With the rise in popularity of golfing and leisure activities in recent years, starting a golf cart rental business can be a lucrative venture.
Golf carts are not only essential for navigating golf courses, but they also serve as convenient transportation options in various recreational and residential settings.
If you’re considering entering this booming industry, this step-by-step guide will provide you with the essential insights and strategies to kickstart your golf cart rental business successfully.
Our Verdict
- Know your course: Consider the terrain and choose carts with enough power and features (e.g., cup holders, shade).
- Target beyond golfers: Offer rentals for events, weddings, or exploring nearby attractions.
- Embrace tech: Utilize online booking systems and GPS tracking for convenience and security.
- Register with the proper legal authorities.
- Invest in golf cart rental software for security and tracking.
- Buy only small golf carts in a huge number.
- Compromise on the quality of your equipment.
- Neglect insurance: Get proper insurance coverage for damage, theft, and injuries.
- Skip maintenance: Ensure carts are regularly serviced for safety and customer satisfaction.
Research the Market
Researching what you’re stepping into is the first step towards making sure your golf cart rental business proceeds seamlessly.
Researching the market entails learning about the environment and considering the niche with respect to your target audience, location, and demand.
Some of the questions you might want to ask yourself before starting your golf cart rental business are:
Required Equipment and Average Cost
Starting a Golf Cart Rental Business requires a variety of equipment and resources. Here’s a comprehensive list, along with average costs:
- Golf Carts
- Electric Golf Carts: $5,000 $10,000 each
- Gasoline Golf Carts: $4,000 $8,000 each
- Fleet Size: Depends on expected demand, typically starting with 10-20 carts.
- Total Cost: $50,000 $200,000 (for a fleet of 10-20 carts)
- Maintenance Equipment
- Battery Chargers (for electric carts): $300 $600 each
- Tire Repair Kits: $50 $100 each
- Basic Tool Kit: $100 $300
- Spare Parts Inventory: $1,000 $5,000 (initial stock)
- Operational Infrastructure
- Storage Facility (Rent or Purchase): $500 $2,000/month (rent) or $50,000 $200,000 (purchase)
- Office Space and Equipment: $1,000 $5,000 (setup)
- Security System: $500 $2,000
- Administrative Supplies
- Computer: $1,000 $2,500
- Reservation System/Software: $500 $1,500 annually
- Office Supplies: $100 $500
- Marketing and Advertising
- Website Development: $1,000 $5,000
- Local Advertising (Flyers, Local Magazines, etc.): $500 $2,000 initially
- Online Advertising (Google Ads, Social Media, etc.): $500 $2,000/month
- Insurance and Legal Costs
- Business Insurance: $1,000 $5,000 annually
- Legal Fees for Business Setup: $500 $2,000
- Miscellaneous
- Uniforms for Staff: $100 $500 per person
- Signage: $200 $1,000
- Customer Safety Gear (Helmets, etc., if required): $50 $200 per set
Estimated Total Initial Cost
Depending on the size of the fleet and the specifics of the operation, the total initial investment can range from approximately $60,000 to $250,000 or more. Here’s a breakdown based on a mid-range estimate:
- Golf Carts: $125,000 (for 15 electric carts at $8,500 each)
- Maintenance Equipment: $4,000
- Operational Infrastructure: $10,000 (for renting storage and basic setup)
- Administrative Supplies: $2,500
- Marketing and Advertising: $4,000 (initial setup and first few months)
- Insurance and Legal Costs: $3,000
- Miscellaneous: $2,000
Grand Total: Approximately $150,000 for initial setup.
This estimate provides a general idea and can vary based on location, size of operation, and specific business decisions.
What are the trends in the golf cart rental market?
The golf cart rental market has seen growth in recent years, with many people preferring to rent them instead of owning them.
Golf carts aren’t only used for golf courses anymore. Many tourists find them a great transport as well, leading to an increase in vacation rentals offering golf carts for booking.
According to a report by IBIS World, “The Golf Cart Rentals industry has experienced steady growth over the past five years, with industry revenue estimated to increase at a CAGR of 3.3% to $422.0 million over the five years to 2024, including an increase of 1.5% in 2024 alone.”
Factors that lead to increased rentals include, but aren’t limited to:
- Increased interest in golf
- Affordability of golf cart rentals
- Effective means of temporary transportation for tourists
- COVID-friendly transport
How big is the golf cart rental industry?
