From an economic point of view, e-scooter rental is a profitable business. From the point of view of absolute income numbers, it’s rather small. Let's try to roughly calculate the profitability of the e-scooter business.
All calculations are made on the example of a scooter sharing business with a fleet of 50 scooters, the location of the business is a US city with a population of 230,000 people. Calculations of expenses and income of the scooter sharing business are approximate and we did not take into account a number of factors (competition, level of vandalism, local fees and charges), which may affect the success of this business.
It takes 2 months to start an electric scooter sharing business if you decide to use a franchise from RexSoft. If you have decided to develop scooter rental software "from scratch" - the term of starting a business may increase to 3-5 months. During the start-up period, your business will not generate income, because first you need to register the business, set up the necessary software, purchase scooters, find premises, etc. Next, we've collected the main costs you need to be prepared for at the start-up stage.
Costs Description Total,$ Small business registration Legal consultations. Obtaining a tax registration number. Registration with the social insurance authorities. Obtaining a license/permit. Opening a bank account. 100-1000 Purchase of scooters The cost is calculated based on the example of buying 50 Shenzhen X890 scooters, which have proven themselves well in the scooter sharing business. 32500-40000 Spare parts for scooters Replacement batteries. For 50 scooters, 120 batteries are required. Headlights, stops, wheels, humpers, brake systems, other parts with high wear and tear. 12000-14000 Electric scooter sharing software The cost is calculated for the customization and setting up of the necessary electric scooter sharing software (client app, and CRM for managers) according to the terms of the franchise from RexSoft. More information about the cost of the franchise here 5000-7000 Purchase of cars for chargers A cargo van is required for a scooter sharing business. For example, we found out the cost of the used (from 2017) and new van - Transit Van. All information is taken from the site 22000-50000So, the costs of starting an electric scooter sharing business can be $70,000-110,000.
After the launch, your business will start to work and generate income for you, and to support the electric scooter sharing business, you need to cover current expenses: rent, car expenses, taxes, employee wages, etc. In the table, we calculated the main annual expenses.
Costs Description Total,$ Warehouse rental A room of 30-40 square meters is required for storage, maintenance of scooters (spare parts) and battery charging. The cost of renting premises in the USA is taken from the site 15000-25000 Car expenses Expenses for gasoline, spare parts, technical service 15000-20000 Software fee Monthly franchise payment for the use of the necessary software 3600 Insurance Property and general liability insurance 500-1000 Update of spare parts fund Headlights, stops, wheels, humpers, brake systems, other parts with high wear and tear 12000-14000 Taxes 320000-420000 Wages (charges)The annual costs of running an electric scooter sharing business can be $550,000-700,000.
The cost of renting a scooter consists of an unlocking fee of 1 USD and a rate per minute - 0.15 to 0.30 USD. Weather conditions (temperature must be above 0) in the USA allow electric scooter sharing business from March to November (270 days). We subtracted 15% from the season for days with bad weather (rain) when city residents prefer other means of transport. So we have 230 days. From the experience of our customers, we know that 1 scooter can bring from 70 dollars a day. 50 scooters can bring in a season from $100,000 monthly income, or $1,200,000 per season.
So, the electric scooter sharing business is a highly profitable type of business, because in our case, the income from renting 50 scooters allows to return the initial investment for starting the business ($70,000-110,000) and cover the main current costs of running it ($550,000-700,000) per season.
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E-scooter business is quite easy to create. You just need a few scooters, a quality application, and a good location to get a flow of customers. The key is to have the right people to help you figure it all out and make your business truly competitive. Contact RexSoft now and we will work with you to make your city's residents more mobile and you truly successful.
Unveiling the Investment: Costs of Starting an Electric Scooter Franchise
The idea of delving into the electric scooter business by opening a franchise can be both exhilarating and daunting. Understanding the financial involvement is crucial for potential franchisees looking to navigate this growing industry. Let's break down the costs associated with starting an electric scooter franchise.
Firstly, the initial franchise fee is the starting point. This one-time payment grants you the license to operate under the chosen company's brand and can vary significantly based on the brand's market position and reputation. Franchise fees for major electric scooter brands can range anywhere from $20,000 to $50,000 or even higher, depending on the scope of the franchise agreement and the support provided by the franchisor.
After the franchise fee, you will need to consider the cost of equipment and inventory. This includes the fleet of electric scooters, chargers, maintenance tools, and potentially a vehicle for deploying and retrieving scooters. Additionally, there might be a need for a physical location or storage space. The investment for equipment and inventory can easily add up to several tens of thousands of dollars.
Operational expenses must also be factored into the overall cost. These recurring expenses include rent (if applicable), utilities, insurance, marketing, payroll, and continuous maintenance of the scooters. It's critical to have a solid business plan to address these costs effectively and ensure sustainability.
Furthermore, most franchisors require a royalty fee, typically a percentage of the monthly revenue or a fixed monthly payment, to continue benefiting from the franchise network, which supports advertising, brand development, and administrative services.
Lastly, additional costs such as legal fees, training fees, and grand opening marketing costs should not be overlooked. These can sum up to several thousand dollars.
In summary, the total cost of starting an electric scooter franchise can generally range from $100,000 to $300,000, considering all the factors mentioned. This ballpark figure may fluctuate based on location, brand selected, and the scale of operations you aim to establish.
By comprehensively assessing these financial requirements, potential franchisees can make informed decisions in pursuing an electric scooter franchise, paving the way to a potentially electrified future in urban mobility. Learn more about affordable electric scooter franchise opportunities here.
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