Rent Theory
The Business Plan
v3.2
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Executive Summary
My name is Maliik Morales, I’m sixteen years old and I am the formal Executive of
Rent Theory. Rent Theory, being a temporary name, started out as nothing more than a
personal goal for myself. I was at home one day watching videos of young entrepreneurs
that had made careers out of what started out as simple ideas. That night I said to myself
that I wanted to do something like that, I wanted to run my own business and I wanted it to
be successful. Well, here I am almost finished with the business plan. I can’t say it was
particularly easy, but I can say it was fun. I know that sounds crazy, a sixteen year old that
had fun building a business from the ground up, but for me it truly was an enjoyable
experience that has given me some basic insight into the business world.
On That note, let me introduce you to the business plan! I truly worked hard to
portray to you the vision I have in mind for this project and I hope that by you reading this,
you can truly grasp how large I want this project to grow. It is something I want a lot of
people to be apart of and enjoy just as much as I am and will, and hopefully if you are
reading this you are already enjoying this project too. This plan will guide you through the
most relevant needs and biggest goals I have in mind for this project. I was really excited
when writing it, so sometimes I may refer to Rent Theory as we, our or us. Sometimes I may
talk about myself in the first person.
Until we meet again, I’m Maliik. and I hope you enjoy and enjoy learning about Rent
Theory!
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1.
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3.
4.
Cover sheet
Executive summary (statement of the business purpose)
Table of contents
Body of the document
a. Business
i. Description of business
ii. Marketing
iii. Competition
iv. Operating procedures
v. Personnel
vi. Business insurance
b. Financial data
i. Loan applications
ii. Capital equipment and supply list
iii. Balance sheet
iv. Breakeven analysis
v. Profit and loss statements
vi. Three­year summary
vii. Detail by month, first year
viii. Detail by quarters, second and third year
ix. Assumptions upon which projections were based
x. Pro­forma cash flow
c. Supporting documents
i. Tax returns of principals (partners in the business) for last three years,
personal financial statements (all banks have these forms)
ii. Copy of franchise contract and all supporting documents provided by
the franchisor (for franchise businesses)
iii. Copy of proposed lease or purchase agreement for building space
iv. Copy of licenses and other legal documents
v. Copy of resumes of all principals
vi. Copies of letters of intent from suppliers, etc.
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Description and Vision
Mission Statement:
Rent Theory stands to provide consumers with a smart and innovative way to turn
their unused products into quick cash. We want to change the way people consider the
environment and how they act to preserve it. Rent Theory will provide consumers with the
ability to become renters to people looking to rent/lease any product and we enable people
looking to make money do so in a safe and easy way. Our idea strikes a larger goal which
is to become the market leader of what can be called Peer­To­­Peer Rental. We want to
help nurture this industry into something that will become as normal as going to the grocery
store.
Company Vision:
My vision and goal is to launch locally and expand into a national
service. I plan to use kickstarter.com to find investors who feel
this would be a great idea and want to fund this project.There is a
lot of need for research so the plan is to start small. I believe this is a market that has a
great ability to grow, simply because there is no service like the one I am planning. People
buy things everyday, and in certain circumstances they want the ability to earn money from
their goods while still owning them. I believe this small project has the necessary goals in
minds to fulfill this want and possibly grow into something greater.
Goals:
1. Find resources that provide the proper tools needed for successful growth.
E.G.:Website builder, advertisement, money processing...
2. Produce trial runs of the service that will provide us insight into how the final product
will be molded.
3. Get enough backers to make an initial investment that will provide the money
necessary for a start up.
4. Create a guideline of conduct among employees.
5. Define and design the step by step process by which we operate.
6. More goals and objectives will be added along the way.
History:
I was sitting in my bedroom one night watching videos of teenage entrepreneurs
who had made millions from their small companies. I had this passion to do something
great but I didn’t know what it was yet. That night I decided I wanted to make my own
business and I thought of a “person to person or peer­to­peer rental service” concept. With
my mom’s support I went to working on it right away. Rent Theory has pretty much been
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something I’ve planned alone and like any person with a vision, I’m open to anyone’s help
for improvements.
