If you’re looking for a business idea that’s both innovative and sustainable, car sharing might be just the thing for you. Car sharing is a new form of transportation that allows people to rent cars by the hour or day. It’s a great option for those who don’t need a car all the time, but still want the convenience of having one when they need it. Starting a car sharing business is a great way to tap into the “sharing economy”, which is expected to grow to $335 billion by 2025. There are a few things you’ll need to do in order to start a successful car sharing business.
Here are the 9 steps you can take to get started on building your very own car sharing business.
9 Steps to Launching a New Car Sharing Business
1. Name Your Car Sharing Business
Give your car sharing business an identity so people will think of it as a well-known and respected brand. You can take the name of your car sharing business from your industry, focus on a geographical location, or use your own name among other options.
The main goal for naming your car sharing business is to make it sound appealing and trustworthy so that customers will be willing to use your service.
2. Determine Your Car Sharing Business Model
There are several possible types of business models for a car sharing business including:
- Hourly car rental
- Daily car rental
- Monthly or yearly subscription
No matter which model you choose, make sure that it aligns with your business goals and the products and services you offer.
Read more about choosing the right business model for your car sharing business.
3. Choose a Legal Form for Your Business
By incorporating your car sharing business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.
The business structure you choose for your car sharing business will determine the amount of taxes you pay and which state or federal tax forms you need to file.
Read our article comparing the most common car sharing business structures.
4. Write a Car Sharing Business Plan
All car sharing business owners should develop a business plan.
A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.
When developing your car sharing business plan and strategy, you should think about the following questions your customers might have:
- What is car sharing?
- How does car sharing work?
- What are the benefits of car sharing?
- Are there any restrictions to using a car share?
- How do I join a car share program?
- How much does it cost to join a car share program?
- How does billing work for car sharing?
- What if I damage the car while using it?
- What type of insurance is included with car sharing?
- Are there any other fees associated with car sharing?
- What if I want to cancel my membership?
- How can I contact customer service?
Read our article about how to write a car sharing business plan.
5. Apply for the Necessary Permits and Licenses
There may be required licenses and permits you need to obtain before launching your car sharing business.
For example, if you’re going to be operating in multiple states, you’ll need to get a multi-state license. You may also need to get a business license, a sales tax permit, and/or a zoning permit, depending on your state and local laws.
You must also register your car sharing business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.
Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.
Read our article about obtaining the proper car sharing business licenses.
6. Determine Your Budget & Apply for Funding as Needed
In developing your car sharing business plan, you will figure out how much funding you need to start and grow your business.
If you have your own funds to invest in your car sharing business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your car sharing business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.
Read our article about the costs associated with starting a car sharing business to help you determine if funding is needed.
7. Get the Technology & Software Needed to Run Your Business Efficiently
When you start your car sharing business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues.
You may also want to invest in customer relationship management (CRM) software to manage your customers, as well as project management software to keep track of tasks and deadlines. There are many CRM and project management software programs available on the market, so make sure to do your research before making a purchase.
You may also need to purchase or lease vehicles, as well as install technology in those vehicles, such as GPS units.
Be sure to create social media accounts for your business and build a website so customers can learn more about your business and how to sign up for car sharing services.
Read our article about the technology and software you need to run a car sharing business.
8. Market Your Car Sharing Business to Potential Clients
Before you start selling your products and services, you have to let the world know you exist. The first step is to create a website so people can learn more about your products and services and how they benefit them.
After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the car sharing industry through social media and blogs so they can help share your business.
You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new customers. Car sharing businesses should consider the following promotional strategies for which you should start getting prepared:
- Sponsoring events and organizations related to car sharing or the environment
- Offering a sign-up bonus or discount for new members
- Creating a video about the benefits of car sharing and posting it online
- Distributing flyers and brochures in high-traffic areas
- Creating a social media campaign using hashtags and influencers
Read our article about how to market your car sharing business for more tips.
9. Get New Clients & Grow Your Business
When you promote your products and services, you’ll start to get interest from potential clients.
Make sure you’re ready to serve these clients. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your car sharing business.
Read our article about how to effectively grow your car sharing business to learn more.
Starting a Car Sharing Business FAQs
There are many reasons to start a car sharing business. First, it’s a great way to reduce traffic congestion and pollution. Second, it can help people save money on the cost of ownership and maintenance of a vehicle. Third, it can provide a new business opportunity for entrepreneurs.
To start a successful car sharing business, you need a few things. First, you need to have the right technology in place to maximize efficiency. Second, you need to market your business to potential clients. Finally, you need to find and train the right people to help you grow your business.
Many car sharing businesses are started from home. The first step is to develop a business plan. Once you have a plan in place, you need to get the right technology and software in place. Finally, you need to market your business to potential clients and get new customers.
Starting a car sharing business online is a great way to reach a wider audience. The first step is to develop a website so people can learn more about your products and services. Once you have a website, you need to start promoting it through social media and other channels. You also need to gather the materials needed to execute your promotions strategy.
Here are a few tips for starting a car sharing business:
- Develop a business plan.
- Get the right technology and software in place.
- Market your business to potential clients.
- Find and train the right people to help you grow your business.
- Offer a sign-up bonus or discount for new members.
- Create a social media campaign using hashtags and influencers.
- Sponsor events and organizations related to car sharing or the environment.
- Distribute flyers and brochures in high-traffic areas.
- Get new clients and grow your business.
A simple checklist to use when starting a car sharing business is as follows:
- Name Your Car Sharing Business: This should be done with care, as your brand is important for attracting the right customers. A simple, memorable name will go a long way.
- Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
- Determine Your Car Sharing Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
- Write a Car Sharing Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
- Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
- Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
- Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
- Market Your Car Sharing Business to Potential Clients: A solid marketing plan will be crucial to your success. It should focus on attracting the right customers so that you can provide them with the products and services they truly need.
- Get Clients & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your products and services.
Starting a car sharing business can be an exciting and profitable venture. To ensure success, make sure you research the market, have a well-written business plan, and market your business effectively. By following these tips, you’ll be on your way to running a successful car sharing business in no time!