The RV rental business is a very profitable business. If you own an RV that is lying idle, you can start the business with almost no investment. However, even if you don’t own an RV, you can buy or lease one and start the business.
What is RV Rental Business?
RV stands for recreational vehicle. Renting an RV is a common practice among travelers, who prefer a home-like feeling as well as amenities while traveling. It is also popular among campers or for family vacations.
The demand for RVs has seen a rise in the last few years. If you own this type of vehicle, renting it out can fetch you good profit returns.
Is RV Rental Business Lucrative?
RV rental business makes a good profit. The amount depends on the number of RVs you are putting on rent. The amount of profit may range between $10,000-60,000 per year.
According to IBISWorld, the RV rental business is showing a stable growth trend for the last 5 years and it will continue to grow.
Statista also predicts a steady rise in the revenues earned from the RV rental business.
With the increasing popularity of road trips, the demand for RV rental has also increased. Therefore, this is your opportunity to earn good profits from the business.
Keep in mind, you need to do good research, know several things and make preparations for your RV rental business to be successful as well as hassle-free.
RV Rental Business Plan Guide for Beginners
Here are the 10 steps to start a profitable RV rental company:
1. Find a Suitable Location
Choosing the right location is a key factor in the RV rental business. Don’t start your business near popular camping spots because there are already many players there. Instead, go for smaller towns or cities.
It is a good idea to start a business in your home town. This is primarily because you must be having certain personal contacts as well as acquaintances there. However, you have to see the demand for RV rentals there.
Whichever location you choose, remember one thing. Your RV must be easily accessible to your customers. That gives you great mileage.
2. Understand the Market
Knowing the market and the demand for your business needs a lot of research on your part. You have to know the demand for RV rental services nearby. Furthermore, you have to take into account the competitors in the market.
Compare the rates of running rental businesses. Keep in mind; it will be better for you to start at a lower rate. However, don’t make the rates too low. That will question your credibility and service standard.
Research the amenities offered in the RVs. Try to give some value additions to the amenities you offer. That will set you apart.
There are different models and types of RV according to the number of passengers to accommodate. Study the type which has the greatest demand in your area.
Different agencies take your RV and put them for rent. Consider this option and the viability in your case. That is, whether you should start your business independently or through any agency.
3. Create an RV Rental Business Plan
Make a thorough and exhaustive business plan for your RV rental business. Work on every minute detail along with the projections in your business.
Your business plan must have the details about:
- Funds needed to start the business
- Source of fund
- Expense heads
- Pricing plan
- Projected Profit
- Marketing Plans
Take the help of experts in preparing the business plan. The experts include finance experts, bankers, tourism professionals, and if possible the owner of an RV rental business.
4. Name your RV Rental Business
After preparing the business plan, you have to finalize the name of your business. Use your thought and creativity in choosing the name. Take the opinions of others. Finally, choose a simple but meaningful name.
In addition, Get a website domain name for your business. Then launch your website because the website helps to make your name popular along with getting business online. Also, get a trademark on your business name.
Learn More: How to Name Your Business
5. Register Your Business
After the name is finalized, you have to register your business. There are different forms of business organizations. Check with the concerned authorities of your state or country.
For example, if you are living in the United States, forming an LLC will be the good best option for your RV rental business as it protects your personal assets from business ones.
6. License, Permits, and Taxes
Register your RV rental business for the necessary license and permits needed both at the federal as well as state levels. The license fees may be different in each state.
Your RV rental business also needs to pay the taxes applicable to it. As an example, in the United States, it is a must to have an EIN for running a business.
7. Buy a Business Insurance
Since your RVs will run on different roads and be used by your clients, there are many risk factors. Therefore insurance is very essential for your business. You will need several kinds of insurance for the safety and security of your business.
Your RV rental business will need insurance coverages like:
- General Liability Insurance
- Worker’s Compensation Insurance
- Commercial Property Insurance
- Product Liability Insurance
- Commercial Umbrella Insurance
8. Open a Business Bank Account
Open a bank account in the name of your RV rental business and also get a business credit card for the sake of convenience.
Seek the assistance of an experienced accountant for maintaining the accounts of the business.
9. Calculate the Expenses
The main heads of expenditure in your business include the expenditure on maintaining the RV, repair of various parts, licenses, permits, taxes, insurance premiums, salaries, making and maintaining the various amenities inside the RVs, advertising, publicity, etc.
Pay special attention to the interiors of the RVs. Make it beautifully decorated with all the amenities needed for luxurious living. It should be well-furnished with good-looking and convenient furniture. Use good bedspreads, linens, towels, toilet accessories, and high-quality utensils and tableware.
Remember, the interior of the RV should be impressive as well as luxurious, much like a suit of a renowned hotel.
10. Develop a Marketing Plan
The profitability, as well as the expansion of your RV rental business, depends largely on your marketing strategies. Since RV rental is a popular business, you have to chalk a well-planned marketing strategy.
a) Advertising in Portals
There are various online portals that give information about RV rental services. People consult them before booking an RV. Therefore, it is advisable to list your business in such portals and get noticed. Regular advertisements in the portals will make you popular and help you to get business.
b) Other Advertisements
Along with the online portals, advertise your RV rental business in newspapers, radio, and TV. Also use banners, hoardings, and posters at prominent places. Distribute flyers and pamphlets at residential areas and travel and tourism offices.
c) Create an Online Presence
Websites are very important for your publicity and business growth. Many people will know about your business through the website. Design a good, user-friendly website with good pictures along with interviews of satisfied customers. Online booking, as well as payment options, should be there.
d) Use Social Media
Social networking platforms are very effective tools for publicity. Create pages in the name of your RV rental business on popular social media like Facebook, Instagram, Twitter, and others.
Update the pages and invite the opinions of people on various issues including the facilities offered by your RV. Try to implement the suggestions as much as possible.
e) Personal Visits
Personal visits to different corporate and tourism offices are also a good marketing drive. Distribute colorful brochures on your RV rental business to key persons. Keep regular contact with them.
RV is also used in different social gatherings or festivals along with sports events. People prefer them for guest accommodation over hotels. Therefore, personal contacts will earn you more business.
There are different types of tour operators and travel clubs in the towns or states. You have to visit them regularly. This will help to get more clients and thereby expand your business.
Sponsorship often helps in publicity. You can go to sponsoring travel-related events like a seminar, exhibitions, etc.
These are the necessary steps you should follow in starting your RV rental business. Even after this, you must be having some questions about the business. Let us see them.
Frequently Asked Questions on RV Rental Business
How Much Does it Cost to Start an RV Rental Business?
In the first place, the cost of running this business varies according to the number of RVs you have. However, if you start with a used RV the start-up cost may be approximately $ 30000-$35000.
What is the Profit Margin in RV Rental Business?
The profit margin depends on the type of vehicle and the number of passengers. On average the RV rental charges are between $100-$300 per night. On average, the yearly income of an owner of RVshare brings is around $20,000.
Should I buy a New RV for business?
It is not necessary to buy a new RV for business. You can buy a used vehicle and do some repairs as well as a facelift. That will cost you much lesser than a new RV.
What are the Popular RVs?
The popular RVs include Motorhomes (Class A, B, and C), Fifth Wheel, Travel Trailers, Camper Trailers, Campervans, Pop-up Campers, Toy Haulers, etc.
These are the important points about the RV rental business. Since it has an increasing demand for traveling along with festivals or events, you will be able to get good returns on your investment.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their businesses.