If you’re looking to start your own business, a bike rental shop might be the right venture for you. It doesn’t take much to run, nor does it require a lot of overhead costs to start.

However, keep in mind that much of your income will be dependent on fluctuating factors. Tourism, the weather, and things like the COVID-19 pandemic can drastically affect business. But if you’re prepared to plan for unpredictability, you’ll be able to weather those dips.

Part of the appeal of this kind of business is its versatility — you can choose to have a brick-and-mortar shop or run it entirely online. If it makes sense to do so, you could even partner with a larger bike sales, hospitality, or hotel operation.

How you choose to run your business will depend on your situation. Your customer base will consist of a variety of people, including tourists looking to explore, students looking to get around campus, commuters looking for a better way to get to work, and more.

Wondering how to start a bike rental business? Don’t worry. We’ll cover what you need to do from start to finish.

‌How to Start a Bike Rental Business 

 Like most ventures, your bike rental business requires a few beginning steps, from planning to execution. We’ll show you seven steps to get your bike rental business off the ground.

1. Make a plan‌

Before you do anything else, you’ll need a road map for your business. Meticulous planning at the beginning will avoid trouble down the line and put you in a better position for long-term success.

When creating your business plan, look at:

  • How much it will cost to start and maintain your business
  • Who your target market will be
  • What your rate structure will be
  • How you’ll brand your business (name, logo, voice, etc.)

Startup costs will vary depending on the size of your business. For most people, it makes sense to start with a small fleet of bikes and work your way up as you bring in more revenue. You’ll also need to consider costs like repairs, renting office space, paying staff, and protective gear for riders.

The type of gear you need to purchase will also vary depending on the location and intended use of your equipment. Are you renting out city cruisers or mountain bikes? Are your customers commuters, students, or weekend adventurers?

You’ll also need to pay for certain professional fees like a lawyer, for example, to help with legal paperwork such as rental waivers, rental contracts, and employment contracts.

If you hire a graphic designer, web designer, or photographer to help with your branding and website, they’ll also need to be paid. This might seem expensive, but it’s worth it to have a good, professional-looking product.

Figure out how you want to make money 

Are you going to charge a per-hour fee? A flat fee? Both? Look into each and decide what makes sense for your business model. Also, look into other related revenue streams like selling merchandise.

Look at the competition

Check out other companies that are doing well and see if you can figure out why. Where are they located? What do they offer? What does their online storefront and/or mobile app look like?

2. Form a legal entity and register for taxes‌

It’s not the most thrilling part of launching your business, but covering your legal bases is critical to any venture. You can start by registering your business as a legal entity. You’ll choose one of four business structures:

  • Sole proprietorship
  • Partnership
  • Limited liability corporation (LLC)
  • Corporation

Each will have its pros and cons. Forming an LLC or corporation, for example, provides some degree of protection should someone sue your bike rental company. Make sure you know what fees you’ll have to pay for the business structure you choose. For example, it costs about $100 to file the paperwork for an LLC in most states.

Once you’ve set up a business structure, you’ll need to register for federal and state taxes to open for business. To do that in the U.S., you’ll need to apply for an employer identification number (EIN) from the IRS.

Depending on which you choose — LLC, corporation, sole proprietorship, etc. — you’ll be subject to different taxes. Do your research to see which tax benefits you can get for the business structure you choose and bear in mind the amount you’ll need to pay.

3. Set up your business finances‌

Keeping your business finances separate from your personal will make everything a lot easier when it comes to accounting and paying your taxes. You can do that by setting up a separate business bank account and credit card.

Separating your business finances from your personal:

  • Protects your personal assets
  • Makes doing your taxes easier
  • Makes accounting tasks like payroll easier

Getting a business credit card and keeping it in good standing will also build your company’s credit, which will come in handy later on if/when you’re looking for loans or investments.

Once that’s done, you’ll want to set up an accounting process or hire a bookkeeper. It’s beneficial to start this in the beginning as accurately tracking your finances saves a lot of time and effort later.

4. Fill out the proper paperwork to become legit‌

Once you’ve got your plan drawn out and a bank account opened, you’ll need to acquire the necessary paperwork to operate your business legally. Look into state and local requirements to see what you need to do to get a business license in your state, and go from there.

This will probably mean collecting sales tax on your services. Your town, city, or county clerk’s office will have more information on what’s required in your area. The Small Business Association (SBA) also has an online resource you can use to find more information about requirements near you.

Because the bike rental industry carries a fair bit of risk, you’ll also need to take out business and liability insurance. General liability insurance is a good place to start, as it provides the broadest coverage. Your state may also require you to carry worker’s compensation insurance to cover any employees you have.

It’s also recommended that customers sign an informed consent waiver absolving your business of liability. Some business owners also post signage saying that customers assume any risk for using their services.

If you have a brick-and-mortar location, you’ll need a certificate of occupancy (CO). By getting one, you claim that your business abides by all building codes, zoning laws, and government regulations in your state. It’s generally the landlord’s responsibility to get a CO, but that responsibility will be yours if you’re building or buying your storefront.

5. Craft your brand‌

Your brand will be a primary factor in attracting customers. It encompasses their entire experience with your business — what they see, whether your beliefs as a company align with theirs, and whether they identify with your brand voice. So, it’s worth taking the time to intentionally craft it before you launch.

Consider what people will think or feel when they see your storefront or website. Visual elements like logo and color design as well as your messaging will leave an impression on your customers.

Think about what value(s) you want to build your business around. Do you want your business to stand for adventure and independence? Fun and excitement? How do you communicate that to people in a way that grabs their interest?

Municipalities like the city of Houston brand their bike-share/rental program as clean, orderly, and very professional.

Houston’s BCycle program, for example, is a city-run bike-share program marketed to Houston commuters. Their branding skews professional, their photos are high-quality, and the messaging is straight to the point. People can walk up to any “B Station” in Houston proper and pay to rent a bike or get a monthly membership.

6. Build your website‌

Thankfully, creating a business website is easier to do than ever. Template-based site builders are prevalent, easy-to-use, and produce beautiful results without coding knowledge.

Your website will be the first thing most people see when they encounter your business. It also gives your business added credibility.

You may be thinking, “Can’t I just use a Facebook business page?” Avoid doing this, because while it may be convenient, you don’t own your business profile on social media sites like Facebook or LinkedIn. The companies do.

Choose a website designer that fits your budget and get set up. Constant Contact’s Website Builder lets you get a site up and running in just a few hours. Simple templates let you build a website that looks professional without knowing how to code. Plus, analytics features let you optimize your site’s search ranking to get your business in front of new customers.

7. Promote your business‌

Finally, it’s time to market your business. Scope out the competition and see if they have any social strategies you can use. Create and maintain a presence on social media, actively engage with users, and be sure to share valuable content consistently.

Fill out your online business profile on Google My Business, YellowPages, Bing, and anywhere else you can. This will help you show up in local “near me” searches. Once you start getting customers, encourage them to leave positive reviews if they had a good time. It’ll boost your company’s image and search rank.

You can even go old-school and print out some flyers to post in local coffee shops, parks, and other areas your customers are likely to hang out. Get to know the area very well, since your customers will likely be out-of-towners looking to explore. Suggesting great destinations will improve the customer’s experience and make them more likely to recommend you.

Time to get started

With these steps on how to start a bike rental business, you should be off to a great beginning. As your business grows and you see more customers come and go, you’ll develop a knack for the daily interactions and regular tasks you’ll need to undertake to stay running for the long haul.

Want more tips for marketing your tourism business? Explore the Constant Contact blog for more information on running and marketing a business, and take a deeper dive with our free marketing guide, The Download.