Today, we will use everything we have learned about automated business, value, and luxury vehicle rentals to build a profitable business model in the eclectic vehicle space. It will take all our entrepreneurial wits to accomplish this, so let’s get moving.
Background. I stumbled upon a video on the Electric Hummer by one of my favorite YouTubers. The Hummers look absolutely stunning, and many people will want to get their hands on them.
Then, he mentions the price, and my eyes start to water. The higher-end model is quoted at $116,000. This means only a select few people in the world will be able to afford these trucks. But the pricey electric Hummer is not alone.
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The Tesla Model S Plaid, F150 Lightning, and the Mustang Mach E are all unique in their own way. The pricing may be more reasonable on these vehicles, but consumers will want to try them out before buying.
And not just to test drive them, but to drive them for a couple of weeks to see if they are ready to make the switch to electric. Moving to an electric vehicle will be a huge shift for most people. There are pros and cons for the transition to electric from ICE (internal combustion engines).
But I am not here to debate the merits of electric vehicles, I am here to start an automated business model that will pay us while we chill on the beach somewhere. For reference, my favorite two books on automated business are “The Company on One” and “The 4-Hour Work Week.”
Crawl, Walk, Run. Okay, we are going to take the long way to business success, not shortcuts or speed runs. I have already covered some of the tactics we can use to build a rental car business in the articles “Start a Luxury Vehicle Business” and “Want a Tesla? Start a Rental Car Business.”
Today, we are going to go further into this world by introducing multiple electric high-end electric vehicles into the mix. However, we will use bank money to pay for our expensive vehicles. To get a bank loan (or Small Business Administration loan) we will need to show a profitable business model.
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In effect, you need to have a profitable business to get a business loan. Crazy right? The loan will be for us to expand into the expensive EV space. So let’s do this into three distinct steps.
Step #1: Build a profitable automated rental car business model. Tons of people have already built profitable rental car business models through Turo, so we do not have to reinvent the wheel. What we do need to do is market research.
We need to find what types of cars will be profitable in our areas. We will start super small for this portion of our business model, most likely with two cheap cars. I am talking about Ford Focus or Nissan Altima cars that we can buy in cash.
Our two objectives in this stage are to become profitable and to automate our business completely. We may have to use a combination of automation via systems, out-sourcing, and management to accomplish full automation. However, we should not leave this Step #1 until we remove ourselves entirely from the act of making money—this is how we build passive income.
Step #2: Incorporate our business and build business credit. Step #2 will want to focus on incorporating our business and establishing our business credit. Incorporating our business is vital for two reasons.
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One, it gives us liability protection by creating a company. The company now has oversight over the business, not us. Starting a Limited Liability Corporation or LLC is what many people would do in this case.
Two, starting an LLC (or other business entity) will give us access to an Employer Identification Number or EIN. The EIN is essential to building business credit. I wrote a couple of articles on building business credit; they are “Establish Business Credit Now” and “Creative Financing in Real Estate 106: Business Credit.”
In a nutshell, there are three stages of business credit. You will first need to build your credit with a business credit card, then a business line of credit, and finally a business loan. So, get smart on business credit while your automated business is running itself.
That is why we love fully automated businesses—it frees us to do higher-level functions. At this stage, we want to introduce some less expensive luxury vehicles into our portfolio. Cars like a used Chevy Corvette come to mind. Once we are eligible for a business loan, have a profitable automated business, and a business plan for EVs, we can go to the bank.
Step #3: Expand into the expensive EV space. Before I jump into this step, let’s talk about trusting corporations. As much as we want Turo to hang around forever, we need to prepare for life without them.
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Somewhere between Step #2 and Step #3, we need to build our own website and mailing list. All of our bookings can go through Turo because it adds a level of liability protection and renter protection against bad drivers. However, we want to start driving traffic to our website.
We also want to start building content around the EV space—things like how to drive, how to recharge them, and other neat things. We want to be creators and owners of this content. We do not want to depend on anyone.
Now, we go to the bank and present our automated, profitable business. We then make a business proposal for moving into the EV space. We have to show market research, our historical data, and pricing comparisons. Hopefully, we have been building this throughout our time in Step #2.
Become an Entrepreneur before Starting a Business
An excellent book to read on starting a physical business is “How to Start a Microbrewery.” We can apply many ideas for financing, business proposals, and creating a company to any physical start-up.
We got approved for a $500,000 business loan! Now it is time for a quick celebration and back to work. We have a lot to do. If we want to buy four new Electric Hummers, then we can.
Like we saw in the video, one variation of the Electric Hummer has roof panels that come off.
We need to create content on these tips and tricks, filling stations nearby, and scenic routes to drive in convertible mode. As we transition and add EVs, we will probably have to jump back into the business; it is such a departure from ICE vehicles.
Hopefully, we had a great business model before we bought our four Electric Hummers. Debt service, car washing, maintenance, etc., for each Electric Hummer, is $3,000/month (estimating). But since demand is so high, we can charge $500/day for the rental.
At 20 days a month capacity, we would bring in $10,000/month per vehicle. We probably have some level of management employees to pay, which is okay. We want to achieve Stress Freedom by removing ourselves from the equation. Let’s just say we earn $2,500/month per vehicle. That’s $10,000/month completely passive, and we are giving people jobs as well. We are also adding value to the renters who are considering moving into an EV.
Why didn’t we just buy an Electric Vehicle from the beginning? Yes, the first mover who straight up buys an Electric Hummer on day one beats us to market. They will earn all the easy money upfront. They win. Or do they?
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In two years, we will have a website, an automated business, a profitable business model, a YouTube Channel, and the bank on our side. We are making money from all angles! We have leverage.
Once you have a profitable business model, you can make more money by teaching your techniques. You can create an online class on EVs, business proposals, and starting a rental car business. The bank can help you expand further for other new vehicles that come out. What if you want to move into the boating, RV, or truck space. You already have an LLC and financial support from the bank. You’re Golden.
Inflation vs. Royalties
Sometimes the long run is what is going to give us the best foundation for the future. They may have beat us to the EV space, but guess what? There are going to be new vehicles coming every year. The person with the foresight to build a real business wins in the long run.
I have published 550+ articles on my blog and have 160+ ebooks on Amazon. All I have to do is turn on the advertising faucet and start making some profits. However, I am waiting until I have 1,000 books before even attempting to monetize my income stream. I know that having 1,000 books and 2,000 blog posts will position me to have passive income for the rest of my life.
I am building a million-dollar company, so what is the rush? I have a job, and I love the passive income grind. Like the EV scenario, I want to build a solid foundation of success that I can show to anyone.
What do you think about the new EVs coming out? Would you be interested in building an automated business around them? If you want to read more of my business articles, start with “Retire Rich, Retire Comfortable with a Business (book).”
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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