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Bike Rental Business Plan
Bike rental businesses cater to individuals seeking bikes, such as tourists, commuters, students, and leisure riders. These enterprises can operate in various locations, but they are particularly popular in urban hubs, tourist hotspots, university campuses, and residential districts. The bike rental industry is an emerging sector attracting entrepreneurs who aim to meet the increasing demand for affordable and convenient transportation alternatives. A Bike Rental Business Plan is a pivotal component for such entrepreneurs.
Within this article, we will elaborate on the significance of a bike rental business plan, its necessity, and the process of crafting one. Furthermore, we will furnish you with a sample business plan template for bike rental that can serve as an inspiration for your own endeavor.
What is a Bike Rental Business Plan?
A bike rental business plan is a document that describes the goals, objectives, strategies, and projections for starting and operating a successful bike rental business. It provides entrepreneurs and investors with crucial information about your business, such as:
- The type of bike rental service you will offer
- The location of your bike rental business
- Your target customer segment
- Your rental rates
- Your marketing strategies
- Your organizational structure
- Your management team
- Your financial projections
- Your operational milestones
Crafting an extensively researched and meticulously detailed business plan is of paramount importance to steer your bike rental business towards success. This endeavor will facilitate the attraction of lenders, investors, and partners who can contribute to the growth of your enterprise while maintaining discretion.
Why Do We Need a Bike Rental Business Plan Sample?
Writing a business plan can be challenging, especially if you’re preparing it for the first time. It requires detailed research and consideration of many factors. A bike rental business plan sample can give you a better idea of what to include in your own plan.
A sample bike rental business plan can help you:
- Learn from the best practices of successful bike rental businesses.
- Avoid common mistakes in writing a business plan.
- Customize the sample plan to fit your specific needs.
If you’re seriously planning to start your own bike rental business, our team of experts at OGSCapital can help you. (Check our Car Rental Business Plan ) In the following sections, we share our sample bike rental business plan that you can use as a reference. This sample will help you save you time, effort, money and help you make informed decisions about your own business, and ensure that you are on the right track to success.
The executive summary of a business plan provides an overview of a bike rental business. It includes information about the services offered, the target market, the management team, the financials, and the key success factors. The summary also highlights the main objectives and goals of the business.
Here is the executive summary of a bike rental business called “Velocity Bikes”.
Velocity Bikes is a bike rental business that offers high-quality bikes for rent to customers in California. Velocity Bikes offers different types of bikes such as city bikes, premium bikes, electric bikes, and mountain bikes, as well as bike accessories like helmets, locks, baskets, lights, and maps. Velocity Bikes operates from a strategic location near Disneyland Park, one of the most popular tourist attractions in California where customers can easily access the bikes and enjoy the scenic routes and attractions.
Velocity Bikes will offer the following services to its customers:
- Bike Rental – Rent bikes for hourly, daily, weekly, or monthly periods. Velocity Bikes offer a variety of bikes, including city bikes, mountain bikes, electric bikes, premium bikes, and vintage bikes.
- Bike Maintenance and Repair – During your rental period, Velocity Bikes offer a nominal fee for bike maintenance service, which includes checking the brakes, tires, gears, chain, and lights. They will also provide roadside assistance in case of any breakdown or accident.
- Bike Tours – Take guided bike tours of California’s best sights and attractions with experienced and friendly guides who provide information and tips on local culture and history.
- Online Booking and Delivery – Book bikes online through Velocity Bikes’ website or mobile app. Choose to have the bikes delivered to your hotel or preferred location, or pick them up from the shop.
- Accessories and Gear – Optional accessories and gear are available for rent, such as helmets, gloves, jackets, panniers, locks, maps, and guides. A small fee is charged per accessory or gear per hour.
Velocity Bikes serves customers who want to explore California affordably and eco-friendly. Velocity Bikes targets the following customer segments:
- Tourists – Visitors who come to California for leisure or vacation are one of Velocity Bikes’ main customer segments.
- Commuters – Local residents who use bikes to get to work, school, or other places are another customer segment.
- Students – Young people who study at colleges or universities in California and need bikes for academic or recreational activities are also a target customer.
- Recreational riders – People who ride bikes for fitness or enjoyment purposes and need bikes that are suitable for different terrains and challenges are another target customer.
Velocity Bikes is owned and managed by Bailey Howell, who has 15 years of experience in the bike rental industry. Bailey is responsible for the overall strategy, operations, marketing, and finance of the business. He is supported by a team of 30 staff members who perform the following roles:
- Bike rental manager – Responsible for managing the bike rental operations, including booking, delivery, maintenance, and inventory.
- Bike tour guide – Responsible for leading the bike tours, providing information and tips to customers, and ensuring their safety and satisfaction.
- Bike mechanic – Responsible for repairing and servicing the bikes, as well as ensuring their quality and performance.
- Bike attendant – Responsible for assisting customers with their bike rental needs, such as choosing the right bike, fitting the accessories, and providing instructions and directions.
Velocity Bikes aims to achieve the following success factors in its bike rental business:
- Customer satisfaction – To provide high-quality bikes and services that meet or exceed the expectations of its customers.
- Competitive pricing – To offer competitive pricing that is affordable and attractive to its target market.
- Convenient location – Operates from a convenient location in California, where customers can easily access the bikes and enjoy the scenic routes and attractions.
- Marketing strategy – Implement an effective marketing strategy that includes online and offline channels, such as a website, social media, flyers, brochures, banners, and word-of-mouth.
Velocity Bikes expects to generate revenue from four main sources. The following table shows the projected revenue for the first three years of operation:
The main expenses for Velocity Bikes include rent, utilities, salaries, marketing, insurance, taxes, depreciation, and maintenance. The following table shows the projected expenses for the first three years of operation:
The following table shows the projected net income for the first three years of operation:
This section describes the key elements of your business concept, such as what is your bike rental business, who is your bike rental business, and what is your bike rental business history. (Check our Charter Bus Business Plan for better understanding)
Who is Velocity Bikes?
Velocity Bikes is a bike rental business in California that rents bikes to customers. Tourists rent bikes for a few hours to tour the neighborhood recreationally. College students and daily commuters also rent bikes for practical reasons. In addition to bike rentals, Velocity Bikes also offers bike delivery, bike tours, bike maintenance, and loyalty programs. These additional services meet or exceed the expectations of customers.
Velocity Bikes History
Velocity Bikes was founded in 2022 by Bailey Howell, who has a passion for bikes and 15 years of experience in the bike rental business. Bailey wanted to provide a memorable and enjoyable bike rental experience for customers.
