How Do I Start A Bike Sharing Business?
Bike sharing essentially allows anyone to book for and pick a docked bike from a spot legitimately and the park at some other station through secure and advanced systems. With bike rentals becoming the next big thing after Uber, customers, often tourists, can get to ride bikes for a stipulated time-period. Bikes will typically be booked for a few hours and you will find this a huge hit amongst college students. Here are some steps to staring your bike sharing business:
- Business plan: To start with, you must have a plan in place to understand your business specifics and identify the unknowns. You need to investigate things like your target audience, startup expenses, ongoing costs, name of the business, rates to charge your customers, etc. You must invest in good-quality bikes; else, your business will lose credibility. You need to spend on associated gear like bike locks and helmets, on repairs, payments for staff, liability insurance, professional services like legal consultations and accountants’ salaries when you consider total startup costs. You can choose to offer your bikes on rent on a flat fee basis or hourly fee basis. Rental costs will depend on the season and location and your profits will depend on multiple factors, like how long the season lasts, whether the climate is mild, whether the business will run throughout the year, etc. You can even consider offering guided tours on bikes for flat fees and bike repair services when you or your staff is equipped to this yourself.
- Legal entity: The more popular types are partnership, sole ownership, LLC or Limited Liability Company, corporation, etc. This is the best way to protect yourself from being held accountable individually in case this business gets sued.
- Tax registration: You must register for multiple federal and state taxes prior to inaugurating your business. For this, you must apply for a free EIN via the IRS site through email or fax.
- Business bank account: Your next job is to create a credit card or business bank account to protect your personal assets. If your business gets sued for some reason, your personal assets will be a risk. Moreover, you must learn ways to increase your business credit so that you can easily get credit cards or other finances for your business. A business bank account also makes it easier to file for taxes while a business credit card can keep your business and personal expenses separate.
- Business accounting: This is a must to know how your business is performing; you should maintain detailed and accurate accounts for filing taxes every year.
- Get permits: You have to acquire he required licenses and permits without which you may have to pay huge fines; your business could also be forced to shut down. You may need state licenses to start shop in some places; it is recommended that you inquire about your state’s licensing requirements in advance.
- Get insurance: Your bike sharing business must have insurance coverage to run safely. This will also protect it in cases of financial losses. When you are unsure about which insurance scheme to opt for, stick to General Liability Insurance.
- Brand image: You must have a strong brand image and striking logo to give it an edge over its competitors.
- Site presence: Finally, you must have a strong presence on social media like Twitter and Instagram to attract the tourists and tech-savvy customers. By creating a website you can inform your customers about your business and services you offer.