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Bicycle Rental Business

Old 05-13-15, 04:06 PM
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jtwetzel
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Bicycle Rental Business

Hello,

First of all, I am new to this site so pardon me if I post in the wrong place! I was wondering if any of you have any experience in running a bike rental business. I am researching this topic because it seems like something that would interest me. I have a degree in Recreation Administration and have rented bikes before and rode them on the beach and that was a cool experience. I have family that lives in Hilton Head Island, SC and think that is a great place for rentals. There are a number of companies already in that area.

What are some of the high points to look into when considering starting a business. Assume that I know nothing about running a rental business. (I do know some about bikes). How many bikes would I feasibly want/need to start out? What other equipment would I need? (obviously spare tires, chains, pumps etc).

Basically I know that a tourist area is prime for bicycle rentals and a highly trafficked area is best. Would it be wise to combine a bicycle rental business with another type of business like a restaurant/smoothie shop etc..

Any help or advice is greatly appreciated! Thanks everyone!
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Old 05-13-15, 04:20 PM
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fietsbob 
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Insurance.. Ive seen some bare bones rentals in Ireland, but in the US you can't swing a cat and not hit a Contingency Fee Lawyer ..

LBS Has Coaster Brake cruisers to Rent , so do a few Hotels Here .. maybe a Hotel tie in will get you the Liability coverage..
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Old 05-14-15, 04:51 AM
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Do some research on building a business case. You will need to know what market there is, how much money that market is prepared to pay and what it demands, the seasonality, what competition you face, the premises you are going to use and how much to pay for it along with the outgoings such as electricity, your expertise in bicycle mechanics, your ability to get along with people (some of whom can be extremely demanding, while others will be determined to get a refund for no reason at all), how much liability insurance will cost, and what sort of living you expect to make from the margin and/or profit.

Importantly, what sort of capital do you have to put into the business? Do you have enough to live on for at least a year, and probably two (that's irrespective of whether you run a hire business alone or in conjunction with another new business)?

What standard of bike do you intend to offer? How many sizes do you intend to make available in each type of bike? What about helmets, consumables such as tubes, tyres, chains, cables?

What are your bail-out options (picking up a hirer and/or bike that aren't going to make it back)?

And finally, what sort of advertising and marketing budget and strategies do you have in mind; what are you going to do to differentiate yourself from other operators in the area (remember you are also competing against every other tourism business for the discretionary dollar that visitors spend)?

My very small hire business was run in conjunction with guided tours of the historic precincts of my city. I was under-capitalised, and although I operated at the front of a cafe, just about all my business was generated from advertising and promotion.

Frankly, unless you have a captive audience, such as on an island that doesn't allow motor vehicles, I am not sure you can making a living out of bike hire alone. It would be a handy adjunct to an LBS, maybe a cafe, but I have doubts about a restaurant.

I go back to the start of this post... research, research, research, then make a decision.
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Old 05-14-15, 05:09 AM
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You'll need to produce a business plan as the result of your research. Find your local community college and look among basic business courses, and take the one that focuses on entrepreneurship and business planning.


That was a good list from Rowan (above). You will need to add staffing (manning: seasonal, monthly, weekly, daily) and determine what you can pay employees. Other employee costs and liabilities are next. Then, you'll need advice on the contract/disclaimer language on rental agreements, supplier agreements, credit agreements, leases, partnerships (if you become an adjunct to a cafe or hotel owned by another) and the like. These areas are part of your business planning.

The other area is business accounting - who will keep the books? Are you a QuickBooks do-it-yourself type, or would you hire the services through a local accounting firm. Church friend or volunteer? In addition to overall capitalization, look at pre-business/startup/operations cash flows and model your first two years of operations. When will you need injections of funds? When will you be generating revenues sufficient to begin repaying debt. What is your exit strategy? You must consider these things, too.

Good luck.
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Old 05-14-15, 09:15 AM
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As a stand-alone business, it's unlikely you'd make any money.

Bikes cost money; and rental bikes get abused and require more maintenance; Insurance would probably be your main expense. Add to that the expense of having a good location, and all the other expenses of running a small business, and I don't see how you'd make any money waiting for the occasional person to come by and rent a bike when the weather is nice for a few dollars an hour or day.

Juist to amortize the start-up costs would be a huge hurdle.

If you already had a thriving business, and could just add the bike rentals as an aside, that would be different.
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Old 05-14-15, 09:27 AM
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Hilton Head is great - with all of the separated bike/walking trails. I have only been there once, and we rented bikes from our hotel - so keep that in mind. That particular market might be quite saturated. If you go through with it, check out Sun Crusher bikes. Looks like that model was replaced by the Baja Cruz...anyway, big fat tire cruisers. I heard there was someone up in Charleston that buys a bunch at wholesale every year, rents them out for the summer and then sells them all after the tourist season. So maybe think about doing something similar. The thing with Hilton Head is any business space you buy or rent is going to be incredibly expensive. Something you could think about doing is leading bicycle tours around the island and have bikes for rent for that purpose.
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Old 05-14-15, 01:36 PM
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Your profit margin will be heavily dictated by demand and maintenance fees. You mentioned tourism. Do you think that's really where your demand is? Wouldn't all tourist spots be over saturated with Bicycle Rental places?

Be aware of the generation we live in too. You're going to have to be pretty savvy to compete with startup companies and businesses that are going after different business models.

https://www.spinlister.com/

https://www.citibikenyc.com/
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Old 05-14-15, 06:30 PM
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Originally Posted by JVinci View Post
You mentioned tourism. Do you think that's really where your demand is? Wouldn't all tourist spots be over saturated with Bicycle Rental places?
It depends on the area.

