Rental start-up advice or business plan

[jeff@jeffhutman.com]

It is exciting to enter such a progressive and promising world of Segways.

My name is Jeff, and I am opening a Segway rental business with the support of Potomac Segway (Austin Colby - Hagerstown MD).

Austin's advice was to query the group here, for some of my start-up and business planning questions.

Thus, I would appreciate any help and/or advice: business plans, market strategies and demographics, financials such as P&L, breakevens, projections, operating costs and expenditures, etc. -- anything would be appreciated.

While I have somewhat unique plans and marketing concepts, there is much to be learned from an established business, no matter how dissimilar.

Hopefully somone feels secure enough, and proud enough, of what they have learned and accomplished, that they will want to share with me so that I might learn from them.

Thank you so much, in advance!

-Jeffrey Hutman

17016 Taylors Landing Road
Sharpsburg, MD 21782
jeff@jeffhutman.com
(301) 432-0660

[Timezkware Tim]

I'm not in the rental business, but I can tell you one thing, for sure. I would strongly advise doing the proper instructional demo before letting anyone rent.

The threat of collision (mostly by inexperienced gliders like renters) already has some local juristictions banning their use in areas and incorrectly labeling Segways as "dangerous". This is very, very bad for Segway's image, to say the least.

Tim

[Florida Ever-Glides]

Jeff,

First of all, if you do Segway 'rentals', your on your own as far as I'm concerned. A very risky venture to say the least. Broken machines (which are very expensive to repair), injuries, and 'finger pointing' as to blame, is a part of the rental game. Be prepared, your city may not even approve your business. Rentals have shown the 'potential unsafe' and 'horseplay' side to Segway riding. And, after repair costs, you probably won't be pleased with your year-end numbers.

Secondly, the handing over of years of business experience and trade stratigies and financials to a stranger has nothing to do with being secure or proud, it's stupid. For that kind of information one would usually pay a consultant thousands of dollars.

I have helped dozens of people with answering general questions mostly regarding safety issues with the customer.

The best advice I could give you is DON"T do rentals. You won't be doing yourself or the industry any favors. Dealers are in the business to sell/service Segways. They really don't care what YOU use them for.

I just spoke to a woman who started a Segway rental business a few months ago. She is currently 'dying on the vine'....

Whichever you decide, please go the extra 'ten miles' to keep it safe. Bad accidents = bad press. This hurts everyone here.

[Timezkware Tim]

Originally Posted by Florida Ever-Glides

Jeff,

First of all, if you do Segway 'rentals', your on your own as far as I'm concerned. A very risky venture to say the least. Broken machines (which are very expensive to repair), injuries, and 'finger pointing' as to blame, is a part of the rental game. Be prepared, your city may not even approve your business. Rentals have shown the 'potential unsafe' and 'horseplay' side to Segway riding. And, after repair costs, you probably won't be pleased with your year-end numbers.

Secondly, the handing over of years of business experience and trade stratigies and financials to a stranger has nothing to do with being secure or proud, it's stupid. For that kind of information one would usually pay a consultant thousands of dollars.

I have helped dozens of people with answering general questions mostly regarding safety issues with the customer.

The best advice I could give you is DON"T do rentals. You won't be doing yourself or the industry any favors. Dealers are in the business to sell/service Segways. They really don't care what YOU use them for.

I just spoke to a woman who started a Segway rental business a few months ago. She is currently 'dying on the vine'....

Whichever you decide, please go the extra 'ten miles' to keep it safe. Bad accidents = bad press. This hurts everyone here.

I was hoping that you would show up with some frank words of wisdom, Tom. Thanks!

Jeffery, take a look at this thread (below). This is an example of how quickly things can go wrong in the rental business:
http://forums.segwaychat.com/showthread.php?t=13460

Tim

[jeff@jeffhutman.com]

Thank you for the (not-so) welcome.

To clarify, I was not asking for trade secrets, and I failed to include "guided tours" in my description. Not just "rentals." My apologies.

Your "liability, access, and repair" points are well-received, but have already been considered and addressed to my satisfaction. Thanks.

And BTW, I am “a consultant that gets paid thousands.” And I have subsequently offered such valuable insights and documents (deemed non-proprietary) for free.

Funny, I don't feel "stupid" at all. But rather proud of my dignity for helping another reach a dream, proud of my hard-earned professional acuity, and secure with my future, and business judgement.

It can't hurt to ask -- might be someone else out there like that.

So, thank you for your free input of negatives -- they're very valuable too! (Unfortunately it all sounds very damaging to the "Segway reputation” for quality, maintenance, longevity, and dealer/manufacturer support.)

[Florida Ever-Glides]

I'm not trying to be negative, but their are pitfalls in this industry that could hurt a lot of other businesses. But since you're a high paid consultant I'm sure you already know all of this. Sorry for insulting your intelligence...

I doubt that you'll find any likely businesses who have 'sweated' over the years, and are successful, that will hand over their business plan, but good luck...

[pam]

There are some places that do rentals, but the majority of businesses with this in mind are actually guided tours. For several reasons. One is that the technology is so new that people seem more likely to steal the darn things. We had a guy on the east coast of Florida lose 2 to Fake IDs and so on. Another is that if you're on a guided tour, you can see what is going on with the units, and can forstall any problems due to inexpert or deliberately wild riders.

The other issue is that there are probably a very limited amount of insurance carriers who will insure you. If you sustain a major loss, either due to theft or to someone using your vehicles inappropriately, it might well affect the other rentor/tour agencie's insurance costs (and this is what I think Tom is referring to when he says
"but their are pitfalls in this industry that could hurt a lot of other businesses." - I'm guessing he's concerned about the potential cost to him, as another rental/tour agency, should his insurance costs go up precipitously.

Regardless of that, as I'm sure you're aware, you're going to need to insurace, and you're going to need to sell the idea to the town or city you'll be doing business in. You'll have to follow all the licensing requirements. You'll obviously need a storefront. You might want to set up a training protocol for people who would rent from you, as most would not know what to do, nor how to protect themselves.

I would suggest strongly that if you're going to rent without tour, that you find some of the dealers who are doing it and talk to them. Segway of Long Beach rents, I think that Segway of Orange County (both in California) rent. Segway of New Mexico rents - some of these dealers you will find advertise in both this forum and in the buy and sell forum.

Good luck in your ventures. Welcome to the Chat!
Pam

[Florida Ever-Glides]

Pam,

Thank you. Sometimes you have a better way with words than I do. The pitfall I was referring to has partially to do with what you said, and when issues happen like the one now in Manhatten Beach, CA it effects all of us. The banning of Segway use as a result of a careless rental can spread throughout the country. I'm not worried about my town so much, it's not fair if a restrictive ordinance is the result of reckless renters....

[Mr_Laurenzano]

Jeff give me a call any time. I just folded up a rental biz, like to know why?
805-550-2075
Tony Cenrtal Coast Segwave Rentals.

[jeff@jeffhutman.com]

Thank you. I do appreciate the advice on the pitfalls involved.
Much like other industries (ww rafting/kayaking; horseback riding, in-line skating, skate boarding, bicycling, snowboarding, skiing . . .) all these issues/hurdles have been successfully overcome through proper research, training, and management (and a good law team.)