The business started with 5 bikes and has since grown to 150 bikes and a larger store in the downtown area. Bailey is supported by a team of professional staff who perform various roles, such as bike rental manager, bike tour guide, bike mechanic, and bike attendant. The staff members are trained and skilled in their respective roles, and they share Bailey’s passion and vision for the business.
According to a report by Allied Market Research, the global bike rental market was valued at £2.1 billion in 2021, and is projected to reach £11.3 billion by 2031, growing at a CAGR of 18.5% from 2022 to 2031. The increase in bike rental industry is driven by several factors, such as:
- The booming tourism industry – The travel and tourism sector in the United States is expected to generate £190.4 billion in revenue in 2023. This is projected to grow at an annual rate of 3.17% from 2023 to 2027. By 2032, the sector is expected to make up 9.2% of the entire US economy. (Source – Statista )
- Rapid urbanization – By 2050, 87.4% of the US population is projected to live in urban areas. (Source – Statista )
- Rapid digitalization – The demand for digital transformation is expected to reach US£ 2.3 Trillion in 2032, exhibiting a growth rate of 14.2%. (Source – Factmr )
- Increasing adventure tourism – The global adventure tourism market was worth £366.7 billion in 2022. It is projected to reach £4.6 trillion by 2032, growing at a compound annual growth rate (CAGR) of 28.7% from 2023. (Source – Allied Market Research )
Demographic profile of target market.
The target market for Velocity Bikes consists of customers who are looking to rent a bike in California. The demographic profile of the target market is as follows:
- Age: 18 to 65 years old
- Gender: Male and female
- Income: Low to high income
- Education: High school to college degree
- Occupation: Students, professionals, workers, retirees
- Lifestyle: Active, adventurous, health-conscious, environmentally aware
Velocity Bikes segments its target market into three main customer segments based on their purpose and motivation for renting bikes.
- Tourists who visit California for leisure or vacation typically rent bikes for short-term durations, such as hourly or daily. They prefer city bikes or electric bikes that are easy and comfortable to ride.
- Residents who live in California typically rent bikes for long-term durations, such as weekly or monthly. They prefer premium bikes or mountain bikes.
- Students who study in California typically rent bikes for medium-term durations, such as daily or weekly. They prefer electric bikes or scooters that are fast and convenient.
Direct and indirect competitors.
Some of the direct competitors of Velocity Bikes are:
- Bounce – Bounce is a leading bike rental startup in the US, operating in 5 states including California. Its strengths include its large scale, low price, convenience, and use of technology. Its weaknesses include its dependence on scooters only, lack of customer service, and regulatory issues.
- Vogo – Vogo is a prominent bike rental startup in the US, operating in California and two other states. Its strengths include strategic partnerships, a customer loyalty program, and safety features. Its weaknesses include limited scale, high price, and operational challenges.
- Yuha – Yuha is a bike rental startup in the US that operates in 7 states, including California. Yuha’s strengths are its eco-friendly bikes, its focus on micro-mobility, and its social impact initiatives. Yuha’s weaknesses are its low speed, its limited range, and its availability in some areas.
Some of the indirect competitors of Velocity Bikes are:
- Public transportation – Public transportation includes buses, trains, metros, and taxis that provide mass transit services to customers.
- Private vehicles – Private vehicles include cars, bikes, and cycles that are owned by customers.
- Other modes of transportation – Walking, cycling, skating, and the use of innovative devices, such as hoverboards, segways, or e-scooters, are all other modes of transportation.
Velocity Bikes has the following competitive advantages over its competitors:
- Quality – Offering high-quality bikes that are well-maintained and serviced regularly.
- Variety – Offering a variety of bikes that suit different preferences and needs of its customers.
- Convenience – Operating from a convenient location that is close to tourist attractions.
- Customer service – Providing excellent customer service that is friendly, helpful, and responsive.
Velocity Bikes uses a variety of online and offline channels to promote its business.
- Website – Velocity Bikes has a user-friendly website that provides information about its services, prices, locations, testimonials, and contact details.
- Social media – Velocity Bikes has a strong social media presence on platforms such as Facebook, Instagram, Twitter, and YouTube.
- Flyers, brochures, banners – Velocity Bikes distributes flyers, brochures, and banners in strategic locations such as hotels, travel agencies, tourist organizations, campuses, and public places.
- Word-of-mouth – Velocity Bikes relies on word-of-mouth marketing to spread the word about its bike rental business.
Velocity Bikes offers affordable and attractive pricing to its target market. They offer flexible payment options, including cash, credit card, and online payment. The pricing of bike rental services is based on the type and duration of the rental. (Check our Air Charter Business Plan for better understanding)
The following table shows the pricing of bike rental services:
The following table shows the pricing of bike delivery and bike tour services:
Velocity Bikes operates its bike rental business using the following functions:
- Booking – Managing bookings from customers through the website, mobile app, or in-store.
- Delivery – Delivering bikes to customers who request delivery service.
- Maintenance – Repairing and servicing bikes to ensure their quality and performance.
- Inventory – Tracking the number and status of bikes and accessories in stock.
- Tours – Leading bike tours that cover the best sights and attractions in California.
Velocity Bikes has set the following milestones for its bike rental business:
- Launch the website and mobile app by March 2023.
- Acquire 150 bikes and accessories by May 2023.
- Hire 50 staff members by July 2023.
- Open the shop near Yosemite National Park by August 2023.
- Reach 20,000 customers by October 2023.
- Break even by December 2023.
Key revenue & costs.
The key revenue sources for Velocity Bikes are:
- Bike rental fees
- Bike tour fees
- Bike repair
- Accessories and Gear
The key costs for Velocity Bikes are:
Funding Requirements and Use of Funds
Velocity Bikes requires £100,000 of funding to expand its bike rental business. The funding will be used for:
- Purchasing 20 bikes and accessories
- Renting shop space near Yosemite National Park
- Hiring staff members
- Marketing the bike rental business
- Obtaining permits and licenses
- Paying insurance and taxes
Velocity Bikes plan to obtain funding from external sources, such as personal savings, bank loan, angel investor, or crowdfunding.
The financial projections for Velocity Bikes are based on the following key assumptions:
- The average occupancy rate of bikes is 70%
- The average rental duration of bikes is 4 hours
- The average number of participants per bike tour is 10
- The average length of bike tour is 3 hours
- The growth rate of revenue is 20% per year
- The growth rate of expenses is 10% per year
Sources of Funding for Bike Rental Business
- Bank loan – Apply for a loan from a financial institution that offers loans for small businesses by providing a detailed business plan, financial projections, and collateral to secure the loan.
- Angel investor – Find an individual or group of individuals who are willing to invest in the bike rental business in exchange for equity or ownership stake by pitching the business idea, market potential, and competitive advantage to the angel investor.