With a revenue of over $420 million, the industry is sizable. However, despite the size of the industry, market share concentration for golf cart rentals is still pretty low in the USA.
This means the total revenue generated isn’t primarily attributed to the top golf cart rental companies. In fact, the top four golf cart rental businesses generate less than 40% of the total revenue.
With an average concentration of 39% in the rental and leasing industry in the USA, most of the golf cart rentals are private course fleet rentals, followed by public course fleet rentals.
Individual customer rentals and other business rentals form the smallest share of the golf cart rental industry.
What are the competitors doing, and what are they avoiding?
Golf cart rental companies mostly operate in specific locations. Who you’re competing with is determined by where you’re starting your golf cart rental business.
To best study your competition, you can rent a cart for a day and see for yourself how things operate. If you don’t want to get that close, you can also run an online analysis for your desired area and check which companies are ranking at the top.
Study their website, visit their location, ask around wherever you can, and you’ll gather a lot of information. One of the best things you can learn from your competitors is where they run into trouble or what some of the hardest situations are to handle.
In short, by assessing all the roadblocks that you may encounter in the future, you can plan ahead and develop protective measures.
Who is the target audience?
Your target audience can be one or more of the following:.
- Golf enthusiasts
- Tourists
- Hotels
- Traveling and tour agencies
- Vacation rentals
This is by no means an exhaustive list, and many adventure seekers just want to rent golf carts for fun.
Studying the demographics of your audience will help you decide on an effective marketing strategy and business plan.
It is recommended to ask your customers what they’ll be renting the golf carts for. You may not always get the right answer, but going forward, this data will prove to be helpful.
Is starting a golf cart rental business worth it?
It definitely seems that golf cart rentals are a good business to invest in. It isn’t easy to enter the business because of its startup costs. However, with the right steps, this hurdle can be leveraged.
That said, there are some important considerations that need to be considered before starting a golf cart rental business.
Build Your Golf Cart Rental Brand Name
Branding is important for every business. While the chances of new entrants are low in the golf cart rental business, there are many established names that still prove to be a challenge for new names to find their own place.
Choose a Catchy Brand Name
The first step towards branding is selecting a name. You can take inspiration from your location if it is a tourist attraction, something your city is known for, or something fun that you want to build the image of your business around.
Choose a Logo
Hire a designer to create an original logo. You’ll also want to stick to a specific color theme. You can register your logo and brand colors to make sure they are copyright protected.
Choose a Brand Message and Theme
A one-liner is a good way to entice interest. When you’re marketing your business, this brand message will make a great addition to your advertisements. You can display banners and posters in hotel lobbies, golf courses, and other tourist attractions where advertisements are allowed.
Select a Marketing Strategy
A marketing strategy will help you decide which elements are required.
For instance, if you’re marketing online, you’ll need to buy hosting and a domain for a website. This domain is also part of your branding. Deciding the right name will be crucial to your visibility.
Get a Trademark
While it isn’t necessary to register a trademark, it is a good way to protect yourself from copyright.
Before you decide on your name and logo, make sure they are trademark-free. Bigger companies usually have a trademark on their brand image, and they can sue you for any violation of copyright.
You can check the US Patent and Trademark Office’s directory to see if anything you’re using is already owned by another entity.
Select a Business Plan
A business plan will give you the right direction that you need to head in. Formulating a clear business plan helps avoid hurdles and overhead while steering the operations in a productive way.
Prepare an Executive Summary
Outline how things will work, and make sure everyone you’re working with has a clear picture.
- Where is your golf cart rental based, and what will it offer? Outline all services.
- Who is your target audience, and how will you reach them? Outline all channels for approaching the right customers.
- What is the main focus and goal of your business?
- What are the SOPs all staff need to keep in mind?
- What is the hierarchy of operations, and who reports to whom?
Even if it’s a family-run business, you’d want to define these variables early on to prevent any potential issues in the future.
Outline the goals of Your Golf Cart Rental Business
The goals of your golf cart rental business should primarily be defined in terms of profit. But that’s not all.
If you’re scaling up, you’ll want to consider a number of key performance indicators.
- Net profit Margin: This margin is evaluated as a ratio of your net profit and revenue.
- ROI: The return on investment determines the success of your investments. It is a ratio of net income and investment.
