Electric scooter rental business plan in 2023
Table of Contents
All the information collected in this article is recommendatory and is not a ready-made example of a scooter rental business plan. Since 2017, RexSoft has been developing various solutions for the electric scooter rental business and helping entrepreneurs from all over the world build a successful business.
All calculations in the electric scooter rental business plan are made on the example of a contingent scooter sharing business with a fleet of 50 scooters, the location of the business is a US city with a population of 60,000 people.
Products and services
The electric scooter rental provider offers a scooter rental service to the population of a city in the USA (North Carolina). The company has a fleet of 50 scooters with a speed limit of 25 km/h and a range of 35-40 km. Allowed routes and parking areas for scooters are agreed with local government bodies. Renting scooters is a solution for moving around the city, avoiding traffic jams. Electric scooters are an ecological means of transport that reduces air and environmental pollution.
Everyone can use the scooter rental service thanks to the client application. Before using the scooter, the user registers in the application, familiarizes with the rules of safe scooter use, and replenishes the balance of his account. The renting scooter cost consists of the payment for unlocking (unlocking fee of 1 USD) and rate per minute - 0.15 to 0.30 USD.
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Market analysis
In the city where the start of a scooter rental business is planned, this type of transport (scooter rental) is not available, so the implementation of this project is an alternative to city transport and taxis. The chosen place has many educational institutions and cultural monuments that attract young people from other cities and tourists. The target audience of this business is students, tourists, city residents aged 18-45.
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Operations Plan
The operational plan consists of 2 stages: starting a scooter rental business (2 months) and operational activities. At the first stage, the following actions are planned:
- Business registration, obtaining the necessary permits for business
- Purchase of scooters, additional batteries, necessary spare parts (headlights, stops, wheels, humpers, brake systems, other parts with high wear and tear)
- Setting up electric scooter sharing software under the franchise condition
- Rental of premises for storage, maintenance of scooters (spare parts) and charging of batteries
- Purchase of cars for chargers
- Search and recruitment of necessary personnel (4 specialists)
- Testing of scooters and software
At the 1st stage, the company plans to use the electric scooter sharing franchise from RexSoft allowing to start an e-scooter business within 2 months. It includes setting up, implementation of the necessary software (mobile application for customers and CRM for managers) and consultation, assistance with buying scooters fleet and spare parts for them. To register a business and find the necessary personnel, it is planned to use the services of competent consultants and specialized companies.
Operational activities include:
- Update of spare parts fund
- Maintenance of the scooter park
- Processing requests from customers
- Reporting
- Payment of taxes
- Payment of wages
- Payment of other fees (Software fee, rent)
- Car service
Business start-up cost
It takes 2 months to launch an electric scooter sharing business provided you decided to use the franchise by Rexsoft. However, the time frames will increase from 3 to 5 months if you choose to develop a custom scooter rental software from scratch. It’s unlikely that your business will start generating revenue from the very beginning since at the early stages you’ll have to register a business as well as configure the required software, purchase vehicles, find a premise, etc.
Below, we gathered basic expenses that you need to be prepared for at the beginning.
| Type of expenses | Description | Total, $ |
|---|---|---|
| Registration of a small business | Obtaining legal advice, personal tax number, registration with Social Security Administration, obtaining a license/permission, bank account opening. | 100-1000 |
| Purchase of vehicles | The cost is calculated on the example of the purchase of 50 Shenzhen X890 scooters, that earned a good name in the scooter sharing business. | 32500-40000 |
| Spare parts for scooters | Replacement batteries. For 50 scooters, 120 batteries are required. Headlights, stops, wheels, bumpers, brake systems, and other spare parts with high wear and tear. | 12000-14000 |
| Electric scooter sharing software | The price encompasses customization and setting of the necessary electric scooter sharing software (client app and CRM for managers) according to the terms of the franchise by RexSoft. Find more information about the cost franchise by the link | 5000-7000 |
| Purchasing a car for chargers | Scooter sharing business requires a cargo van. We made price suggestions based on the cost of a used Van (released in 2017) and a new van - Transit Van. Data source | 22000-50000 |
To sum up, the cost of an electric scooter sharing business start-up can reach nearly $70.000-110.000.
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The electric scooter rental franchise allows you to start your own business in 2 months. Use ready-made solutions from RexSoft to minimize costs and risks. Our team has been developing various solutions for this business since 2017.
Maintenance expenses
As your business is running and generating revenue, it’s time to think of maintenance expenses. You’ll need to cover all ongoing expenses such as rental costs, vehicles, taxes, salaries, etc. We summarized basic annual expenses in the table below.
| Type of expenses | Description | Total, $ |
|---|---|---|
| Warehouse rent | A room of 30-40 square meters is required for storage, maintenance of scooters (or their spare parts), and battery charging. The rental price of premises in the USA is taken from the website | 15000-25000 |
| Vehicle expenses | Fuel costs, spare parts, technical maintenance | 15000-20000 |
| Software fee | Monthly fee for using a required software | 3600 |
| Insurance | Property insurance | 500-1000 |
| Spare parts renewal | Headlights, stops, wheels, bumpers, brake systems, other spare parts with high wear and tear | 12000-14000 |
| Taxes | 320000-420000 | |
| Salary |
|
190000-240000 |
| Accounting & bookkeeping, legal services | obtaining professional legal advice, accounting and bookkeeping, filing of returns | 7000-12000 |
So, annual expenses for maintenance of electric scooter sharing business are nearly $550.000-700.000.
Personnel
Operational activities are carried out by the business owner and 4 employees of the company. 2 specialists deal with replacing dead batteries, scooters transporting. 1 specialist - arranges battery charging, discovers places where there is a high demand for scooters, plans scooter parking lots, repairs scooters). 1 manager - supports service, responds to queries from users (for example, our app has an "Ask questions" section where the customer can ask the support service anything in real-time).
Marketing plan and advertising expenses
Since scooter rental is a new service in the city, marketing will be focused on popularizing this type of transport among tourists, students, and city residents. For this, we plan to use television advertising, video advertising in social networks (Facebook, Youtube, Instagram), as well as advertising on billboards and city lights. Freelancers and marketing agencies will be involved in marketing activities. The company plans to spend 5-10% of monthly income on marketing.
The income of electric scooter sharing business
The cost of renting a scooter consists of an unlocking fee of 1 USD and a rate per minute - 0.15 to 0.30 USD. Weather conditions (temperature must be above 0) in the USA allow electric scooter sharing business to function from March to November (270 days). We subtracted 15% from the season for days with unfavorable weather conditions (f.e rainy weather) when city residents prefer other means of transportation. So we have 230 days left. From our customers' experience, we know that 1 scooter can generate $70 revenue per day. So, during the season, 50 scooters can generate nearly $100,000 monthly income or $1,200,000 per season.
Scooter rental business profitability
So, the electric scooter sharing business is a highly profitable type of business, because in our case, the income from renting 50 scooters allows us to see the return on start-up investment (which is $70,000-110,000) very soon and cover the major maintenance expenses ($550,000-700,000) in one season.
Bogdan Misiurenko
Business Development ManagerSkilled, experienced specialists from RexSoft are ready to answer any questions regarding the design and development of IT products.
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