- Crowdfunding – Raise money from a large number of people through an online platform, such as Kickstarter or Indiegogo by creating a campaign Velocity Bikes and offer rewards or incentives to the backers who support your campaign.
OGSCapital: The Best Consulting Company for Your Bike Rental Business Plan
excellent work, competent advice. Alex is very friendly, great communication. 100% I recommend CGS capital. Thank you so much for your hard work!
We hope this sample rental bike business plan has helped you. It shows the structure and format of a professional business plan and gives you some ideas on how to write your own. To write a high-quality and effective bike rental business plan, you need professional help from experts. OGSCapital is a leading provider of individual solutions for existing small/medium businesses and start-up projects.
We have been helping businesses attract £2.7 billion in financing for over a decade. Our team of experts will create a custom business plan for you, tailored to your specific needs. We conduct market research, prepare financial projections, and provide strategic advice. We offer other services, such as business continuity plans, pitch decks, due diligence, ICO whitepapers, ICO consulting, confidential information memorandums, private placement memorandum, feasibility studies, and more.
Jakub Babkins is a senior consultant who specializes in writing bike rental business plans. He has a degree in economics from Harvard University and has worked as a financial analyst, investment banker, and management consultant for leading firms. He has written more than 100 successful business plans for clients in various industries. (For example, Helicopter Business Plan ) You can trust Jakub Babkins and other OGSCapital consultants to write a high-quality and effective bike rental business plan for you. They will work with you closely throughout the process and help you turn your dream into reality.
The bike rental business plan cost depends on the complexity and scope of your project. You can get a free quote from us by filling out an online form on our website. Don’t hesitate to contact us today and get started on your bike rental business plan. We are here to support you and help you succeed.
Frequently Asked Questions
1. What is the target market for bike rental business?
The target market for bike rental business is customers who want to explore their destination on two wheels, such as tourists, residents, students, etc.
2. What are the advantages of bike rental schemes?
The advantages of bike rental schemes are convenience, accessibility, cost-effectiveness, health, fitness, recreation, eco-friendliness, and employment.
Download Bike Rental Business Plan Sample in pdf
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than £1.5 billion in funding, and they can do the same for you.
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Sample Business Plan: Bob’s Rent-A-Bike
- Business Ideas & Tips
- Finance Your Business
- Market Your Business
- Keep Your Business Compliant
Writing a business plan is important, as it’s the foundation of any viable enterprise. Your business plan should be a living and breathing document that contains your goals and your plan for reaching them.
In the early planning stages of your business however, you may want to consider starting with a simpler, one page business plan. Use our bike business plan sample to help you create yours.
Let’s look at a sample business plan to help you get your business started!
Business Plan Sample
BOB’S RENT-A-BIKE, LLC
Bob Adams, Founder
1000 Main Street
This business plan is confidential.
Related: A Guide to Writing Your First Business Plan
We will be part of the large and growing bicycle rental industry. Our target market is summer visitors to Cape Cod, particularly central Cape Cod. We will be differentiated from competitors in that we will deliver rental bicycles directly to our customers at their motels, campsites, or summer rental residences.
We are a start-up business founded as a Limited Liability Company (LLC). At this point we have assembled a detailed operating plan, including promotional plans. We have arranged access to a station wagon to deliver bicycles and a garage to store them in. We have started to carefully buy used bicycles in excellent quality at very reasonable prices.
We have available capital of $2,500 from the founder’s personal savings and we seek an additional $7,500 investment from outside investors in order to be able to complete the purchase of our rental fleet.
Key Success Factors
What will really set us apart from the competition is that while our competitors rent bicycles from fixed rental locations, we will deliver our bicycles directly to our customers’ motels, campsites, and summer rental residences.
Another important differential is that our cost base is dramatically lower than that of our competitors. For one, we are going to buy used bicycles in a very disciplined way to build our rental fleet, whereas our competitors buy new bicycles. We estimate that we can buy quality used bicycles for approximately half the cost our competitors spend for new bicycles.
We will also have very little labor cost. Bob will draw a salary of just $10 per hour. There are other employees. Bob has ridden bicycles for many years, is handy with tools, and believes he can do most basic bicycle repairs himself.
Bob is young, energetic, and willing to work 24/7 to make this business a success!
We will also have very low overhead costs. We will store bicycles in an old garage (previously converted from an outhouse) on our family property. Bob will use the family station wagon, only paying for gas, to service the business.
Bob also has a good neighbor and friend, Harold Perethian, who runs a large bicycle wholesale business, who lends additional advice and provides wholesale prices for accessories and parts.
The business will require a total of $10,000 in financing. The founder, Bob Adams, is contributing his personal savings of $2,500 and he is seeking an additional investment of $7,500. Of the total $10,000 in financing, approximately 75 percent will be invested in building a rental fleet of high-quality, carefully selected and negotiated used bicycles.
We expect the business to be highly profitable and for investors to potentially earn back their investment very quickly.
Over the next few summers, we expect Bob’s Rent-A-Bike to become one of the leading players in the highly profitable and growing market for bicycle rentals on Cape Cod. By reinvesting part of our profits from our initial summers, we plan to expand our fleet and increase our advertising, eventually expanding our promotional activity throughout the entire area.
- Complete operating plan developed. Done.
- Initiate purchase of used bicycles. Done.
- Complete purchase of bicycle fleet. June 15th.
- Complete delivery of flyers by bicycle to motels and campsites. June 20th.
- Initiate rental operations. June 21st.
- End of season sale of bicycles being disposed of. August 20th.
- Last day of rental operations for season. September 1st.
The Overall Market
The overall sale of bicycles and related items in the U.S. in 2015 was estimated to be $6 billion, according the National Bicycle Dealers Association. However, with the average bicycle dealer deriving just 0.8 percent of their revenue from rentals, the market for bicycle rentals would be about $48 million.
Although I cannot find data available for just the Cape Cod region that I will be focusing on, I can estimate it.
I start with my estimated number of bicycles available for rental of about 1,300.
The majority of rentals are single-day rentals. For simplicity, I will assume all rentals are single-day rentals.
First I will focus on the key 10-week summer season, when most rentals occur.
I estimate from anecdotal information and limited personal observation that, including off-weather days, rental bicycles average a 40 percent utilization rate during the summer season, or in other words, are rented for an average of 28 days.
Therefore, the total rental days during the summer season are 28 days per bicycle x 1,300 rental bicycles = 36,400 rental days.
Then I adjust for off-season rentals. I estimate that 85 percent of the rentals occur during the summer season, so the total rental days including the off-season would be 36,400/0.85 = 42,800.
Then I estimate the average daily rate to be $25. Multiplied by 42,800 rental days, I therefore estimate the total current market for bicycle rentals on Cape Cod to be $25 x 42,800 = $1,070,000.