- Debt-to-Equity Ratio: This is a good KPI to consider if your golf cart rental business has shareholders.
- Cost per Acquisition: How much do you need to invest to acquire a customer? This helps you allot the right amount of expenses to marketing.
- Customer Lifetime Value: This value lets you use the CPA to determine whether you’re spending more on acquiring a particular person than the profit they bring to your business.
Develop a Financial Plan
A financial plan is needed to make sure you have a clear idea of the expenses. This financial plan will remain in effect going forward. You’d want to consider many possibilities before settling on a definitive plan that works for you.
A good KPI to consider here is the CAC payback period, which helps you determine how long it will take your business to earn back the CPA.
You’d want this payback period to be short, as it indicates a higher ROI. This indicator helps you define your marketing strategies and outline a good financial plan.
Conduct a SWOT Analysis
- Strengths:
- Your location: If you’re close to a tourist attraction or in a city that attracts a lot of tourists, you’ve got your first strength.
- Your prices: If your price for every rental is lower than that of your competition, you’ve got your second strength to leverage.
- Extra Accessories: Many golf cart rental services provide accessories to help tourists with luggage.
- Trained Staff: Having experienced staff around is a great bonus for customers who don’t know their way around.
- Partnerships with Hotels: If you’ve partnered up with a local resort or hotel, you can directly reach more people.
- Weaknesses:
- Competition: If there are already many options for golf cart rentals in the location you’ve chosen, you’re at a disadvantage.
- Seasonal Disadvantage: If the location you’ve chosen only attracts tourists in a particular season, you might be at a disadvantage. Similarly, in areas where it snows heavily, golf carts might not be the preferred mode of transport for many people.
- Legal Restrictions: If you’re near a location that restricts golf carts, you’re not going to benefit greatly from it.
- Opportunities:
- Including other services by expanding your business.
- Partnerships with vacation rentals, hotels, golf courses, event organizers, etc.
- Using software for various business operations
- Utilizing online services to publicize.
- Threats:
- Government policies regarding tourism, golf cart rentals, etc.
- Fuel prices may cause decreased interest.
- Cost of maintaining the equipment
- Security risks associated with the vehicles
- Threat from competition in your location and new entrants
Prepare Golf Cart Rental Management Plan
To address the threats, you’ll need to develop a risk management plan. While you’re preparing the budget, set aside a contingency fund so you always have a buffer for unexpected outcomes.
Forecasting is a good way to manage financial risks. It is a prediction based on past financial patterns and exterior elements that are likely to affect your business. This prediction helps prepare for the future.
Businesses don’t always stick strictly to forecasting. It is simply a measure to evaluate how likely things are to go right in the future.
Register Your Business
Registering your business is crucial to legalizing it. Below are the necessary consideration you should take into account while registering your business.
Evaluate the Legal Requirements
In most states, you can register your business by contacting the Secretary of State’s office, a Business Bureau, or a Business Agency.
If you use a fictitious name for your business, which is just an alias, your state may need you to register that as a DBA. Doing Business As, or DBA, isn’t required in all states. Depending on where you’re operating, you might need to check whether the local government requires it.
Once you’ve registered your business, you might need to check with your state tax board or franchise tax board.
These Initial Reports need to be filed within 90 days of your business registration, although you might not need to file them depending on your business structure.
Before registering, determine the right business structure for yourself.
Select a Business Structure
There are various business structures to choose from. Understanding the difference between a company and a business will help you make the right choice.
You should consult a legal advisor or hire a business formation service to determine the right structure. This business structure will affect how you pay taxes.
- Sole Proprietorship
Establishing a sole proprietorship is a straightforward process and provides you with full authority over your business operations. If you engage in business activities without registering as any other type of business entity, you are automatically classified as a sole proprietorship.
- LLC
An LLC (Limited Liability Company) allows you to enjoy the advantages of both corporate and partnership business structures.
LLCs provide protection from personal liability in most cases, meaning your personal assets, such as your car, home, and savings accounts, are not typically at risk if your LLC encounters bankruptcy or legal disputes.
- Partnership
Partnerships are the most straightforward arrangement for two or more individuals to jointly own a business. There are two prevalent types of partnerships: limited partnerships (LP) and limited liability partnerships (LLP).
- LP: Limited partnerships typically consist of one general partner with unlimited liability, while all other partners have limited liability. Partners with limited liability often have restricted control over the company, as outlined in a partnership agreement.