Principals:
I am a firm believer in Christ and being strong in faith to me is about showing love
and respect to everyone. Showing love and respect is exactly how I want to run my
business and they are the principals I want to run it by.
Definition of the Market and Marketing
Business Industry and Outlook:
Our first goal is to start small. In order to start anything, you have to know the
specifics of what you want to do first. The business of renting goods to people is pretty
rare.
I think the outlook for this industry is great. Because there are no other services that mirror
our model of consumer to consumer renting. Because we will not operate like other
peer­to­peer rental services, buying a product and then renting it out, we don’t have to
worry buying expenses. Our biggest cost concerns would be for shipping and insurance,
and depending on how many people are offering to rent their items, we never have to worry
about running out of inventory.
Marketing and Sales
Market:
Because the prospective industry is so new I haven’t gotten a chance nor do I really
know how to define a target market. Hopefully soon I can get a better idea of who our
customers are and what the demand for a Peer­to­peer renting service is.
If I did have to at least try to describe what we are aiming for, it would be people who
can afford to spend a little and people on a budget. Pretty much people looking for a way to
make a little quick money.
Channels for Distribution:
Online advertisement services are obvious possible routes for distribution and
getting the word out.
○ Google
○ Youtube
○ Facebook
○ Other Social Networks
○ Word of Mouth
Hopefully we can get the money to advertise on these networks with donation and money
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from backers.
For the most part, marketing will be as free as we can possibly make it to cut out
unnecessary costs. I’m getting at advertising on individually own websites that offer
affordable prices to advertise on their web page. I think the marketing budget should be set
at around $1,000 ­ $2,000 this can change at any time though depending on the asking
price of the vender.
Other great free or inexpensive opportunities are local papers like The Flyer and
local newspapers that cost only a few dollars to advertise with.
Description:
Apps and social networks have become apart of our daily lives and they make the things
that usually take time and effort faster and easier. Having an app for mobile users and
social network users could be very useful to our service by allowing them to rent on the fly,
without drastically interfering with their day.
Mobile App
This app should give customers the usability any desktop user would have. It should allow
them to quickly and easily search for items, post items, rate other users and send feedback
as they need to. A mobile app will help customers get quick access to our service and
make it easier for them to stick to their normal schedule. This also provides opportunity to
integrate a social environment that allows customers to easily share with their friends.
Social Network App
Coming Soon
Sales:
All sales will be conducted with PayPal or possibly another merchant service
depending on which has features that are the most compatible with our flow of operation.
Sales will be based on the amount of commission we collect and at this point the percent of
commission has not yet been discussed. I say the best way to compete with the
competitors is to start locally, with the press. The power of the press is a great thing, and if
they provide free coverage for a simple startup story, we can get some exposure.
I think the biggest part of marketing and getting the word out about Rent Theory would be to
host events in communities across the country that explain what this industry is and how it
effects our current understanding what we own and how we use it.
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Competitors
What are they doing now?
Swap.com:
One of our biggest competitors, swap.com, is a very new
company and they are doing a great job. They have a website that
revolves around the community and focuses on their items. Right
away, you see what items are out for sale and you are given the
opportunity for browse for more. As we have reflected earlier, we
consider the small market of local products a disadvantage to
customers and that is why we plan to use our mailing system to our
advantage. Small Update: Swap does guarantee customers will
receive their products when they swap. by mail! This option is
available, but costs the customer.
Zilok.com
Zilok was probably the first of its kind. With a concept in a new
market, Zilok has become a competitor to keep a close eye one.
However, Zilok’s age is what keeps it from its ultimate potential.
With careful review of the zilok.com website, it is easy to notice how
aged the design of the website is. The home page gives you a less
than enthusiastic appeal, and it looks as though the website is a bit
overcrowded. There are lots of buttons, menus and options to choose
from, but the overall flow of things feels very slow and over
complicated. We want to be able to learn from this and give
customers a modern and constant flow of shopping on our website.
As stated above, the small market hurts business. This is reflected
when we tried a search for available items in the area. Results came
up with about six items and they were rather lacking in appeal. (I
found about 13 items when searching on swap.com)
Where do competitors advertise, and how often?
I haven’t seen much of any advertisement anywhere, at all. Most of the competitors rely on
web searches that point customers their way.
