Bike rental shops sell out bicycles to clients, who are often, but not always, visitors. Bikes are often leased for a few hours to explore the area recreationally. However, customers may include college students on campus or those who rent for practical reasons. Your company might be a stand-alone store, part of a bike sales and servicing operation, or affiliated with a hotel or other hospitality establishment.
Table of Contents
Follow these ten steps to start a bike rental business:
Plan your Bike Rental Company
Make your Bike Rental Company a Legal Entity.
Taxes must be registered for your bike rental business.
Create a Business Bank Account and a Credit Card
Create Accounting for Your Bike Rental Company
Get the Permits and Licenses You Need for Your Bike Rental Business
Get Bike Rental Company Insurance
Define your Bike Rental Company Brand
Make a website for your bike rental business.
Configure your Business Phone System
Starting a company entails more than just registering it with the state. This basic guide to beginning a bike rental company has been put together by us. These stages will guarantee that your new company is well-planned, correctly registered, and legally compliant.
STEP 1: Make a business plan.
A well-thought-out strategy is vital for entrepreneur success. It will assist you in mapping out the intricacies of your organisation and uncovering some unknowns. Consider the following crucial topics:
What are the initial and continuing expenses?
Who is your intended audience?
How much money may you charge your customers?
Fortunately, we have done a lot of the legwork for you.
What are the expenses of starting a bike rental business?
This bike rental manager quotes $175,000 in beginning fees for the firm in which he’s working. (There’s also a fascinating online piece about the day-to-day difficulties of such a surgery.)
Fortunately, this kind of company may be launched with significantly less money. Consider a store with 20 motorcycles.
Fleet expenditures and associated equipment — If you buy 20 bikes for $250 each, your initial fleet will cost $5,000. This is at the low end of new bike prices, and bear in mind that quality and longevity are vital since they will be abused. Visit this fleet-sales website to get an estimate of expenses. You may also spend another $1,000-$2,000 or more on accessories like helmets and bike locks.
Repairs — This varies greatly, but you may spend $5,000 or more each year on tools, parts, and new motorcycles. In a same vein, develop a partnership with a bike goods distributor so that you always have access to replacement parts and speedy delivery. Your motorcycles should not be out of commission for longer than two days.
Staff – If you have no workers, this cost might vary from your personal income projections to numerous staffers at a popular location or more than one. Unless you can handle the work yourself, make sure you have at least one bike mechanic. Allow at least $18 in compensation and withholdings for each hour covered.
Related products – What else can you market to your customers?
Rent – This may vary from free if you are provided room in a hotel for the stay of their visitors to market rates. Rent the minimum amount of space you’ll need for bike storage, display of associated items (if applicable), and client transactions.
Check your local prices for liability insurance. Although you will need your clients to sign disclaimers freeing you from liability for accidents, this is unlikely to provide enough protection if the condition of the bike is the cause of the accident.
Professional services — You should hire a lawyer to draught your customer waiver and an accountant to estimate your launch expenses. In addition, for logos, signs, and website development, you may wish to engage a graphic designer and a web developer. These expenses might total at least $1,000.
What are the continuing costs of running a bike rental business?
Fleet charges will most likely be your most significant continuing expense. This covers the requirement for new motorcycles as well as major and small maintenance. Employee expenditures may also mount up, so make sure you plan a big enough workforce to satisfy demands but not over-staffing.
Who is the intended audience?
Your consumers are most likely tourists who enjoy an active lifestyle. They’re probably new with the area, eager to become engaged with your business, and open to your recommendations for attractions to visit or avoid. You should also be open to their post-ride evaluations, since they may provide useful information, such as which attractions to add to your list of suggested sites
How does a bike rental company earn money?
You may hire bikes by the hour, for a fixed cost, or a combination of the two. Some bike rental shops also offer riding and tourism-related items (mugs, water bottles, t-shirts, etc.) You could also think about selling your fleet bikes when they are replaced by newer versions.
How much money may you charge your customers?
Rental fees vary by region and season, but may often start at $8 or $9 per hour. Consider fee discounts for daypart or full-day (or even all weekend) rents, since it is in your economic advantage for each bike to be rented as often as possible.
Consult this website to learn what rivals are charging (and even if it is in your financial interest to launch such a company in a certain place).
How much money can a bike rental company make?
Many elements influence your profitability, from the duration of your season (if your environment is mild, your company may operate year-round, but elsewhere it may be a three-month season at most) to other services supplied. In other words, if your rental company is part of a bicycle sales and servicing operation, your season will likely be longer than if it is a separate rental facility.
How can you increase the profitability of your company?
Consider giving guided bike rides for a fixed cost if your location is very appealing to tourists.
You may also sell and repair bikes from the same location. After all, if you have the knowledge or staff to service your own repairs, it would need very little more work to give the same services to bike owners.
Make use of the fact that your clients are interested in the environment around your company. Consider selling gifts that promote your area or region at your business, such as postcards, t-shirts, mugs, bumper stickers, keychains, and other similar items.
Finally, you may be able to utilise your fleet for other purposes, such as restaurant takeaway delivery.
STEP 2: Establish a legal entity
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most frequent business structure forms.
If your bike rental company is sued, becoming a formal business organisation, such as an LLC or corporation, prevents you from being held personally accountable.
STEP 3: File your taxes
Before you can begin for business, you must register for a number of state and federal taxes.
To register for taxes, you will need to get an EIN. It’s really simple and completely free!
Taxes on Small Businesses
Depending on the business form you choose, you may have multiple choices for how your company is taxed. Some LLCs, for example, may benefit from being taxed as a S company (S corp).