Also, I believe the total possible market is larger, particularly because many rentals are an impulse decision. So every time a new rental stand is set up, I believe the market incrementally expands. Furthermore, with my introduction of bicycle rentals delivered to motels, campsites, and summer residences, the market may expand further.
Changes in the Market
I believe the market for bicycle rentals on Cape Cod is continuing to grow and is fueled by a number of favorable factors.
The rail trails, old railroad lines converted into bicycle trails, are becoming increasingly well known and popular and especially important to the segment of the population that will only take on the expense of a rental bicycle if they can ride it on a dedicated bicycle trail.
People are generally pursuing more healthy lifestyles, especially on vacations, and are increasingly more likely to want to bicycle on vacation.
Many people are becoming increasingly discerning about the quality and type of bicycle that they wish to rent.
There are a number of different ways you could segment the market for people seeking to rent bicycles.
By Quality and Price
First you could segment it by quality and price. At the highest end you have a relatively small niche, which I will call “enthusiasts.” I estimate this segment to be less than 15 percent of potential Cape Cod renters; they are seeking to rent a high-end premium bicycle designed for a bicycle enthusiast, not a casual rider, and are willing to pay a significant premium if necessary to do so. The rental market for this rider is particularly small because this kind of rider is most likely to bring his or her own bicycle on vacation on a rack on the back of the car.
Next you have what I will call “the big middle.” I estimate this segment to be 60 percent of the market. The most common bicycle renter is typically above average income, is not too price conscious if he or she considers the price to be more or less reasonable, and expects a good-quality bicycle but not the high-end bicycle that the enthusiast would.
Finally, you have what I call the “price shoppers.” These are usually families or at least couples looking to rent bicycles for more than one person and are willing to spend at least some effort shopping around to save a little money. I estimate this segment to be roughly 25 percent of the market.
By Rental Time
I estimate the following average rental durations on Cape Cod:
- Less than one day, usually on an hourly basis: 20 percent of rentals.
- One day exactly: 60 percent of rentals.
- More than one day: 20 percent of rentals.
By Mobile Delivery
Currently, I believe no rental firm is delivering bicycles to the customers’ location. I believe there is absolutely a demand for this because people who don’t bring their bicycle on vacation also do not bring their bicycle rack and cannot easily transport bicycles in their car, and people generally don’t even consider renting a bicycle rack.
Target Market and Customers
Our target market is people who want to have bicycles delivered to their motel, campsite, or summer residence.
Because there will be some expense in making this delivery, we will primarily focus on customers interested in renting bicycles for more than one day. Even though in my analysis of the market I estimated that only about 20 percent of rentals are for more than one day, the revenue from such rentals is significantly higher. In fact, with the price for two days usually being exactly double one day, and a week being substantially higher than two days, for example, the market for rentals of more than one day may be over 40 percent of the market in dollar terms.
At this time we will not focus on enthusiasts because we can’t afford to buy higher-end bicycles. We will, however, try to capture some of the price-shopping market, especially because people who rent bicycles for longer periods of time may tend to be more price conscious.
With our customers looking to have bicycle rentals delivered to them, and generally renting for periods longer than a day, these people will be quite a bit different than the person who might rent a bicycle for an hour from a roadside stand.
People renting bicycles for an hour from a roadside stand are generally young—often in their twenties—and frequently single but usually in the company of one or more friends.
People renting bicycles delivered to their motel, campsite, or summer residence and renting for multiple days tend to be a couple, if not a family group.
Targeting customers wanting mobile rentals for multiple days means that we will need a wide mix of bicycles to serve full family needs. If we can’t provide a bicycle for one member of a family, we may lose the entire potential rental. So we need bicycles of all sizes and we need plenty of baby seats!
The mobile rental customer is not as much of an impulse customer as someone renting from a roadside stand is. So having the shiniest and newest bicycles is not really going to help us get rentals. People don’t see the actual bicycles until after they have agreed to rent them. But the bicycles need to work and work well. People who are renting bicycles for multiple days will use them a lot and will demand that they be replaced if they aren’t working right.
The bicycle rental industry on is dominated by U Pedal It, Inc. Although they have a storefront near the harbor in Hyannis, most of their rentals are from dozens of agent-operated locations all over Cape Cod.
Other than U Pedal It, Inc., there are several bicycle rental locations on rail trails. And there are a handful of bicycle retail shops on Cape Cod that also rent bicycles.
Nature of Competition
The nature of competition is focused on location and displaying bicycles, to apparently appeal to impulse renters—those who did not necessarily plan on renting a bicycle as part of their vacation, but take a look at the shiny outdoor bicycles lined up at rental locations and say, “Wouldn’t that be fun!”
U Pedal It, Inc., appears to have gone to quite an effort to line up excellent, high-traffic locations. In addition, the several rental firms that are located on bicycle trails are basically betting their business on their proximity to a great bike riding location.
There does not appear to be much price competition. Everyone offers about the same price for a standard bicycle. I don’t see price mentioned on signage at rental locations or in advertising.
Changes in the Industry
As the market for bicycles rentals on Cape Cod has grown, so has the competition. The popularity of the rail trails has led to more rental locations near the rail trails. And the increased emergence of bicycle enthusiasts looking for high-end rentals has further splintered the market and created a rental niche for high-end bike dealers.
Our primary competitor is U Pedal It, Inc. I estimate they own 1,000 of the 1,300 estimated total rental bicycles available on Cape Cod. They have at least double if not triple the combined locations of the rest of the industry put together.
Their strategy is to dominate Cape Cod by making agreements with agents, such as gas stations, motels, etc., to rent their bicycles in exchange for a percentage of the revenue. They have very carefully selected their rental agents and will negotiate the percentage of revenue, particularly if the location is highly successful.
They rent high-quality Raleigh bicycles. They completely renew their fleet every two years or so.
They are also the leading advertiser for bicycle rentals on Cape Cod.
Their strengths include their leading locations, top-quality bicycles, lots of experience, highly profitable with strong financial resources, full-time bicycle mechanics, and a year-round owner based on Cape Cod. They also have only one type of bicycle, the very recognizable Raleigh brand, which looks great and holds up well during rentals, and because they use a single brand, their bicycles are easier to maintain.
A possible weakness is that U Pedal It, Inc., is successful and so dominant that they will likely not feel the need to respond to a small new competitor, either by trying to match new services or to match lower prices.
Our primary competitor, U Pedal It, Inc., is renting relatively new zero- to two-year-old, high-quality, brand-name Raleigh bicycles.
While U Pedal It, Inc., does a fair amount of advertising, its most important promotional strategy is the shiny displays of new rental bicycles in front of the busy commercial properties of its many rental agents. These displays appeal not only to impulse renters but also to more contemplative renters, who are constantly reminded about the availability of the U Pedal It, Inc., rental locations.