What is their sales pitch?
How do competitors price?
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Pricing is set by each customer and a small “operational” fee is taken from each user
during the transaction.
How do they distribute?
Our competitors don’t distribute. Customers that find items on their websites must meet at
a location chosen by the parties involved in the transaction.
How do competitors position themselves?
Our competitors probably see themselves as pioneers in a new industry.
How do competitors react to threats?
I think our competitors are probably going to be receptive when it comes to threats and
competition
How do successful competitors differ from the lesser?
The most successful competitors feature very professional websites. In fact, they have
been up based off of at least a few years of experience. Both companies have experience
in this industry, something the smaller competitors do not. They also have been building up
their fan bases for the past few years, and both started out offering a very specific set of
products when they first started. I also notice that they have very heavily integrated
themselves into the major social networks, facebook and twitter.
What are their market shares?
Our Goal?
Providing trading of goods and services by means of a global computer network, a website
allowing users to rent items to other users and providing evaluative feedback and ratings of
users' goods and services, users' performance and overall transaction experience;
promoting the goods and services of others by providing on­line shoppers guide
information in the field of books, music, audiotapes, DVDs, videotapes, video games,
compact discs, floppy discs, electronics, home appliances and CD­ROMs in connection
therewith for trade or purchase.
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Modus Operandi
Through the research we have done about our competitors we can tell that it can
take up to a year to begin making a profit. We researched companies like like Zilok,
Rentalic, IRent2u, and Snapgoods. All of these are pretty young businesses and all of them
offer a very similar product. This is how they operate:
A user posts on the website an item they want someone to rent. Another user who
sees that post will notify the renter they are interested. The renter and rentee set the dates
for the rental time period and when they agree on a price they confirm the transaction and
their agreements through the website. The both parties sign some sort of contract to obey
the rules and it’s likely a down payment or a type of hold is placed to insure the safety or
replacement of an item if broken. When things are set in place the two meet up in person
and the renter will give the rentee the item. Finally the renter and rentee will meet again so
the items can be given back to the renter. Somewhere in the process of things, the
company takes out a fee and that’s how they make a profit.
It sounds like a great idea, and is pretty much how our service would be run,
however it holds a few flaws, and Rent Theory is aimed at fixing them. Let’s dissect a
couple things. We noted that when arrangements were made, both parties had to meet
each other. Now if done correctly meeting a stranger can be done safely. We assume no
personal information such as an address was provided to either person, but we just saw
this process as a flaw. To fix this, we would provide users with the ability to print out
pre­paid shipping labels that take their package to our facilities. There we would check the
contents of the package to be sure it is safe to send away and we would not any pre
existing damages to the product. This way no one is blamed for anything and neither party
has to be bothered with an intrusive and awkward meeting.
Another flawed concept to that model is that the market for each user is limited
down to their local community. If a user in Tampa wants to rent an ipad that happens to only
be available in Miami at that time, they can’t easily get that product. The amount of goods
in their market is limited to the users in their local community resulting is less of a choice in
what you can rent. With our plans for shipping, a buyer in california can rent a specific mp3
player from a renter in New York without a hitch. With a greater market field, we can be
more profitable and retain plenty of happy users.
Critical Needs:
● Prepaid shipping stickers
● Website info e.g. Deluxe...
● Merchant info e.g. paypal, google...
● Investors
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● Name
● Logo
● Office
● Attorney
● P.O. Box
● Shipping Supplies
http://www.irs.gov/businesses/small/article/0,,id=99336,00.html
https://www.usps.com/business/business­solutions.htm
http://www.uspto.gov/trademarks/teas/index.jsp
Target Market:
I want to target all consumers. I want to target people of the working class that may
not have the funds to buy a product at full price, or people who feel it isn’t worthwhile to
invest in something they may not use very often. There are several reasons a person may
want to rent used products.
General Profile:
Age: 18­45
Income: Low­ Average
Description: Typically aren’t the type of person to spend a lot money on new things.
They save what they have and are happy with what they have. They don’t need the newest
and shiniest to be satisfied. However, they might be young, energetic and want something
they can play with and enjoy while they have it.
