Introduction
It is a big challenge to remain profitable in any business — from intense competition to margins being cut thinner as a result of increasing costs, there are many perils that business owners face.
Figuring out how to rent your rv is one thing but developing a sustainable business is another — to ensure you make money, you will have to make sure that expenses remain low so that your profitability increases. Be it keeping up with your monthly payments on your RV, or building the next RV rental enterprise, strategic tactics must be adopted to ensure that you enjoy a roaring success.
Today, we round up some strategies that will keep both your wallet and your guests happy!
1. Look out for second-hand vehicles in good condition
While it might seem silly to buy second-hand for a business, it is a good idea to do so as that will lower your expenses by a fair bit. Furthermore, you make sure to avoid over-leveraging yourself.
Since the world as we know it has changed significantly since the onset of the Coronavirus in 2019, this strategy is all the more one to consider! If you receive many cancellation requests due to the pandemic, how do you intend to repay the monthly payments on your RV? Despite the low-interest-rate environment today, a good part of your profit goes to paying off your loan.
Get around this by buying a second-hand vehicle in a suitable condition, and doing the fix-ups yourself. This decreases your cost by a fair sum as compared to buying it brand new, and lowers the amount of debt that you have; thereby putting you in a good position to be profitable.
2. Delay that purchase till you can pay it off fully
While there is a myriad of options available to finance your RV purchase nowadays, Cash is still best. Even though the interest rates on loans may be low, it ultimately adds up, especially if your principal amount is high. Instead, we recommend that you save up enough cash to pay off your purchase in full, or at least half of it — this way, you benefit from having to pay less in interest. Some places might even grant a discount if you can pay cash since that means their cash flow is also better. You can rest assured that your profits aren’t being eaten up by interest rates.
3. Get a campervan instead
Driving an RV can be a scary affair for inexperienced drivers given its large size. Since many RV parks nowadays have many facilities ranging from toilets to showers to even bedrooms, it may longer be necessary to have a self-contained RV for the road. Second-hand campervans are not only easier for potential customers due to their ease of driving but are also likely to be more affordable for you to purchase. We declare that the camper is now back in fashion!
4. Don’t bother with specialized furniture or equipment
Wherever you can just opt to buy standard home furnishings. Avoid items with the word “RV” in their name, as they are likely just the same item — just rebranded. You are quite literally going to be paying extra for the name brand. From showerheads to stovetops, and pipes to faucets, most regular home furnishings are also RV-compatible. You will probably have more options to choose from when shopping at your local hardware shop compared to a store specializing in RV equipment.
5. Make sure to compare prices before you commit
When in doubt, always make sure to compare prices at a few shops before making your purchase. Many people say they want to support local businesses, but when you are charged nearly double for simple parts — you aren’t supporting them, you’re being scammed by them. Look around online or at wholesalers to keep costs down. Another tip would be to look at an RV salvage yard. These are places where you will be likely to find the same parts for less than the retail price.
6. Find a reliable independent mechanic
One of the largest expenses that renters struggle with is RV servicing costs and long wait times. It is important that you get your RV serviced regularly, lest it breaks down in the middle of nowhere. Rather than wait for months before you can get a servicing appointment, it may be worthwhile to find an independent mechanic who is likely to be more affordable than bringing your RV into the shop.
With the anti-work movement only getting stronger, many RV shops have suffered from a shortage of staff and as such are overbooked, leading to long wait times.
Time is money in business, it is critical that you find yourself a reliable independent mechanic who can fix up your RV in a timely fashion, ensuring you can take bookings again. Pro-tip: when looking for an independent mechanic, tap on the network of RV renters on the internet and read up reviews first.
7. Buy items in large quantities at one go
If you are providing toiletries as part of your rental, consider buying them in bulk from a wholesaler. Items such as travel-sized toothpaste, soaps, or hand sanitizers are often expensive if you buy from a retail store. Since you are purchasing large quantities to store, these wholesalers might even give you a discount for buying so many at one go! A good tip also is to ask if customers need these items — you could always brand it as being eco-friendly, by providing these items upon request. Not only do you save some money, but you are also doing your bit for the environment.
8. Stay consistent if you intend to expand into a fleet
If you are looking to expand your rental business by adding to your RV fleet, consider buying the same type of RV. This enables you to share parts, and negotiate discounts for your furnishings and toiletries or bedding items. Learn from the best! Southwest Airlines only flies one model of aircraft, a factor which they attribute to their booming success
Conclusion
It isn’t an easy task to save on your expenses to remain profitable. Rising expenses are what have put many people out of business. Follow our tips for a profitable and successful RV rental business!
