How Much Money Does it Take to Start an Electric Scooter Rental Business
What Budget is Required to Start Electric Scooter Business
Electric scooter business start requires quality vehicles, turnkey software, a popular location to get a flow of customers, and what is most important throughout financial planning. Further on this page, you will find a valuable tool for efficient budget management – all the essential expenditure items to launch the electric scooter business.
Spoiler! Electric scooter business just like any startup requires sufficient investment to get going and even more to maintain its operations.
Electric Scooter Business Price Calculations: Real Case Example
We’re illustrating the cost of electric scooter business launch cost based on an e-vehicle rental startup with a fleet of 50 vehicles. The business is based in one of the US cities with nearly 230,000 inhabitants. The calculations are precise and do not cover such factors as electric scooter business competitiveness, the crime rate in the area, and peculiarities of doing business such as local fees and charges that affect the final cost and success of a startup.
Business Startup Cost
It usually takes from 3 to 5 months to set up an electric scooter business. During this period, you’re unlikely to generate income since a vast sum will be invested in business set up, premises rent, scooters, and more. At this stage, we can distinguish three main types of business expenses: setup cost, purchase of equipment, and software development.
Business registration. It includes legal consultations, obtaining a tax number, a license, registration with the social insurance authorities, and finally opening a bank account. The final paycheck usually fluctuates from $100 to $1000.
Purchase Equipment. Apart from scooters and spare parts, you will need to purchase cargo vans for chargers – personnel who will take care of the battery charging of vehicles. The minimum expenses plan is $66,500.
Electric scooter sharing software. One more sufficient expenditure item is electric scooter rental software. This includes electric scooter app development and crm for managers.
Hence, business startup expenses largely depend on whether you decide to develop specialized software from scratch or integrate on-the-shelf solutions.
So, the startup cost of an electric scooter business can be $70,000-110,000.
Maintenance Expenses
When electric scooter business expenses for setup are handled, it’s time to start covering current expenses. Let’s dive into more details and illustrate all the main costs to be prepared at this stage. Please notice, that all sums are considered on an annual basis.
Warehouse rental. You will require a room of at least 30-40 square meters to store, maintain scooters, spare parts, and arrange battery charging. The average renting price in the USA is $15,000-$25,000.
Legal liabilities. As an electric scooter business owner, don’t forget about taxes (320,000-420,000) as well as property and general liability insurance ($500-1000).
Cars and scooters technical maintenance. These include the technical audit and update of spare parts for both e-vehicles and vans for chargers. In addition, vans will require gasoline expenses. The overall paycheck will reach around $34.000.
Software fee. The monthly payment for utilizing the necessary software solution. Provided, you implemented the franchising model, the monthly subscription fee will be around $3600.
Personnel maintenance. These are mostly wages, office supplies, and all the other expenses associated with hiring employees. The approximate spending at this stage is nearly $240,000.
Accounting and legal services. The provision of legal advice, accounting & bookkeeping services, and reporting are essential for remaining a fully compliant business. It will take around $7000-12,000 to receive professional services.
To summarize, the annual costs of running and maintaining an electric scooter business can be $550,000-700,000.
Also Read: The Five Business Software That You Should Never Deny