Ages: 18­30
Lets face it, during these years most of us are in school and are busy setting up what will
become our future. Money can get tight when we are just starting to enter into the real
world. New jobs, homes and tons of other expenses become our first priorities and
spending money for new things isn’t always easiest. This age group can use our services
to get exactly what they need at a reasonable and affordable price and without breaking the
bank.
Ages: 31­45
By this time in life, we begin to settle into a routine and move into a steady lifestyle. We
start looking for the reward of our hard work and we like to give rewards to ourselves.
People in this age group will find using our service perfect for their needs. Rewarding
themselves with gifts that come at reasonable and affordable prices.
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Description of Services
Description:
The User Experience:
The main idea of Rent Theory is that we give people the ability to make money off of
the products they own by renting/leasing them to other people. To start small we’ll work with
one rental market, digital video cameras and camcorders. This is a simpler way for us to
decide if this idea would work with a larger market of items later on. So simply put, Users
will have an online storefront, with pages that can be customized with their own information.
A user or renter can post their product on their personal storefront with information about
the product along with pictures and an asking price. This price must be a reasonable
amount. A lessee will chose to accept the asking price or post a counter offer on the
storefront. If the renter accepts, the lessee will get rights to use the renters product. We
make money by including a commission or retainer fee.
Basic Process:
Person A for whatever reason wants to rent their camera so they log onto the Rent
Theory website. They will sign up and leave us their name, address, phone number and
email. They will turn in a form to rent a camera and will include a rental offer. They also sign
rental agreements that won’t hold us liable.
Person B is looking to rent a camera and they think the camera and rental price
Person A has posted is perfect. Person B who has already signed up and given us all of
their information will make request to rent from Person A. We will require Person B to
provide a credit card to act as a security deposit for the cost of the replacement of the
camera if damaged. Person B will later be notified when the camera has been shipped to
them.
Person A is now notified they have a request from Person B to rent their camera so
Person A will be prompted to send their camera to us with a pre­paid postage stamp.
*Both persons will agree to a pre­written contract between each other and are
legally bound to follow the rules. E.G. If the camera is damaged the deposit Person B
made will be used for a replacement. Person A cannot take legal action against us*
***User Product Breakdown***
Each user will need to specify the product they are attempting to rent on the website using
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the following guidelines for listing.
Include
○ Brand Name
○ Quality
○ Product Line Number/Name
○ List Price
○ Included Items
Once our supply chain receives the package, we will verify that the contents are safe
and the camera is fully functional. We will document the condition of the camera and verify
this with Person A to be sure we notice if any damages have been made by Person B.
Once we are through with the verification of the contents, we will repackage the camera
and send the items to Person B. Person B will be legally obligated to adhere to the rules of
the contract they agreed to, so they need to use the camera accordingly and return the
camera within the dates they agreed to. If Person B does not obey, they may be faced with
charges pulled from their deposit or credit card charges.
Once Person B is within one day of their time limit, they will be electronically notified
by email and prompted to send the camera back with a pre­paid postage stamp. When we
receive the product, we will proceed to verifying that the contents are safe and the camera
is fully functional with no undocumented damages. Once we have been through this
process, we will clear Person B from all debts and release their deposit. We will now notify
Person A that we have received their camera. Person A will have the choice of letting us
keep the camera for easy leasing or they can have it sent to their home.
If person A chooses to let us keep their product, they can go to their online storefront
and reset any values and availability status. Person A can also choose to let us freely rent
their product, as our own, and they get a gratuity. At any time Person A can request their
camera be sent back to their home. If Person A does not choose to let us keep their
product, we will have it sent back to their home, of course, free of charge.
Internal Operations:
The daily status of new users is constantly updated. “Website Content Surveyors”
review new profiles to approve content is appropriate. Website Content Surveyors also
approve transactions between the renter and the lessee. When transactions are approved,
we wait to receive packages. When we receive a shipment, the shipment will receive a
number. That number is tied to a “Package Content Surveyor” or PCS. The PCS will
survey the contents of the package to approve safety. Because we plan to launch dealing
with just camera’s we will hire 1 ­ 2 PCS’s who are familiar with digital camera and
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camcorder technology. They will test the cameras and approve them for shipment to the
lessee. If for any reason the package is not approved, person A will be notified that their
product was not approved including an explanation. Person B will also be notified that their
agreement order was cancelled. When the product has been approved by a PCS, we will
proceed to repackaging the product and sending it to the lessee.
