Rebranding Tapprs

I have to confess.

Inspite of all the cribbing in my earlier posts about how rentals is not exactly a great market and how the market signals aren’t great, I have been hooked onto the idea of Tapprs (mind you, not to the idea of rentals).

The reason is, I feel Tapprs could be woven into a nice brand if done well. Not necessarily rentals, could be anything else too. I have stuck my neck out on Tapprs. I can’t explain why. Perhaps, its because it’s your baby, even if its ill-conceived. Or perhaps, I feel that it needs to be given more time and patience.

I have put all my tech ideas on hold to give Tapprs some concentrated effort in the coming 1-2 months.

Whatever, I am here now. Looking at re-branding Tapprs. I don’t want Tapprs to be identified as a rental place and would love to create a brand out of it.

I want Tapprs to be attributed with a few characteristics. And that means change from the ground up.

I’ve tried to work things out towards that effect. So here goes.

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The economics of running a rental business (updated)

You might know already that I run Tapprs, an online photography & travel equipment rental place.

Thought I will share my view of the economics of running such a business, at least at a small scale such as it is now.  Tapprs is still in the validation phase, but the numbers shown here should be relevant even if scaled up. All numbers are actuals, except for revenue.

Disclaimer: I have no accounting background and there could be mistakes on my part. Please do point it out if you find any.

Initial funding:

Assume that the operations began on June 1.

As the sole owner, I put in Rs 1 lakh as equity capital. This is free money (don’t have to pay interest on it). And then I lend Rs 2lakh to the business from my pocket which I charge an interest of 12% annually (realistically, no one would lend to such a business without collateral and interest rates will be much higher).  That means Tapprs would have an interest payout of Rs 24000 every year on it until paid back.

Use of funds:

Tapprs needs to start. For which, I do these transactions on June 1.

So, at the end of the day, my balance sheet looks like

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Tapprs rental as a business

‘Why do you want to get into equipment rentals?’

A financially savvy friend of mine asked me.

Few of you might know that I handle Tapprs as a hobby venture.

Equipment rental, esp dealing with equipment like photography gear is

• a high risk business and equipment damages can hurt returns
• is dependent on volumes and return per rental activity is small
• is capital intensive (to make more money, you need to pump in more and buy more equipment)
• break even period is about 75-100 days worth of rental which in calendar terms could work out to more than a year for a very successful rental shop and could take 3 years for those that aren’t as successful. In 3 years, the equipment could fall out of favor from the user crowd.

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