with a concierge level of service. To that end, the business will offer drop off and pick up services (which will incur a $200 fee).
As it relates to maintenance, the Company will have numerous service contracts with dealerships throughout Phoenix that will ensure that all vehicles are in proper working order at all times.
As will be discussed later in this document, the Company has developed an extensive marketing plan that will ensure that the business operates near 100% capacity at all times. This will include marketing through several online channels while maintaining ongoing relationships with travel agents throughout the country.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
At this time, the economy is doing very well. As a result of the monetary policies implemented by the Federal Reserve, interest rates and the rate of inflation are now declining. This will assist Exotic Car Rental Service with more seamlessly acquiring capital to finance its ongoing fleet acquisitions.
It should be noted that any potential declines in the economy will not majorly impact the Company’s ability to generate revenue from its high-end vehicle rentals. The business will generate substantial gross margins from its operations. Additionally, the Company will target travelers to the Phoenix market area on a nationwide basis.
4.2 Industry Analysis
There are 2,000 vehicle rental agencies that specialize in providing exotic and high-end vehicles. This sub-segment of the vehicle rental market produces $4 billion per annum. The industry employs 8,000 people.
The growth of this industry will remain similar to that of the economy as a whole. Although renting high-end vehicles is a new part of the overall car rental agency industry, the growth of online platforms that facilitate these services has become mature.
4.3 Customer Profile
Exotic Car Rental Service, LLC will use the following demographic profile when marketing the Company’s high-end vehicle rental services:
• Annual household income exceeding $150,000
• Will spend $2,000 to $3,000 on their vehicle rental
• Lives within 20 miles of the Company’s Phoenix operations location
• Among travelers, is staying in Phoenix for three nights
Any person that has an immense interest in high-end vehicle rentals is a potential client for Exotic Car Rental Service. The business, as will be discussed in the next section of this business plan, will use multiple online-driven channels in order to ensure that the fleet operates near 100% capacity.
4.4 Competition
In any major metropolitan area, there are a number of companies that provide exotic and high-end vehicle rentals. Many standard car rental agencies have entered this market to a limited extent as well. The business will maintain a strong differentiating factor given that the business will provide high-end sports cars and sedans that have all been produced over the past three years. Additionally, the business will maintain a further differentiating factor via the pick up and drop off services offered.
5.0 Marketing Plan
Exotic Car Rental Service, LLC will use numerous regional and national level marketing strategies in order to ensure that the business’ fleet has near 100% usage at all times. Foremost, the business will maintain a content-rich, ecommerce enabled platform that seamlessly allows users to make reservations for vehicles. The business will also engage in direct outreach programs among travel agents and travel planners.
5.1 Marketing Objectives
• Foster ongoing relationships with travel agents that have wealthy clients traveling to the Phoenix market area.
• Engage in regional SEO in order to have the site appear when searches for exotic car rentals are conducted.
• Leverage social media influencers that will use the service and will create a video for their experience.
5.2 Marketing Strategies
Most importantly, the Company’s website will showcase the entire fleet of the business. The business will showcase images, from multiple angles, showing the Bentley, Ferrari, Lamborghini, Maserati, Porsche, and Rolls Royce vehicles offered. The business will also have a number of videos that showcase each vehicle. These videos will be shown on the website, the Company’s social media pages, as well as on YouTube and Tik Tok. The platform will feature reservation technology. Additionally, the website will allow renters to upload images of their drivers’ licenses and insurance policies. This will streamline the onboarding process when a customer comes to pick up their vehicle.
The Company will foster and maintain ongoing relationships with travel agents that will place their wealthy clients with the business when they are traveling to Phoenix. The business will provide a commission of 15% on all bookings made by third-party travel agents.
As it relates to search engine optimization, the business will coordinate these efforts with a qualified SEO firm that will conduct these operations on both a regional and national level. This will ensure two things. First, that residents of Phoenix and its surrounding areas can find the business when they want to rent an exotic vehicle. Second, on a national level, it will ensure that people traveling to the area are able to find the website quickly. It is expected that SEO results will take three to five months to become effective.
For social media, the Company will maintain page on Facebook, Instagram, Tik Tok, and YouTube. Ongoing photos and videos of the vehicles will be uploaded on a weekly basis. The business will also offer specialized discounts through these platforms during slower seasons.
Management will also hire a Phoenix based social media influencer that will film their experience with Exotic Car Rental Service, LLC. Once completed, the influencer will upload the video to their social media channels. This will further increase brand name visibility.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• The Company will acquire $1.5 million via a private investment.
• Exotic Car Rental Service, LLC will have a CAGR of 15%.
• A majority of this capital (80%) will be used for vehicle acquisitions.
7.2 Sensitivity Analysis
Exotic Car Rental Service’s revenues are moderately sensitive to a potential economic recession. The services offered are considered a luxury. The Company will address these risks by implementing highly controllable operating costs while conducting marketing on a national level. Phoenix is a highly trafficked tourist destination, which will further abate the economic risks of the business.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
Exotic Car Rental Service SWOT Analysis
Strengths: Exotic car rental services are able to generate extremely high gross margins and substantial capitalization rates from the continued rental of their high-end vehicles. These businesses often charge $800 to $2,000 per day for usage of a vehicle, which is substantially higher than that of any other general car rental agency. Additionally, as these businesses have substantial assets, these companies can easily acquire ongoing rounds of capital in order to fuel their growth. In many cases, these entities are able to acquire leases when securing their underlying inventories of exotic vehicles. The operating costs for these businesses are highly controllable as well.
Weaknesses: These businesses can face pressure on their revenues when the economy is struggling. Renting a high-end or exotic vehicle for a day is a substantial expense. In the event that there is an economic recession, the Company may struggle to find people that want to rent these vehicles. However, these risks can be abated by developing ongoing relationships with travel agencies. This will continue to allow for greater occupancy rates. Additionally, many exotic car rental services are located in population dense areas that have wealthy residents.
Opportunities: Foremost, exotic car rental services are scalable businesses. They can easily integrate additional inventories into their operations while also expanding their market reach through both social media marketing and search engine optimization. The costs of establishing a new distribution location are relatively low as compared to the anticipated revenues of these enterprises. Although they do not come onto the market very often, some exotic car rental services can be acquired once their respective owners decide that they want to retire or move into new opportunities. These businesses can also continually expand the capacity usage rates by partnering with general car rental agencies via referral agreements. Ongoing referral relationships with travel agencies are also imperative to the continued growth of these businesses. Finally, there are now numerous online portals that are available for consumers to reservice high-end vehicles for rent.
Threats: Inflation is the primary issue that these businesses face given the ongoing need for automotive loans and leases in order to acquire underlying inventories. As discussed above, a potential economic recession can also cause issues for these businesses. Ongoing competition is a more a modest threat for these entities given their unique nature. There are usually on a limited number of exotic car rental agencies in any given market (including large metropolitan areas).