The clearest need I see in the market is for the delivery of bicycle rentals directly to motels, campsites, and summer residences. Although costs will not make this practical for very short (i.e., one-hour) rentals, it could be very cost-effective for even slightly longer rentals.
Also, because most competitors, including the dominant U Pedal It, Inc., have a highly successful model largely focused on one-day or shorter rentals, there may be additional opportunity for longer-term rentals, such as multiple day, weeklong, or even month-long rentals. Because such longer-term rentals can become rather expensive, potential renters are more likely to shop around for a competitive price. And U Pedal It, Inc., having a highly successful business model, would probably not feel a need to respond to a tiny, new competitor competing for just a small portion of the overall market.
Threats and Risks
The biggest threat would be if a highly established player, especially the dominant U Pedal It, Inc., decided to respond directly to Bob’s Rent-A-Bike and match our delivery offer or our pricing. However, as I have outlined previously, I think this is highly unlikely because their model is highly successful and we are just gearing up for a sliver of the market.
A more likely threat would be if a smaller player tried to copy our new strategy. This is possible, but I think it is unlikely, especially during the first season. Also, for an existing player with an existing location, it is a lot more work to deliver rental bicycles. Not everyone wants to work as hard as Bob Adams.
Key Competitive Capabilities
Being the “new kid on the block,” I can enter the industry with a whole fresh approach and a whole new business model, serving the unmet needs of some customers and better serving the needs of others.
Unlike my competitors, I don’t have an established way of doing business. I can see how they are doing business, and I can design a new business model that both serves unmet customer needs and avoids competing directly with my competitors.
I don’t have a lot of money and I don’t plan on raising very much. But I’m resourceful. I know how to get a great value buying used bicycles. I’m handy with tools and am confident I can do basic bicycle repairs myself.
My mother is going to allow me to use the family station wagon for this business, as long as I pay for gas and can work around her schedule. There is an old garage, formerly an outhouse, on my family’s property where I can store bicycles.
So even though I’m probably the smallest competitor, my cost structure has got to be the lowest.
I’m willing to work as many hours as it takes this summer, day or night, weekday or weekend, to make this business succeed!
Key Competitive Weaknesses
My competitors’ advantages include more experience, more financial resources, better and newer bicycles, experience in advertising, excellent locations, and year-round availability on Cape Cod.
My strategy is to deliver rental bicycles to my customers’ doorsteps, to their motel, campsite, or summer residence.
I am going to target customers who are interested in renting bicycles for two days or longer.
I believe much of the longer-term, deliverable bicycle rental market will be families, so I will make an effort to build a rental fleet with bicycles for all ages and also have plenty of baby seats.
I am going to be flexible in pricing for longer periods of time, such as a week or a month, when the rental fee might come close to being as high as my entire purchase price for my average used bicycle.
Because I am not renting bicycles on impulse from highly visible bicycle stands and customers will not see my bicycles until after they have requested a rental delivery, and because I have very limited resources, I will build a rental fleet of used bicycles instead of new ones. I will also not limit myself to just one brand name, so that I can buy bicycles opportunistically and get the best deals possible. Given that large quantities of my bikes will not be displayed to the public at once, it won’t matter that they don’t match and that I have all kinds of different brands and colors.
Finally, especially because I have limited finances, I am going to keep my operating costs rock bottom by using my mother’s station wagon and by using the family’s old garage for bicycle storage. I am going to design my own advertising.
Bumper Sticker Strategy
My bumper sticker strategy is “mobile bike rentals.”
Our service is renting bicycles. We will rent by the day, by the week, or by the month. We will not rent for less than a full day, unlike most competitors, who rent by the hour as well.
We will rent two types of bikes only, adult bikes and children’s bikes. Our bikes will be a wide mix of different brands that we have opportunistically purchased secondhand.
All adult bikes will be ten speed or more. All adult bikes will have conventional, non-racing handlebars.
Children’s bikes will be one speed. Some will have high-rise handlebars.
All bicycles will have full and working safety equipment as required by law, including reflectors and an operable bell or horn. Brakes will be checked prior to each rental. All bikes will also be equipped with a basket.
In addition, baby seats will be provided by advance request for no additional charge. These seats can be relatively easily installed and removed in order to keep the rental fleet flexible.
Positioning of Products/Services
We will position ourselves as the only alternative for people on Cape Cod looking to have bicycles delivered directly to them, be it their motel, campsite, or summer residence.
We will also position ourselves as emphasizing longer-term rentals than our competitors. Unlike our competitors, we will not rent bicycles for less than one day. We will offer lower rates on extended rentals such as for a week or longer.
We will also position ourselves as family friendly, with a good variety of bicycles for not just adults, but kids of all ages. We will rent kids’ bikes for half the price of adult bikes. We will have a good supply of baby seats that we will provide for no additional charge.
Competitive Evaluation of Products/Services
The most important competitive metric for us is the availability of delivery to the customers’ location. This is how we will stack up:
U Pedal It, Inc.: No
Bike trail–located rental competitors: No
Bicycle shop rental competitors: No
Bob’s Rent-A-Bike: Yes
Another important competitive metric for us is the competitive pricing of longer-term rentals:
Daily rental rates (comparable adult bicycles)
U Pedal It, Inc.: $25
Bike trail–located rental competitors: $25
Bicycle shop rental competitors: $25
Bob’s Rent-A-Bike: $25
Weekly rental rates
U Pedal It, Inc.: $90
Bike trail–located rental competitors: $85
Bicycle shop rental competitors: $90
Bob’s Rent-A-Bike: $77
This is how the quality of our bikes compares:
U Pedal It, Inc.: New, high quality, one brand (Raleigh)
Bike trail–located rental competitors: Relatively new, good quality, one or two brands
Bicycle shop rental competitors: New, high quality, mixed brands
Bob’s Rent-A-Bike: Good working quality, but slightly used
Looking out to future summers, we aim first to grow our customer base for our current product offerings. At some point in future summers, we may begin to buy new, high-quality bicycles and to standardize our fleet. We may also test demand for higher-end bicycles for the enthusiast.
SALES AND MARKETING
The main marketing message we want to send is that, unlike our competitors, we deliver rental bikes right to the customer’s location.
There are other ways that differentiate us from our competition, such as lower rates for longer-term rentals and a little more effort to be family friendly. But what makes us stand out much more clearly from our competitors is our delivery of bicycles, so that’s what we are going to overwhelmingly emphasize in our marketing.
We don’t have time or money to invest in building an image. Our marketing is designed to “ring the register” with bicycle rentals today, not for building an image for tomorrow.