Once the lessee sends the product back to us, we check the products for damages
and safety. If the product is damaged person B will be charged for the damages and
person A will be notified. If there are no damages and and the PCS deems the package
safe, we will notify person A. Person A can then chose to have their product sent back to
their home or let us keep it for faster renting.
A big part of the service will be giving customers the ability to use social networks, like
pinterest and twitter, to share what they are renting to their friends, family and essentially
the world. Imagine a new user posting an item for rent for the first time and they get the
option to connect their account to their social networks. They will then be able to post what
will essentially be a rental ad to the internet that all of their friends and family can see, If of
course they choose to do so. Giving each customer the ability to connect to social networks
will also be a great opportunity for publicity and advertisement.
Why this Service is Competitive:
There is a big difference between our service and other services. It is something I
noticed right away. The fact that all the other services that currently provide a type of
Peer­to­Peer Renting or Trading have a small market of available products, is what will
make our service so lucrative and competitive. Because services like IRent2u, Rentalic,
Rent.com or Zilok operate only on a local level, their field of market and availability is
limited unless users decide to foot a shipping bill. Our service wants to provide customers
access to a renter’s product no matter where in the country they live. Thus resulting in more
people with a larger pool of available items. But remember, right now these “items” are just
digital video cameras and camcorders. Another great characteristic is our service will
provide guaranteed insurance to a renter’s items, so they won’t have any issues if any of
their products are lost or broken. Every person who accepts a renter’s asking price will be
required to provide a credit card to act as a security deposit giving them more incentive to
take good care of the products they receive. Finally, users will be able to set reasonable
prices (based on our suggested price) for each item they want to rent. Giving people the
freedom to charge what they like is a priceless commodity, because every user should feel
empowered knowing they can control the cost of the items they own.
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Organization and Management
How the company is organized:
The company is run with three tiers of management.
1. Top level / Administrative level
2. Middle level / Management / Supervisory / Operational Employees
3. Low level / Affiliates and outside service providers (Banks, investors, loaner’s, etc...)
Proposed team team members:
Internal Operations:
○ Operations Manager
■ Website Content Surveyor
■ Package Content Surveyor
■ Packager/Unpacker
■ Customer service Representatives
Employees
PCS ­
Packagers and package surveyors (warehouse associates) will be needed to carry
out transaction and will have to meet specific criteria. A high school diploma is required, so
are basic computer skills. Associates will need to be able to lift up to 20 pounds.The
Warehouse Associate performs receiving, stock keeping, picking, packing and shipping
activities.
Handle all incoming shipments.
∙ Perform verification of purchased products and enter order receipts into WESCO’s
computer system.
∙ Perform quality assurance inspections when appropriate.
∙ Place received material, after segregating backorders, into proper warehouse storage
locations. When appropriate, relocate and consolidate material and notify management
of new bon/table locations.
∙ Pull, pack, weigh and label materials for shipment (including assemble & hold orders).
∙ Prepare bills of lading and express receipts.
∙ Assist in loading the trucks.
∙ Prepare local delivery records and complete applicable blocks on the pick ticket.
∙ Maintain appropriate forms pending return of material.
∙ Inspect condition of returned material prior to completing return authorization forms.
∙ Pull stock and return it to the correct location pending credit memo, sale or return to
supplier.
∙ Clean warehouse and trucking/parking area.
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∙ Assemble and disassemble bins, racks, shelves and tables as needed.
∙ Administer preventative maintenance programs to delivery vehicles and warehouse
equipment to ensure proper functioning and safety practices for warehouse operations.
∙ Record verbal/written complaints from customers concerning dissatisfaction with product
or service provided. Process the complaint by responding to the customer with the action
taken to correct the problem or directing the complaint department supervisor/manager
where necessary.
∙ Maintain stock as needed.
External Operations
○ Professional staff
■ Attorney
■ Internet Consultant / Web Designer
■ Advertiser
■ Investors
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