The Business Overview
When it comes to car leasing business, we are referring to the art of leasing out cars to people for commercial purposes.
You charge a fee for this and determine the duration for which you want the car to be leased. It is a highly profitable business, especially when located in a populated area with frequent commercial activities.
For you to succeed in this business, however, you need to do some facts findings first, conduct a market research and develop a good business plan.
Car leasing business is capital-intensive and needs a good managerial effort and attention to succeed.
Profitability Of The Business
To ascertain how profitable this business is, you need to develop a feasibility study first. This will give you a clue as to what the pitfalls and risk factors are in this business, as well as the merits and demerits of the business.
With your feasibility study, you will be able to know your target market as well as grade your success rate. Car leasing business comes in two varieties: Specialized service and General car leasing.
When your feasibility study is well done, you will be able to know your start-up capital, required expenses, permits, and licenses as well as prospective competitors.
The aim of a market research is to have a better evaluation of your potential customers, their availability, lifestyle, price sensitivity and purchasing power. You will also know their level of education, occupation, gender, income strength, and age etc.
These go a long way in boosting your level of profitability in this business
Read Also: Where to Buy Cars in Lagos, Nigeria
The Expected Market & Customers For This Business
While planning to process of starting a car leasing business, you need to establish the quality of service you will be offering your prospective clients. This includes the brand or class of cars you will be focusing on. It is there and then that you will know whether you will be operating with the ordinary regular cars or exotic cars.
Tourists and travelers are the common patronize car leasing business. So, you should take care of this category of customers during your feasibility study and planning.
The demand for car leasing business revolves around the transportation sector too, aside from the tourism sector described above. Airport shuttle, for example, need pick up and drop off services.
As such, car leasing business will be in demand. Also, businessmen and executives do patronize intra-city car hire to key business destinations in Nigeria. So, Car leasing business is a duplex of the transport sector and tourism sectors of the Nigerian economy.
Finance and Startup Costs
Although the price fluctuates, if you want to go for Fairly-Used Salon Cars such as preferably Peugeot, Toyota or Nissan brand, you may need about N1,500,000.
You may also need to get an open Space for this business. The cost of this depends on your area or location. Furniture, marketing, and other miscellaneous expenditures may gulp around N1,000,000 too. So, it is likely that for a one-vehicle car leasing business, we are looking at around N3,000,000.
So, for a start, we are looking at roughly N5m, depending on your scope.
Get & Register A Business Name
You need to get your car leasing business a good business name. This should be simple enough to spell, write and say but meaningful. It should be such that the message of your business is conveyed at first sight or mention.
Once you have identified your business name, register it with the Corporate Affairs Commission of Nigeria (CAC).
Get A Business Plan
A business plan is a business sustainability tool which will help you to understand and define your car leasing business from startup to the running stage. It is a comprehensive chart which details focus areas of your business and how to achieve each set milestone.
With your car leasing business plan, also, you will be able to determine and outline necessary machines, tools and equipment needed for this business. it also shows a breakdown of your income and expenditure in this business.
Types Of Cars & How To Get Them In Nigeria
There are basically two kinds of cars you can use for car leasing business. These are new cars and fairly-used cars. As such, depending on your startup capital, you can choose to either direct-purchase new vehicles or buy fairly-used vehicles. The third option is to get your car leasing vehicles via hire-purchase.
Necessary Car Licenses & Insurance Cover
Car leasing business needs a business license to operate smoothly. You also have to do all the paperwork at the Nigerian fire Service and, also, get an insurance cover.
Car leasing business insurance cover is different from that of general car insurance. Also, you need to carefully consider the insurance requirements and conditions.
The cars involved need to be in good condition to get adequate insurance cover. Concerning customer expectations, you will need to make the following decisions:
Setting Operating Hours & Pricing
This is left for you to decide whether you will be running 24 hours of the day, or for selected hours and, also, whether you will work on weekends and holidays.
In Nigeria, and in the town where you wish to do this business, there is a generally agreed pricing mechanism already.
So, all you need to do here is to move around and make inquiries from those already in this business. The mode of payment is likely going to be cash. It is there and then that you can determine your working hours or days.
Marketing Tips For Success
Effective marketing will help you to identify, prospect and profitably satisfy consumers’ needs. For every business to succeed, the importance of an effective marketing cannot be ruled out.
What your business does, or should be doing should be to create value. In return, the profits will pull in by itself.
To directly target and get in touch with your market, you need to take your business online. Businesses promoted online do get an almost instant response and conversion rate, as compared to those promoted offline.
You can as well create a car leasing portal where you get client details. There, you will state your payment modes and contact details. This is where you will display your cars for leasing, booking time and prices.
Sustainability & Profitability Tips
Unique selling propositions here entails adding value to your quality of service. It’s all about adding a touch of class to your business so that there can be a striking difference between you your competitors.
This is where branding comes in. branding will help you beat competition, price, and give you a market share in car leasing business. of course, this can be a simple act of painting and rebranding of your vehicles so that you can easily earn rental patronage.
I hope this guide was helpful to anyone who wishes to start a car leasing business in Nigeria today. Please drop a comment below if you need further elucidation.
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