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Truck Rental Business Plan Presentation
- 1. The 7th Branch October 14, 2016 Kevin Moriarty, Greg Hink, Steve Nolan, Aimee Ybañez
- 2. The Idea Holman owns companies across many automotive spaces but currently lacks a piece of the rental market. This proposal is for Holman to open a 7th company, Holman Rental.
- 3. Benefits Increased Availability for Our Customers New Revenue Stream Additional Service to Strengthen Client Partnerships Ability to Track Units, Leverage TRC, and Provide Fast Issue Resolution
- 4. Expense and Income Details Income Estimate Years 1-4 Rental Rate Estimated Income From Rate Total Miles PV Estimated Income From Mileage PV Estimated Income From Mileage Remarketing Returns Total Income Year 1 $1,325.30 $636,143.04 37,500 $5,625.00 $337,500.00 $973,643.04 Year 2 $1,325.30 $636,143.04 37,500 $5,625.00 $337,500.00 $973,643.04 Year 3 $1,325.30 $636,143.04 37,500 $5,625.00 $337,500.00 $973,643.04 Year 4 $1,325.30 $636,143.04 37,500 $5,625.00 $337,500.00 $1,320,000.00 $2,293,643.04 Expense Estimate Year 1 Qty Description Annual Expense PV Monthly Expense PV Annual Expense Monthly Expense Inventory Cost 60 Box Truck $10,933.56 $911.13 $656,013.60 $54,667.80 Insurance Cost 60 $1,200.00 $100.00 $72,000.00 $6,000.00 Employee (Department Manager) 1 $75,000.00 $6,250.00 Registration 60 $100.00 $8.33 $6,000.00 $500.00 Vehicle Maintenance cost 60 $1,006.61 $83.88 $60,396.75 $5,033.06 Total $869,410.35 $72,450.86
- 5. ROI ROI Summary Annual Expense Total Income Profit ROI% Year 1 $869,410.35 $973,643.04 $104,232.69 5.66% Year 2 $914,210.55 $973,643.04 $59,432.49 3.15% Year 3 $925,473.46 $973,643.04 $48,169.58 2.54% Year 4 $1,349,371.39 $2,293,643.04 $944,271.65 25.92%
- 6. Where Do We Start? o A quick start can be achieved by utilizing current customer rental practices to identify rental trends and purchase a small fleet for the test market o The fleet can be stored at existing Holman and Kuni dealerships, based on the test market area o By starting small, current Holman employees can oversee Holman Rental, minimizing overhead costs o Rental software would need to be created, or an add on to Intellifleet put in place o Additional start up tasks include: purchasing insurance, setting pricing, developing necessary forms, and creating marketing materials
- 8. Questions?
Editor's Notes
- Good Morning, Thank you for having us today. My name is Aimee Ybanez and I am a supervisor in the Account Management department. With me are Steve Nolan, Vehicle Remarketing Supervisor, Greg Hink, Truck Account Administrator, and Kevin Moriarty, Truck Account Administrator and originator of this idea. Together, we make up the 7th branch.
- Imagine that you are a fleet manager and have the need for some long term rentals, lets say 6 months. After a lengthy search, you find a rental company that will get you the vehicles you need, but require a new PO for each week you need the vehicle. For 1 vehicle, you would have 24 POs. But you don’t need 1 rental, you need 100. All of a sudden you are faced with 2400 POs, a headache to manage and a nuisance to track. Now imagine that you are in charge of a complex fleet. You can’t go down to the local Enterprise or National and rent a Fusion or F150. You need box trucks, heavy duty vehicles, and equipment. You work with your fleet management company and while they find you a rental, the cost is high, the inventory available is low, and the selection is minimal. These are both problems that our customers are currently facing. We are here today to present an idea for a 7th company under the Holman umbrella.. Holman Rental. This morning we will walk you through the mutual benefits a Rental division would provide, the costs/income and ROI we project, and the initial plan on where to start. With that, I will turn it over to Greg to discuss the benefits.
- Expense Details Inventory Cost Calculated based on monthly lease rate Insurance Cost Estimated at 100 dollars per vehicle per month set aside for insurance/damages Employee (Department Manager) Estimated annual salary for the fleet manager Registration Estimated annual registration renewal cost Vehicle Maintenance Cost Average maintenance cost for the applicable months in service Maintenance calculations were based on like vehicles Income Details Rental rate Fixed vehicle cost PV + 30% Estimated annual income from rental rate This is calculated at a 66.7% utilization rate (Assuming the vehicles will be rented at least 8 out of 12 months) Estimated income from Mileage Total miles PV * .15 cents per mile * 60 trucks Remarketing Returns Estimated on cycling the vehicles at 48 MIS and 150,000 miles (22,000 per truck)