Being an all-new business and having only a 10-week summer season, we are going to immediately try and test a whole bunch of marketing alternatives. We just don’t have the time to test one after the next sequentially. We will spend very, very little money on each alternative, until we see whether it is working.
While we are willing to deliver bicycles anywhere on Cape Cod, we will give an extra emphasis to marketing to motels and campsites within a half hour drive of our bicycle storage facility. Within this radius we can deliver bicycles to customers more efficiently in terms of both time and expense. At motels and campsites I believe we will find a concentrated audience with a higher propensity to rent bicycles than the general summer population.
Unique Selling Proposition
Our unique selling proposition is: “Bike rentals, delivered free!”
The fine print indicates a minimum of two bikes being rented for two days each to qualify for free delivery. This means that we are grossing at least $100 on each free delivery, or $25 per bicycle per day.
We are the only bicycle service on Cape Cod offering delivery of bicycles. Offering delivery for free makes it that much more compelling.
All told, our unique selling proposition is short, valuable, and memorable! Great for use in marketing campaigns!
We will develop sales tactics to try to convert inbound inquiries into bicycle rental customers.
Some of our inbound inquiries will be phone calls. We will use a six-part approach to closing phone inquiries.
- We will try to answer the phone immediately night or day. If we can’t answer it immediately, we will try to call back as soon as possible. Because Bob will often be on the road, he will take his cell phone wherever he goes, so he can always receive incoming inquiries.
- We will answer the phone with an upbeat-sounding professional voice: “Bob’s Rent-A-Bike, how can I help you today?”
- If a prospective customer is not ready to rent at the start of the conversation, we will try to provide three good reasons why they should use Bob’s Rent-A-Bike right now.
- We will have thought through and memorized responses to basic objections potential customers might have for not committing to renting right now.
- We will try to close the sale with phrases such as, “I’d like to reserve bikes and delivery time for you, so we can be sure to get you in our schedule with some great bikes.”
- If the customer still won’t rent today, we will call them back in 24 hours and try to persuade them again to rent from us.
Inbound Email Inquiries
- We will respond by email, customized from one of our basic prewritten compelling responses of why you should rent from Bob’s Rent-A-Bike.
- We will also link our response to our website.
- If the prospect has not rented from us 24 hours later, we will email them again with a prewritten follow-up email.
- Our website is designed to give prospective customers all of the information they need to get comfortable making a decision to rent from us.
- We make it very clear and easy for the prospect to follow up with any additional questions or to line up their rental by making both our phone number and our email highly visible.
Selecting an advertising medium is trickier for us than for many new businesses for a several reasons. First, most of our competitors primarily attract customers on the basis of their highly visible commercial locations, including large displays of rental bicycles and signage. Our bicycles are stored in a garage in a residential-zoned district, so we really need to make our advertising work.
Second, we only have a 10-week summer season. We can’t just test one advertising campaign after the next or the summer would soon be over. We need to test several at once.
Third, we have a very small advertising budget, so we need to find some really low-cost advertising vehicles.
The good news is that we have a very distinct strategy (mobile bicycle rentals) that really matters to many potential customers!
The even better news is that we have been able to translate our powerful strategy into a compelling unique selling proposition: “Bike rentals, delivered free.”
So between our strong strategy and our memorable USP, we have a really good chance of getting a decent response, even from low-budget advertising.
Our website is a core component of our advertising. We will prominently display the website address or have a link to it in all of our advertising. We will design the website primarily to “sell” a prospective customer on the idea of renting bicycles from us. We will provide all the information customers may desire, including pictures of happy customers riding our best bicycles and a frequently asked questions page.
We will also provide rates. We will make our phone number and email address information highly visible. The website will be just a few pages long, but it will be attractively designed and simple to navigate. We will also design the website to optimize search engine results placement.
We will go out to every campsite and motel and coffee shop within a 30-minute drive of our house and plaster every bulletin board with an advertising flyer. We will leave small handout flyers at motels. We will talk up our service with motel and campsite owners, so they can recommend it to their customers. Bob will ride his bicycle to visit them, to increase impact and recall.
Tourist Guide Advertising
We will test a very small ad in one of the small tourist booklets distributed all over Cape Cod. The advertising is one of the more expensive things we will do, but we will keep the first ad very, very small until we see that it is working.
Local Newspaper Advertising
We will test a small ad in the local weekly newspaper. We will aim this more for longer-term renters.
Search Engine Advertising
We will run several very short tests for keyword advertising. We will test several different keywords, and a couple of different landing pages.
Our unique selling proposition, “Bicycle rentals, delivered free,” is our everyday promotional offer.
Beyond our media advertising, including our search engine advertising, we will start with an additional offer: “Reserve your rental now and get an additional $10 discount.”
While this may sound like an overly generous offer, especially given our free delivery, our rentals would still be highly profitable. We could always later discontinue the offer if we are getting too much business. On the other hand, if a particular advertising media is not responding in our first test with this extra $10 discount, then we can feel more confident in immediately dropping it.
Additionally, if rentals are running below plan, we may discount prices further during the process of phone inquiries, especially for longer-term rentals.
Our primary publicity vehicle will be social media. We will aggressively promote our visibility on social media; encourage friends, customers, potential customers, and key local businesspeople to follow us; and update our information regularly.
We will also send a start-of-season press release to all major websites and print vehicles everywhere on Cape Cod.
Bob will offer to do talk show interviews on local Cape Cod radio and cable TV stations on the joys of bicycling on Cape Cod, liberally referencing Bob’s Rent-A-Bike.
Instead of passing out a traditional business card that largely features his name, Bob will pass out to every single person he sees all summer long a Bob’s Rent-A-Bike business card–shaped advertising piece that offers a special “Friends and family $10 discount on your next bicycle rental.”
Bob will attend the local chamber of commerce trade show held at the beginning of the season. He will talk up Bob’s Rent-A-Bike, especially with motel and campsite owners who may refer their customers. He will also give them promotional flyers.
The key person is founder Bob Adams. Bob is nineteen years old and is completing his freshman year at Carleton College. He is a graduate of Phillips Exeter Academy. Bob’s previous summer jobs include working as a rodman for Savery Engineering, as a dishwasher for Howard Johnson restaurants, and as a busboy for Stage Coach Grill. Bob has ridden bicycles for years, is handy with tools, and is ready to work 24/7 to make Bob’s Rent-A-Bike a success.
Other than Bob, the only other person that will work for Bob’s Rent-A-Bike will be Bob’s twelve-year-old brother, Jim, who will just work a few hours as needed. Jim will answer the phone if Bob is not available and help clean and maintain the bicycles. Jim is willing to work for a very, very modest wage.
