How to Start a Bike Rental Business
Are you thinking of a suitable business to invest in, without having to attain some school certification or obtain professional qualification? Then maybe you should consider starting a bike rental business. This is a lucrative business if you can find where there is a need for the services. You can be making considerable daily income from this business if you have a good business plan.
The bike rental idea is not new, for you may be familiar with car rental only like many other people. One reason you and those people may not be familiar with this business idea is that maybe the services are not needed in your area, so there is no need for people setting up the business in your locality.
However, there is much to know about the business before you think of investing in it. To ensure you get a deep understanding of the industry, we are going to analyze, and state all you need to know about a bike rental business.
Who Needs the Service?
Before you set out to start the business, you should be asking yourself specific questions like who needs the bikes and where will be the best location for the company.
In starting your business, after considering the capital for the company, you should then determine who will need to rent a bike. You need to set up a shop in a location where the use of a bike is required. Below are some of the areas you should consider:
- Tourist dominated areas: Tourist dominated areas are one of the best locations for this business idea. It is the perfect way for tourists to move about and take the time to enjoy their environment. Driving around with a bike will enable the tourist to go into remote areas where cars and other big vehicles cannot pass through.
Tourists will want to take advantage of the joy ride the bike has to offer as you capture every lovely scene while riding. Tourists are one of the tops patronizes of this business. Thus, you should take into account the presence of tourists in any location to open the store.
- Target student populated areas: If you are worried about where to find patronage with such a business idea, then you should consider students dominated areas. The bike business will be suitable in such a city, where students can easily rent bikes to move around campus.
- Target vacationers: Another profitable target for this business will be in location for holiday resorts. You will find vacationers in these holiday regions, who will love to have fun riding all over the town. In these regions, you will find family members, especially children, who usually love ringing on bikes.
Now that we have identified the suitable target areas for this business plan, you would have seen profit potential of the business. Determining the profit potential is one of the parameters that will instigate an investor to start a business. And we are sure your business mind must have alerted you of the possibility of making money in the bike renting company while addressing who will need this service.
Cost of Starting the Bike Rental Business
Now, we are going to analyze the cost of starting the business. You must take into consideration the capital and recurring expenses of the company. You can start the business with as much as $7000 or less at a modest project.
We are going to analyze some of the items you will need in starting the business. And in each case, the cost will depend on the scale of the bike rental business you want to establish.
- The Fleet of Bike
The first thing you have to consider is the number of bikes you will have to purchase. You may decide to run the business with 20 bikes, and with each bike cost being $200, which will be a total of $4000 spent on buying the bikes. The amount of money spent on bikes may differ based on the scale of the business. A bigger bike rental business may require you to buy more bikes, which will cost more.
- Budget for repairs and bike parts
You cannot ignore the aspect of repairs and availability of bike parts in your shop. Since the bikes will be working most of the time, they will inevitably wear out, and you should consider the cost of repair and replacement of bike parts from the start of the business.
The cost of the repair and purchase of the bike part cannot be specified. It will be best to place a budget for this aspect to make money available to repair the bikes and ensure the business runs smoothly. Also, it will be in your best interest to be in a good business relationship with bike mechanics and suppliers of bike parts to ensure the smooth operation of the business.
- Employment of staffs
Another aspect to consider in the business is the employment of staff. The payment of salaries is a recurring expense, and it will depend on the scale of business. Running a small scale bike rental business may require you spending $0 to about $500 per month depending on the number of workers you have in the shop.
For a small scale business, where you are the only one running the shop, you are going to spend nothing on salaries as usual. But you must include this in your budget for starting the bike rental business as a recurring expense.
Read Also: Implications of Hiring a Staff in Small Business
- Renting
You might have to pay rent for storage room for your bikes and where you will attend to customers. In some instances, you can reduce the cost of paying rent for an office, if you can find a free place to attend to customers like in a hotel or partnership with another establishment.
For rent payment, you should consider paying as little rent as possible for storing your bikes, and office places. In any of the situations, you may find yourself, and you should make a plan for this in starting your bike rental business.