These guides will teach you more about small company taxes:
Taxes on LLCs
LLC vs. sole proprietorship
Corporation vs. LLC
S Corp vs. LLC
How to Form a S Corporation
S Corporation vs. C Corporation
There may be state taxes that apply to your company. In our state sales tax guides, you may learn more about state sales taxes and franchise taxes.
STEP 4: Establish a company bank account and credit card
Personal asset protection requires the use of distinct business banking and credit accounts.
When you combine your personal and business accounts, your personal assets (your house, vehicle, and other possessions) are at danger if your company is sued. This is known as penetrating your company veil in business law.
Furthermore, understanding how to develop corporate credit may help you get credit cards and other financing in your company’s name (rather than your own), lower interest rates, larger lines of credit, and other benefits.
Establish a business bank account.
Opening a business bank account is not only required when asking for business financing, but it also:
Separates your personal assets from the assets of your firm, which is required for personal asset protection.
It simplifies bookkeeping and tax reporting.
Create a net 30 account.
Net 30 accounts are used to develop and grow company credit while also increasing cash flow. Businesses use a net 30 account to purchase items and refund the whole debt within a 30-day period.
Many net 30 credit suppliers submit information to the main business credit agencies (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how firms establish business credit in order to get approved for credit cards and other lines of credit.
Apply for a business credit card.
Obtaining a business credit card benefits you in the following ways:
Put all of your company’s costs in one location to separate personal and business spending.
Build your company’s credit history, which will be important for raising funds in the future.
STEP 5: Establish business accounting
Recording your numerous costs and sources of revenue is crucial to assessing your company’s financial status. Keeping precise and thorough accounting also makes yearly tax filing much easier.
STEP 6: Obtain all required permissions and licences
Failure to get appropriate permissions and licences may result in significant penalties or possibly the closure of your firm.
Requirements for State and Local Business Licensing
To run a bike rental store, certain state permissions and licences may be required. Visit the SBA’s reference to state licences and permits to learn more about licencing requirements in your state.
Furthermore, local licencing or regulatory restrictions may apply. For additional information on local licences and permissions, please visit:
Check with the clerk’s office in your town, city, or county.
Contact one of the local organisations mentioned in the US Small Business Associations database of local business resources for help.
Waiver of Liability
To reduce legal risk and promote transparency, it is best to give consumers with informed consent agreements. Here is more information about informed consent agreements.
Occupancy Certificate
A bike rental company operates from a storefront. A Certificate of Occupancy is often required for businesses that operate from a physical site (CO). A certificate of occupancy certifies that all building rules, zoning laws, and government requirements have been satisfied.
If you intend to rent a space:
In most cases, it is the landlord’s obligation to get a CO.
Before leasing, ensure that your landlord has or can receive a valid CO for a bike rental store.
A new CO is often required after a big remodelling. If your location will be refurbished before opening, incorporate wording in your leasing agreement saying that lease payments would not begin until a valid CO is given.
If you intend to buy or create a location:
It i your responsibility to secure a valid CO from a local government entity.
Examine all building regulations and zoning standards for the area of your company to guarantee that your bike rental shop will be in compliance and able to receive a CO.
STEP 7: Obtain commercial insurance.
Insurance, like licences and permits, is required for your company to operate safely and legally. In the case of a covered loss, business insurance protects your company’s financial well-being.
There are several sorts of insurance plans designed for various types of companies with varying risks. If you are unaware about the hazards that your company may encounter, start with General Liability Insurance. This is the most popular coverage required by small companies, so it’s a good place to start for yours.
Workers’ Compensation Insurance is another important insurance product that many companies need. If your company will have workers, your state may require you to purchase Workers’ Compensation insurance.
STEP 8: Establish your brand
Your company’s brand is what it stands for, as well as how the public perceives it. A strong brand will help your company stand out from the crowd.
How to Promote and Market a Bike Rental Company
Because many of your consumers will be young and Internet-savvy, and tourists frequently go online to research things to do in a place, you should have a website and a presence on social media. Regularly update your Twitter, Facebook, and Instagram profiles, and consider writing a blog with information about local attractions, restaurants, and historical facts.
Finally, print fliers and distribute them to local hotels, restaurants, coffee shops, and other areas where potential clients gather.
How to Keep Customers Returning
Yelp and TripAdvisor will be your greatest friends—or your worst enemies. You and your staff must offer great customer service that goes well beyond just accepting money and delivering bikes. To get fantastic evaluations, suggest places and act as an interesting host.
Stay active since your personnel, who may be minimal paid part-time seasonal workers, may not have the same attitude toward customer interactions as you do. Hire friendly individuals, train them, and supervise their customer interaction. In short, ensure that you and your team provide a memorable client experience.
STEP 9: Create your company’s website.
After you’ve defined your brand and designed your logo, the next step is to build a website for your company.
While developing a website is an important step, some may be concerned that it is out of their grasp due to a lack of website-building skills. While this was a fair concern in 2015, online technology has made significant advances in recent years, making the lives of small company owners considerably easier.
The following are the primary reasons why you should not put off developing your website:
Every genuine company has a website, period. When it comes to bringing your company online, it doesn’t matter what size or sector it is.
Social media accounts, such as Facebook pages or LinkedIn company profiles, are not a substitute for your own business website.
STEP 10: Install your company phone system.
Getting a phone for your company is one of the finest methods to keep your personal and professional lives distinct and private. That isn’t the only advantage; it also helps you automate your company, provides it legitimacy, and makes it simpler for prospective clients to identify and contact you.