Human Resources Plan
To provide extra motivation for his younger brother Jim and to offset the very, very modest wage he will receive, Bob will let Jim use a different Bob’s Rent-A-Bike bicycle of his choice each week, provided it is not needed for rental purposes.
Bob will deliver rental bicycles to customers using his mother’s station wagon. Bob has agreed to reimburse her for gas and try not to beat up the car too much. He also has a large bicycle rack to mount behind the car, and has been practicing carrying bicycles on the roof as well. Bob feels he can carry as many as 12 adult bicycles in one trip.
Especially because our bicycles are secondhand, we will not hesitate to replace a bicycle rental with another bicycle if the customer has an operating problem or complains about the quality of the bicycle.
We aim to have a rental fleet of 50 bicycles.
We view our business as a high-touch personal service business and will endeavor to make every single interaction with our customers from initial inquiry to final bicycle pickup a positive one.
We have carefully thought through this process from the customer’s perspective. Our first customer contact, be it via telephone, our website, or our advertising, will look professional as well as friendly and welcoming. We will continue interacting with our customers in a “high touch” warm and friendly way throughout the entire process.
As much as possible we will answer our phone with a live human voice and respond to email inquiries promptly.
Because we expect our customers to have a very positive experience with us, we will also ask our customers for referrals and ask them to follow us on social media.
In keeping with our low overhead, we will operate out of an old garage on our family property that was converted from an outhouse. It is a small, single-car garage and not all bicycles will fit parked in the garage at once. However, we intend to purchase bicycle hooks that we can screw into the old beams in the ceiling of the garage and hang bicycles from, saving huge amounts of space and allowing us to get all 50 bikes into the garage.
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Bicycle Rental Business Plan Template
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Have you answered the question of how you can start your rental bike business? If not yet, why don’t you start with our Bicycle Rental Business Plan Template? This business document will help you plan out your marketing strategies and other important elements before you finally decide to open up your own rental bike business. Have the freedom to customize any of its content or edit it in various editing programs easily and hassle-free. It’s also printable using home, office, and commercial printing for your convenience. Set your goals and achieve your objectives by downloading and making use of this Bicycle Rental Business Plan Template now!
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Sample Bike Rental and Sales Shop Business Plan
Do you need help starting a bike rental shop? If YES, here is a sample bike rental business plan template.
Rental services are numerous and hold a lot of opportunity for persons willing to take the chance. If you are one of such, this bicycle rental business plan sample may be of help. If you are reading this article, then you may have specifically searched for this information.
Bicycle rental business is now, ever than before, witnessing more demand and patronage these days, and this is as a result of the oil prices that has risen. No wonder, tourists would prefer renting out a bike rather than going for cars.
Starting a bike shop for selling, repairing and assembly can be a profitable cum rewarding experience, only if you are ready to put in the necessary work and capital.
BIKE RENTAL BUSINESS PLAN SAMPLE
Will you mind capitalizing on bike shop? Do you need the requirements needed before starting a bike shop?
Whatever your need is for starting a bike shop, this article is furnished with all what it entails to venture into the bike industry.
The incessant increased in demand for bikes has over the years brought about the appearance of more and more manufacturers in the bike industry, you have a clear chance to make a way out of those manufacturing companies by starting your own bike shop.
All you need is just a connection to be one of their retailers, and you are good to go. With the following surefire ways and method, you are bonding to have a hitch free in the course of starting a bike shop.
So therefore, if you reside in an environment where private means of transportation stays scarce or a vicinity that is so narrow that automobiles wouldn’t be able to pass through, then starting a bicycle rental business would be a perfect business opportunity for you in such an area.
Here is a sample business plan for starting a bicycle rental shop.
Define your Niche
Right! You have tracked down a suitable location plus a building for your bike shop and contacted your bike supplier.
Now, you have to identify your niche and choose the type of bike to sell before spreading the startup capital around so that you wouldn’t get stock up in the long run.
Your first supply of bikes to your bike shop should at least give your prospective customers a choice of two brands.
Your supplier will help you out in deciding the best colors, frame sizes and design to start with. In as much as you are trading with a reputable firm, you need not to disturb yourself about being oversold on any given style.
What is Your Bicycle Rental Business Startup Cost?
Starting a bicycle rental business doesn’t require millions of dollars, but yet you will need to have the enormous amount of dollars in your purse. The big part of your finances need to be set aside purposely for acquiring a standard fleet of bicycles.
Also, you will need to get the repair kits available for the maintenance and repair of your bicycles . Depending on the number and quality of the bicycles that you would be acquiring, you will need to spend something around $8000 for a nice fleet of over 20 bicycles.
Fairly used bicycles -if you actually go for them -may lower the acquisition capital, but the maintenance fee would be naturally higher if you try to bring them up to have equal value with quality ones.
Ensure you adequately maintain a varied fleet, renters’ needs and desires may vary from each other. For instance, mountain bicycles are popular and common, having it on your inventory is nothing but a great benefit to your bicycle rental business.
However, you don’t have to discard the other types as some of your potential customers and renters may find them appealing for their use. Some other important costs that you will have to maintain to keep your bicycle rental business flourishing include the insurance cover (liability and theft) and the likes.
So therefore, the number one tip for starting a bicycle rental business is for you to ensure that you have more than enough startup capital on you.
A Business Plan and Adequate Knowledge of the Bicycle Renting Industry
Starting a bicycle rental business is a profitable and rewarding exercise, but it is ideal to come up with a plan on how the business will look like in detail before you begin.
In addition, having a thorough knowledge of the rewarding bicycle rental business is the key to starting the business.
The bicycle rental industry has its own unique tricks of the trade which is of great benefits to having a knowledge of.
This vital information you need about the business can only be obtained from someone who has a vast experience in the business, and essentially, someone who will be a potential competitor.
There are several bicycle rental businessmen out there who are willing to talk and discuss the tricks of the trade with you, mind you, finding them wouldn’t be easy, may hap, it will take some bit out of your time.
An Ideal Location for Your Bicycle Rental Business
Your bicycle rental business needs to be located at a strategically chosen place or position for it to attract, capture and captivate the attention of the customers easily. An interesting position for your business is a place nearer to the highway, which will aid the motorists and the tourists to see the bicycles you put on display for rent.
Another suitable spot for your bicycle business is a location where rental services like the movie and the camera rentals are situated, these are places where renters often visit regularly, they wouldn’t hesitate pedaling through this area.
However, the importance of selecting the right and better location for your bicycle rental business is a common tradition for small business startups. Choosing the right location for your bicycle business is one of the critical factors to its success.
Having choose a perfect spot as your bicycle rental business location, the next thing you need to do when starting a bicycle rental business is to get all the startup equipment ready. The major startup equipment require for a bicycle rental business is nothing but bicycles.