- LLP: Limited liability partnerships (LLPs) share similarities with limited partnerships but afford limited liability to all owners. In an LLP, each partner is shielded from debts incurred by the partnership and is not held responsible for the actions of other partners.
- Corporation
There are a handful of types of corporations. The most common are C and S corporations.
- C corp: A corporation, often referred to as a C corp, is a distinct legal entity independent from its owners. Corporations have the capability to generate profits, undergo taxation, and be held legally accountable.
- S corp: An S corporation, also known as an S corp, is a unique form of corporation specifically structured to circumvent the double taxation disadvantage associated with standard C corporations. S corps enable profits, as well as certain losses, to be directly transferred to the personal income of owners without being subjected to corporate tax rates.
- Cooperative
A cooperative is a business or organization owned and operated for the mutual benefit of its users. Profits and earnings generated by the cooperative are distributed among its members, who are also referred to as user-owners.
Register Your Golf Cart Rental as a Tax-Paying Entity
Next, you want to establish yourself as a transparent entity and register with the relevant authorities to pay your taxes.
Get an EIN
You can order your federal employer identification number online once you’ve registered your business. The Employer Tax Identification Number, shortened as EIN or TIN, is required to mark your business as a tax-paying entity.
Get a Sales Tax License
A Sales Tax License or seller’s permit grants you permission to collect sales tax from customers and report these amounts to the state at regular intervals (either monthly, quarterly, or annually).
Obtaining a seller’s permit typically does not incur any fees, although security deposits may sometimes be required.
You can get this permit from your Secretary of State’s office.
Get the Required Licenses to Start Your Golf Cart Rental Business
A number of licenses may be required to start your golf cart rental business. State regulations differ depending on what kind of businesses require what licenses. To be sure, visit local government websites to find out what you need to do.
- Vehicle Permits
Vehicle permits may be required, depending on your state. You must have a driver’s license and a clean driving record as well.
The cost of a vehicle permit may differ from state to state. Visit your state government’s website to find out more about vehicle permits and licenses.
- Golf Cart Rental License
Rental licenses are needed in most states. However, the regulations for golf cart rentals may differ. Visit your state government’s website for information regarding rentals.
- Zonal Permit
The zoning permit is required if you are turning a building into another building, whether through renovation or simply by changing what it is used for. For instance, changing a home into a zonal office.
Depending on your state, you might have different regulations regarding zonal permits. The local government issues these permits once you submit the necessary documents indicating the proposed changes you intend to make in a specific area.
You’ll need to provide various documents and a fee. In some cases, attend local zoning meetings before a decision is reached regarding your zoning permit.
- Signage Permit
You’ll likely be putting up a sign to mark your business. You’ll need a permit for that as well.
After you’ve obtained a zoning permit, you can apply for a signage permit. You’ll be required to put in the dimensions of the sign, the material used for its construction, and its location.
- Liability Insurance
Liability insurance is needed to protect you if a customer suffers a physical injury while driving. Golf carts can be easy to damage, and drivers can get reckless with them.
Protecting yourself financially from any liability is a good step to protect your golf cart rental business. Contact a legal advisor to determine the best course of action and get your business insured.
Set a Budget to Start Your Golf Cart Rental Business
Starting a golf cart rental business can be costly. You might need to get some investments to get started
Open a Business Bank Account
You’ll need your EIN as well as your business license to show you’re a proper business organization before you can open a business bank account.
Choosing the right bank and the right account type is important. Before you open your business bank account, make sure you know what you’re doing.
Get Funds
Getting the required funds to set up your business can be challenging. You’ll need to look for investors.
Business loans, crowdsourcing, angel investors, and lines of credit are good options.
Some hotels and tourist agencies might be good partners. Reaching out to local golf event organizers is another good idea.
Decide the Pricing of Golf Cart Rental Services
Keeping your pricing realistic is the way to do it. Creating monthly and weekly packages is another great way to attract traffic.
Your final pricing will be determined by the average pricing of your competitors, your location, the size and capacity of the cart, and any added strengths you might have that you can use to leverage for higher prices.
- Average Daily Pricing: $100-$200
- Average Weekly Pricing: $200-$400
- Average Monthly Pricing: $400-$600
Average Cost of Starting a Golf Cart Rental Business
The major expense for starting your golf cart rental business is acquiring a fleet.