- Payment for liability insurance
In the bike rental business, you should take insurance which will be useful in cases of accidents. You should provide waivers for your customers to sign to relieve you in cases of accidents. But you should also take in liability insurance to reduce the risk of exposure of your business in such instances.
You should contact your insurance company for this package as you are registering your business. Check out the plans they have and choose an affordable one that will suit your business plan.
- Get a license to operate.
To make your bike rental business legitimate, and to ensure that you do not get on the wrong side of the law, get a license to operate. Go to the local government office in your area to get all the required documentation and registration process you will need.
- Register your business name
One essential aspect of the business is the branding of your bike rental business. Register the name of the company to kick start your business.
- Find a location and register your CO.
The location of your business is vital for a bike rental business, and as discussed earlier, they should be located close to places with high potential customers. You should ensure to get a Certificate of Occupancy to operate your business in the location you lease with the approval of the owner of the site.
You can see that the cost of starting the bike rental business may vary, depending on the scale and demand of the company.
How to Make Money from Bike Rental Business
The most obvious way of making money from a bike rental business is to rent out the bikes. You can charge at a different rate per hour, but it is advisable to analyze the market in your area before setting up a price rate. Knowing the rate of other rental businesses per hour will enable you to adjust your rate accordingly.
Setting your price too high above the average rate in the region can discourage customers from using your services. As a start-up, you may consider reducing your cost from the average to attract customers and build your customer base.
Another way you can consider to make money from this business plan is through sales of bikes and bike parts. Being in the business of renting bikes, you may also consider selling bikes to customers. Doing this will fetch more revenue to the company.
You should also consider selling bike parts as another way of increasing revenues. In this aspect of the business, you are considering those that already own bikes and may need to replace bike parts. It will not cost much to include this part in the business plan.
If you know bikes and how to repair bikes, you can as well carry out repairs of bikes. This service will be open to people around the region and serves customers that own bikes in the area. It will be a suitable source of revenue and increase the potentials of sales of your business since you will have bike parts to sell to customers. Also, customers might be willing to rent a bike while theirs is in repair. As you can see, the services are complementary to one another and will serve a similar purpose to your bike rental business.
Also, if you have enough space in your shop, you may take advantage of the tourists available in your area and add souvenirs to your shop. Since you have a business that drives customers to your shop, you should add other items that they may be interested in increasing revenue.
With a fleet of bikes already at your disposal, you may also consider using your bikes for errands. Running delivery services for business such as restaurants, parcel delivery, and other services will be an additional source of revenue for your business plan.
How to Promote Your Bike Rental Business
In starting a bike rental business, your business plan should include appropriate ways of promoting the business to targeted customers. The services of the bike rental business should be appropriately directed to those that need the services to ensure a profitable business venture.
In our research about the business, we have sorted out the likely targeted audience, and now we are going to plan ways of reaching out to these customers. A detailed plan on the promotion of your rental business is essential since you will be pitching against already established and upcoming bike rental businesses in and around the area.
Here, we are going to establish ways to be smarter than the competitors and reach out to more clients.
- Direct campaigns through flyers
You more want to print out flyers, designed with your company name, logo, address and details on them, and place the flyers in strategic places. Deliver these flyers in areas where you will find students, tourists, children, and other places of interest. You can also share them in hotels, airports, schools, playground and public places full of your targeted audiences
In the handbills and posters, you should include your rates, attractive discounts, and all the mouth-watering offers you have to offer. Make it as appealing as possible to capture interested people.
- Build a website for your bike rental business
People can sit in the comfort of their home to shop online and find any service they desire. There is an increasing number of people using the internet to source for services. And you will be missing out on a considerable amount of clients if your bike rental business is not online.
With your online presence, people can easily search in your locality and book for your services. They would have already made contacts and booked your services before they come to your shop.
In some cases, you may have to deliver the bike to the customer, without them coming to your shop. Customers will prefer such ease of services, where they can book for your services quickly. By building a website for your business online, you are promoting the company to those set of people who use the internet to search for services.