Addition to bicycle is safety equipment like a helmet and a central location. You can get started with just a small booth, as time goes by, you can relocate to a wider facility as your business grows up with a well expanded revenue stream. Another important thing that needs to be considered and addressed prior to launching your bicycle rental business is insurance.
If one of your renters gets hurt while riding one of your bicycles, you will need a strong insurance to cover your personal assets plus your rental shop from legal liability, take note!
Before your bike shop grand opening, of course, you sure will have to find a reliable wholesale supplier who will be furnishing your bike shop with bikes, spare parts and accessories.
This aspect too needs careful timing: Around summer months, you may encounter difficulties in finding sources whose goods have not been sold out completely to existing dealers.
As a result, it is better to open your bike shop during the fall (the height of the season will be over then) when most of the distributors will be eager to welcome new business.
By this, you will also have the time to get yourself acquainted with the operation sequel to the spring rolls around, and your target audience will have some time, also, to get familiar to the presence of your bike store.
However, the easiest way you can get a supplier is by surfing the net for the available bike supplier.
The following are some of bike supplying company that might be of help to you: Gitane Pacific, D-I-N Industry, Beacon Cycle supply, Alpine Distributors etc.
Consider the Competition in the Bicycle Rental Business Industry
Sequel to opening a bicycle rental business, it’s advisable you do some findings on how the business of your who-be competitors are.
Find out if the competitors are really doing a good job, and it is very imperative you understand their strengths, weaknesses and look for ways you can adopt to stack up against them.
Rental Charges Rates
You should decide your Bicycle rental charges by the time spent. It should be in order of the hour spent be it half-day, full-day and/or weekend. Charges vary from one rental market to the other, but you need to be lenient on your prospects while billing them since you are just starting out; first impression they say it last even longer.
However, the bicycle rental business has been a lucrative venture over the years. For this reason, it wouldn’t be a big deal if you decide to venture into the industry as well. Master the above tips very well if you are looking for the strategies involved in starting a bicycle rental business, this article is indeed a comprehensive business startup guide for wannabe like you.
Whatever the penny you have left from the startup capital should be held tightly as a reserve capital just in case you will be in serious need of it. You never can tell, a customer can walk into your bike shop and request for 5 to 8 bikes for his children or grandchildren.
For example, so if they are not available in your stock, at least, with the reserve fund you will be able to order for the bikes from your supplier. While most of the businesses are new and thriving well, it is usually the best option to keep back every penny of profit earn into the operation, therefore, a bike shop is no an exception.
Be informed that it is not a good idea to depend on your business and fledging enterprise as your source of livelihood unless and until it has be firmly established.
Ideally, the other tips and method of starting a bike shop apart from the aforementioned depends on how well you work during the course of learning and operating the business. However, you cannot expect yourself to get rich quickly with the business but if you are ready to work hard with your bike shop in quiet and peaceful surroundings, surely, good things will come your way.
BICYCLE RENTAL BUSINESS PLAN EXAMPLE
This sample bicycle rental plan is revealing in the sense that persons who have had difficulties in putting their plans together will find this very helpful.
However, you must know that it does not start and end with your plan. Writing a good bicycle rental plan is one thing, patiently following and implementing your plan is another.
- Executive Summary
Two Wheels Rentals is a bicycle rental business located in Michigan’s Mackinac Island. This is a top tourist destination that attracts tourists from all across the United States and beyond. To explore this island, tourists would need to find a way to get around. This is where we come in. Our bicycle rental business will have a fleet of 35 new bicycles. These will be rented out to tourists from $10 to $15 per hour.
We provide a vital service that has since contributed to the boom of the tourist industry on Mackinac Island. The best part of this business is that it can be managed by one person. However, the owner Darwin Stubbs has employed a helping hand to help manage the rental business better. The maintenance costs for our bicycle rental is significantly low.
- Services Offered
We provide tourists an easy way to get around the island. All the bicycles on our fleet are well maintained and oiled to ensure that our clients have nothing to worry about. In a situation where our bicycles malfunction, we offer our client 2 options; a refund or an exchange.
Two Wheels Rentals is a low cost bicycle rental business. To finance the business, we have saved up the sum of $15,000.00. This sum will be used in buying our fleet of bicycles as well as spare parts which will need to be changed when damaged. We are setting aside 20% of these funds as running cost. The average cost of a unit will be around $300.00 depending on the seller.
- SWOT Analysis
We are dedicated to ensuring that our business is guided to profitability. The proper maintenance of our fleet of bicycles is key to our profitability. We also consider a SWOT analysis necessary for our business. This is to enable us identify where problems may lurk and plan for them ahead of time.
Our bicycle rental business is in a strategic location where there are constant droves of tourists. They need to get around the island easily. Our fleet of bicycles makes this possible. We are growth focused and seek to expand our fleet of bicycles once demand outstrips supply.
We have no previous experience in this line of business. This may count against us at some point in future. A remedy to this problem is constantly seeking ways to address difficulties at their early stages.
The future looks good for our bicycle rental business. A greater number of people are embracing the use of bicycles as an easier way to beat vehicular traffic. We are considering expanding into crowded cities. We are also taking advantage of state legislation that have addressed safety for bicycle users through the creation of dedicated lanes.
In the event of a recession, the tourism sector will be badly affected. Tourists will no longer visit because their disposable income streams have dried up. We will be at the receiving end as patronage will come in trickles or cease totally.
- Sales Projection
With the current boom in the tourism industry, our services will be in high demand. This trend is even expected to improve in the coming years. Our sales projection includes a 3 year prediction using the demand for our services.
Our forecast shows the following;
- First Financial Year $20,000.00
- Second Financial Year $50,000.00
- Third financial Year $80,000.00
- Competitive Advantage
Our advantages over our competitors are our new fleet of bicycles. These are of better quality and are brand new. We also charge one of the lowest fees within our location. This makes us the preferred bicycle rental business for tourists.
- Marketing and Sales Strategy
We have mounted billboards at the point of arrival. This informs tourists of our services. We are located close to the point of arrival. This area is strategic and can be visible from most points of the island. Our bicycles are also displayed for easy identification.
- Target Market
Our target market consists of pretty much anyone interested in enjoying a bicycle ride. Because tourists are the major visitors to Mackinac Island, they are our main target market.
As we expand our services to the mainland, we will target the busiest parts of the city. Here, our target audience will be more diverse. It will include business executives that want to beat traffic, men, women and teenagers.
Using our bicycle rental business plan sample , you will be able to put together your own plan. It does not matter how long it takes to do so.
The most important thing is that you get it right. You should try to understand the constraints or challenges, opportunities as well as underlying factors influencing the successful take-off of this business.
This will contribute in no small measure in helping you put together an excellent plan.
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