For example, in the area where Rowan and I used to live, a new rail trail was built with the idea of attracting cycletourists, day riders, etc. etc.

The trail is used, although not heavily, and most people on it appear to have their own bicycles.

However, about 6 months ago, we visited the area and were not able to bring our bicycles with us. So I made enquiries about bicycle rental. I figured since the trail had been completed a few months before we left, and since the area had a good year-and-a-bit to start cashing in on whatever potential the trail had, that there should be more than one bicycle rental company, and that we should be able to rent a couple bicycles on a normal, everyday, non-holiday weekend. I figured wrong.

There is one bicycle rental company who services the entire 134 km trail and they do not have a large selection of bicycles. As it happened, on that normal, everyday, non-holiday weekend all 6 or 8 or 10 (or whatever they've got) bicycles were rented.

In addition, this one bicycle rental company rents from one location on the trail. It's a logical enough location if you're going to service a 134 km trail, but there are at least 3 other towns where it would make sense to have at least a few bicycles available for rent.

We lived in one of those towns and when we did, I wandered into the Tourist Info Centre now and then. Just about every time I was in there, someone was enquiring about renting a bicycle with the idea that they might ride around town, and also up the rail trail a little way. But of course, nothing was available in town, and they were directed to this other location about 20 km away.

All that to say ... part of researching and building the business case would be to investigate possibilities like that and determine whether or not the market is saturated. If a person could get in early on a new tourist development (like this rail trail), there might be a chance to make a go of it.
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Old 05-14-15, 08:43 PM
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jtwetzel
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Thank you everyone for your responses! You have all made solid points. Definitely a lot of research would need to go into the area as well as running a business. If I was to every go through with it I would most likely pair the bike rental with something else to help with the offseason struggle. (Not sure what would really pair well with a bike rental shop in the winter lol). Maybe something like what bmthom.gis suggested like a bicycle tour of some popular areas around the beach. I would mostly be interested in Hilton Head but they may be way too populated with businesses for it to even make sense. I plan to visit one of the owners that I have made contact with and spend the day with them to see how the business works.

Once again, thank you everyone for your input and if there is anything else you could share or feel that I may need/want to know then please share!
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Old 05-14-15, 09:01 PM
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I had an idea, that I will never act upon lol Instead of renting, you sell vintage bikes like a Schwinn Breeze to vacationers and you tell them at the end of their vacation if they like ,you will buy it back , of course for much less money. I think it might reduce your liability some.
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Old 05-14-15, 09:11 PM
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Another thing to consider: How many average tourists (i.e. not hard-core cyclists) will want to ride a bike in South Caroliney's heat and high humidity in the warm weather? You have the heat and humidity in the summer; and less tourists in the winter. Sounds like it's always "off season" for bike rentals in such a place.
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Old 06-12-19, 06:21 AM
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What to do?

Greetings I think that first of all you need to focus on whether there will be success, whether bicycles are in demand in this area.
We have collected complete information on this area. It turned out that tourists are very fond of bicycles, and we immediately bought a few bikes to open a business.
Also calculate what your profit may be. I think this is the main direction in which you should work.
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Old 06-12-19, 06:30 AM
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Business plan... That is a necessity before anything else.
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Old 06-12-19, 06:32 AM
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Bicycle Rental Business
Originally Posted by JosephMorrow View Post
What to do

Greetings I think that first of all you need to focus on whether there will be success, whether bicycles are in demand in this area.

We have collected complete information on this area. It turned out that tourists are very fond of bicycles, and we immediately bought a few bikes to open a business.

Also calculate what your profit may be. I think this is the main direction in which you should work.
Zombie thread from 2015. Even the OP hasn't been here since then.

How did a Newbie come upon this? Are you from the same area, but it was unclear from the OP where that was.

Some correspondents suggested South Carolina.

Last edited by Jim from Boston; 06-12-19 at 06:36 AM.
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Old 06-12-19, 06:32 AM
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We have a beach house in a resort area that has grown tenfold in the last 20 years. Used to be one place that rented bikes. Now there are at least half a dozen, all with fairly substantial fleets. I suspect Hilton Head is similar. You're likely looking at a significant investment to compete in a crowded market.
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Old 06-12-19, 08:42 AM
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I imagine there are some business metrics you can find on the necessary ratio of revenue to price of equipment for a successful rental business. Whether it is bikes, tools, cars, etc. Iíve rented a nice road bike twice, it cost $65/day, which is probably ok relative to the bikeís appropriate $3k price, but only if itís rented a sufficient number of days per year. And thatís the rub on bikes. Youíd probably run out of bikes to rent on certain weekends and peak season, but the other 300 days per year the bikes sit not rented just costing money. By comparison the car rental on the same trip was about $31/day even though the car I rented probably cost at least 12x what the bike cost. But cars are probably rented out 85% of the time, bikes, maybe 15%?

On my last rental, I was able to call the shop at the last minute and change my reservation from Sunday to Saturday due to the weather forecast. So the bike was not otherwise reserved for that Saturday. So they likely rented it just the one day that week.
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Old 06-12-19, 09:01 AM
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A lot of good practical advice here but I'd say the first thing you have to ask yourself is "Do you like people?"

Bike rental is a retail business and a lot depends on how you interact with people and how they perceive you. Some people will be friendly and others will be jerks. You have to deal with all of them.

I say this because I see so many people working with the public that obviously don't care about their customer's satisfaction. If you don't genuinely like helping people in whatever business you're involved in, you're not going to enjoy it, and likely it won't be something that will last very long. Considering the up front investment involved, I would give a lot of thought to this.
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Old 06-12-19, 02:22 PM
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The first question OP has to answer is "Are you still thinking about this after 4 years of not posting a thing?"
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