Putt-putting down the road to riches – Peter Burns
Peter Burns is what is called a quick study.
After only one year in college, he dropped out and launched a business that was almost instantly successful.
Burns’ ride to riches involves a vehicle legal on U.S. roadways only since 1977: the moped.
As a 19-year-old University of Virginia freshman, Burns enrolled in a course in enterpreneurship. His assignment: build a business on paper.
Remembering having rented a moped to get around on a Bermuda vacation, he built a classroom business of renting mopeds at U.S. island vacation spas.
The professor was impressed. So much so, in fact, that he urged Burns to try the business during the upcoming summer break. That was in May, 1977. In August Burns phoned the professor from Nantucket Island in Massachusetts to say he would not be returning to school. In four short months he had grossed $50,000 renting mopeds to tourists.
“I wasn’t thinking about school any more,” says Burns.
On Nantucket, a site Burns had chosen because his family often vacationed there, the young entrepreneur had rented a small, dirt corner lot, bought a card table and a cash box, and invested $5,000 in buying 15 mopeds.
“the first two weeks were so busy that I called my father to borrow $10,000 so I could buy 25 more mopeds,” Burns says. The mopeds–top speed, 25–get 100 miles per gallon. Tourists loved them.
When Nantucket’s season ended, Burns loaded the mopeds into a truck and headed for Florida.
Sanibel Island, off Fort Myers, proved so profitable he made it headquarters for his Fun Rentals company. From there 40 employes run 11 other sites, all in swanky resort areas such as Boothbay Harbor in Maine, St. Simons and Jekyll islands in Georgia, seashore towns in New Jersey and Captiva and Marco islands in Florida.
“I select only places that have plenty of scenery, slow traffic, a lengthy tourist season with an affluent clientele and a downtown area that forms a nucleus of a town,” Burns explains.
Like many entrepreneurs today, he has jumped into franchising. He sold his first franchise last year, at Florida’s Clearwater Beach.
For $35,000, the franchisee is provided nearly everything but the rolling stock. Burns buys the Puchs mopeds, leasing them to the franchisee or selling them to him at less than $200 each, half the retail price.
Fun Rentals now has 500 mopeds on the road. Rentals are $8 an hour (weekly rate: $100). Most of the sites also have added bicycles and golf carts for rent.
To increase profit still further, Burns now sells vacation supplies such as suntan lotion, sunglasses and beach towels at Fun Rentals outlets.
“these tourist items have increased my daily average sales and rentals on Sanibel Island, for example, to $1,900,” he says, explaining that his break-even point is $450 daily.
“You can see that the profit margin in this business is enormous. And it is an all-cash business.
“I have made a lot of money in the last eight years. In addition, I have bought quite a few parcels of land in these resort areas where I have shops. So now my goal is to have 100 franchises and 100 pieces of the most valuable property in the country’s resort areas.”
Burns’ Fun Rentals is grossing more than $1 million a year.
Then there are those real estate holdings. On Sanibel Island, one of Florida’s most expensive resort areas, Burns has bought three acres surrounding his Fun Rental site. And earlier this year he negotiated a $1 million purchase of land and buildings on Nantucket.
For a 28-year-old, it is an auspicious start on a business career–and all the more so because, when it comes to mopeds, Burns admits that “I couldn’t fix one if I had to.”
COPYRIGHT 1985 U.S. Chamber of Commerce
COPYRIGHT 2004 Gale Group