Starting a Bicycle Shop

Summary: Wanting to start a bicycle shop and looking for a guide to help you put up one? Our guide can help answer your basic questions about starting this business. It discusses important items like startup costs, earning potentials, pricing, equipment needs, the best advertising method and other useful tips.

The key to a successful bike shop is having everything that a customer needs, including bicycle parts and accessories like helmets, clothing and tools.

The idea is to have a complete – but not necessarily large – inventory. Inventory could cost a lot and so it is wiser to have a complete stock without having them too many.

Startup Cost for a Bicycle Shop

The typical startup cost for a bike shop is $20,000-$90,000 if you are renting a 1,000 sq. ft. of floor space. Additional space would mean additional cost, of course. You would need that amount to pay a deposit to the lessee, gas and electric company; buy office furnishing like display racks and counter (maybe a cash register and alarm); and buy new bikes and your inventory of initial parts and accessories. You must also prepare for occasions general repairs of broken windows, and pay window cleaning.

Dealer prices for bikes start at around $50 and averages $453. Markups could be up to about 30%. According to the National Bicycle Dealers Association, the average bike dealers profit is about $25,000 of $500,000 in annual sales. The averaged realized profit margin on bicycles is around 36%, which is just break even, according to NBDA.

Advertising for a Bicycle Shop

The recommended advertising for a bike shop is the small one, occasional classified ad or small yellow ad but not large expensive displays. The classified ad should be specific, meaning it will show items or services that you are offering and their prices. You might also distribute fliers and set up posters and inexpensive signage. Giveaways like pens, flashlights, business cards and imprinted receipts are also materials in which you can advertise your business. A very visible display would also help in enticing people to visit your shop. But most importantly, you should build your clientele through referrals of your good service, the completeness of your merchandise and your strategic location.

Other Tips for a Bicycle Shop Owner

It would help if you have an experience in the bike business, but not necessary; as a general proposition you should be interested into bikes or bike business to be able to bring it through seasons like winter and summer when people are not inclined to buy and ride bikes. Also, it is important for you to realize that this business involves a durable item that needs replacement rarely. That is why it is important for you to keep your business busy by making sales of bike accessories a large part of your business.