You should consider building a website for your business. This should be in the budget of starting the company, to compete with others in the industry. It’s not that expensive to start up an online platform for your business. You can contact a web developer who will show you several options. Choose a plan that will fall within the range of your budget. And in creating your website, you should use an appropriate name for the site.
With consideration to your brand name, you should consider the use of Search Engine Optimization techniques to boost your awareness online. Using these techniques will ensure that when potential clients search for keywords related to your business, your web page will appear on the front page, which increases your chances of reaching out to potential clients. A knowledgeable web developer will help you out with the design of a suitable website for your bike rental business.
Read Also: 8 Reasons Why Small Business Need a Website for Your Business
- Create social media platforms
One of the best ways to promote your bike business is through social media platforms. We have millions of active users on these platforms daily, and you have the potential of reaching out to more people on using appropriate techniques.
You do not have to spend much in building your presence on these platforms if you are on a budget. The registration is free, and you can quickly learn how to use these platforms. And it is easier and faster for your customers to connect to you on these social media platforms. It is best to place your social media handles on your fliers, website, poster and every publication so you can provide potential customers access to reach your business.
In creating your presence on these social media platforms, ensure to use your brand name, which will make it easier for potential customers to find you online.
- Word of mouth
One of the oldest forms of promoting your business is through word of mouth. When you offer quality services, people will always recommend your company to others. To create much buzz about your bike rental business, especially at its infant stage, you need to think of an idea that will generate lots of buzz in the community. Think of how you will make your service unique that customers, vendors, transporters, hotel agents, students and others will recommend your service to others.
When you provide customers with additional services such as discounts, free rides, and other additional services, they will promote your services to others. Another method to use is to provide incentives for people that recommend customers to your business. You will find that people will go the extra mile to ensure that customers come to your shop. You can consider a reduced rate for those who book for bike rides on time using your websites, social media channel or through telephone booking. This will encourage the use of your websites and online platforms to promote your business.
Build a Team for Your Bike Rental Business
In starting the business, you may be the sole operator of your shop, but you will still need help from other people. However, if you want to set up a large scale business, you will need a team who will help you with the process of running the business. To set up a complete unit for your rental company, you will need the following set of people either as an employee or on retainer:
- A mechanic: The mechanic is an essential member of the team, for you will need one from time to time to maintain the bikes and keep them in good condition. Because the bikes are often in use, they may break down or need repair from time to time, and you cannot afford to leave bikes in bad states when you need to for business. Thus, when you have a mechanic on retainer, your bikes will be taken care of faster and put back into the work.
Also, it is crucial for the safety of your customers and your business that the bikes are safe to use. To protect your business and increase patronage, you have to reduce the accident rate, and you can achieve this with adequate maintenance carried on the bike by a reputable mechanic. Hence, it pays to have one on your payroll as an employee or retainer.
- A marketing team: Your business will need a marketing team to help promote the company, and since the marketing is continuous, it will be best to keep a group or marketing personnel. It will be best to have someone with technical online marketing skills in your team or the head of the team. For this department, you may have one person who can handle the online as well as the offline marketing process.
- A receptionist: It is essential to have someone on standby who will handle the business on the counter. The person will take care of the booking for customers. For a one-person shop, you can manage the reservation, but you must always have some available when customers come calling, like a receptionist. The function of the receptionist might vary depending on the scale of the business. For a small bike rental business, the receptionist might perform more tasks than a large scale business where there might be a secretary to handle other functions of the company.
Read also: How to start Car Rental Business
In conclusion, it is a suitable business for anyone, and you can start with any budget and scale your bike rental business to meet your capital. You do not require much knowledge about bikes to start this business, but as time goes and you pay much attention to the company, you will get to know more about bikes. Follow the guidelines provided with a good business plan, and you will be set to make it in the bike rental business. One crucial aspect to keep in mind in running this business is the bikes, and you have to take care of the bikes and ensure they are always in the right conditions, neat and safe for your customers.