A golf cart costs between $7000 and $9000. There are two, four, and six-seater golf carts, and it’s always a good idea to have all kinds in your fleet. Their prices may be less than $7000 or exceed $9000, depending on where you’re buying.
The cost of your fleet depends on how many and what capacity of golf carts you choose to buy.
Obtaining permits and licenses can cost between $500 and $1500, depending on your state and business structure.
Golf carts require maintenance on a regular basis. The equipment for that can cost between $5000 and $10,000 or more, depending on the size of your fleet.
Registering your business may have additional costs. And if you register for a trademark, it will cost you even more.
With added marketing costs and any funds you may need to put towards a business bank account, you can expect a cost of $30,000–$70,000 for starting your golf cart rental business.
For a better result, calculate your business expenses here:
Budget Calculator
Acquire Equipment
Acquiring equipment is next. Choosing the right place to buy your gear will help you save. But compromise on quality, and you might end up investing more than you should.
Determine the number of golf carts required.
You can get mixed sizes of golf carts and set different daily, weekly, and monthly prices. With a variety of different carts, you can create packages and offer added accessories for different golf carts.
Determine the number of golf carts required.
Golf carts need maintenance regularly. If you want your golf carts to last a long time and provide a consistently good experience to customers, you’d want to keep them in top shape.
Getting other accessories for golf carts is an added bonus for renters. Coolers, phone holders, covers, extra tires, changing equipment, etc. are good to have around.
If it snows where you are, you should also get snow tires for the winter.
Acquire training material, safety equipment, and consumables.
Training material for your crew is good if you want them to handle situations they couldn’t have been prepared for.
Fire extinguishers, first aid kits, smoke detectors, etc. are some of the safety equipment you’ll need.
Consumables such as batteries, cleaning supplies, tires, etc. should also be part of your inventory.
Hire and Train Your Crew
Hiring a crew isn’t enough; you must train them to ensure seamless operations.
You can also get golf cart rental software to keep track of all your carts so security issues don’t arise. Your crew should be trained to use it effectively and keep track of things.
This software should also be able to keep track of inventory and other operations to facilitate your business processes.
Set up a booking and reservation system.
Setting up an online booking and reservation system is an important part of today’s rental industry.
With an increasing trend of online bookings, 69% of bookings are made online, while 31% are made offline. The trend is likely to see even more growth with online booking systems becoming more popular.
You can get an app or have a booking system on your website.
Market your Golf Cart Rental Business
There are numerous avenues for promoting your golf cart rental business.
Get a website to reach a wider audience.
With an increase in the popularity of online booking, you should make sure your golf cart rental business doesn’t only have a website; it should also have a booking portal.
Partner up with tourist attractions, golf courses, and vacation rentals.
Local tourist spots, travel agencies, golf courses, tournaments, and vacation rentals are great options to reach a wider audience.
Golf carts carry luggage and small children and are a great way to get around. Using the right marketing tactics, you can attract a lot of tourists and even locals.
Advertise through social media.
Social media is a great way to get your name out there. Advertise your golf cart rental business on social media platforms. Keep track of how the traffic engages with you.
Making decisions about your business and marketing strategy becomes easy with analytical tools.
Invest in paid advertising.
Investing in paid advertising means running ads on social media and search engines. Since online booking is the prevalent mode of renting golf carts, with paid ads and increased visibility, you have a chance to reach more people.
Important Considerations
- Fuel prices may cause an overhead. Always be on the lookout for any changes in prices and plan ahead.
- Monthly rentals may not require concern for fuel prices. But rising fuel prices might lead to decreased interest by customers.
- Customers should have a valid driver’s license and a clean driving history for at least the past 5 years.
- Customer support should be available 24/7.
FAQs
1. Is owning a golf course profitable?
Owning a golf course can be profitable, but success depends on various factors such as location, management efficiency, operating costs, and market demand.
Starting a golf cart rental business for not just golf but other purposes can make it more profitable.
2. Can you lease a golf cart?
Yes. You can lease a golf cart while you are traveling or just for fun. Many golf cart rentals offer daily, weekly, and monthly options for leasing golf carts.
3. How much is the rent to own golf carts?
It depends on the size and location, but smaller golf carts can be rented for less than $100 per day. The bigger ones might cost more.
