I didn’t plan to create a Turo business.
I began my Turo Journey in January, 2018 with one vehicle hoping to simply cover the payment and insurance on a secondary vehicle I only needed as a winter backup for my convertible daily driver in Michigan. Within a month I saw the business opportunity and ended up scaling to a fleet of 20 vehicles in 15 months, almost replaced my strong six-figure corporate income, retired to do Turo full-time and begin other businesses. Here are three mistakes I made along the way.
Scaled my fleet before creating my LLC
My Turo business was an unintentional business in the beginning, but once I got rolling, I rolled fast. My fleet was financed under my personal credit and then, at 20 vehicles, I created my LLC. Once the LLC was created, I then learned what an administrative, and financial fiasco it would be moving the whole fleet from my personal ownership to my LLC ownership. I never did.
The lesson here is to begin your LLC right away once you know you want to do this as a business and build your business there to protect your personal debt to income ratio. Thankfully I didn’t have any large purchases planned and my FICO actually improved from 740 to 820 as I financed/leased my fleet. But if I had wanted to get a large mortgage, it could have been problematic.
Added some vehicles with light beige/tan interior
Dude, I can drive a vehicle five years and never get a stain on the upholstery. What is it with renters? I was completely naive in the beginning, not expecting renters to be the nasty, dirty schlubs they can be.
My light upholstery needed a deep shampooing at least once a month and I actually had to totally replace it once because it couldn’t be cleaned. I also got a couple 4 star reviews because of filth that I didn’t have time to shampoo on quick turn-around bookings. The lesson, you really need to stick with dark leather interior.
Not aligning with my long-term goals
Before I stumbled into Turo my goal was to retire from the corporate world in 2019 at the age of 51, create a location independent business I could run from anywhere, and spend much of my time traveling and living in warm tropical places. Instead I started a Turo business, tied to 20 depreciating assets positioned in a specific (cold, snowy) city, that required my daily hands-on management.
Forget living and working remotely. Forget long vacations. Hell, even managing a weekend away was a challenge. And on major holidays I wasn’t relaxing and enjoying the holiday, I was washing, prepping, and flipping vehicles from guest to guest. Snoozing my operation also meant snoozing my income against payments and insurance premiums that don’t snooze.
The lesson here is that, unless you hire a manager or simply let others co-host your vehicles, this is not a passive income business and it requires you to be present, hands-on, day in and day out. So before you scale too big, please make sure that you’re aligning with your own personal long-term goals. If not, you’ve just built a prison for yourself.
If you’ve been at this a while, what mistakes have you made?
Great post. Did you financed your fleet?