Bike rental businesses can be extremely profitable if designed and run correctly. Rentrax understands this from two different perspectives:
- We started out as a bike rental business and still run a successful bike rental business
- Through our bike rental software business, we serve ever-growing bike rental businesses who pull in huge amounts of revenue every year
A bike rental business is relatively easy to run if you have the right information, the right approach, and the right software. More and more people rent bikes each year and, excepting Covid, it has never been a better time to get into bike rentals. With this guide, we’d like to cover some of the basic principles and considerations you should make if you’d like to start your own bike rental business. However, given how varied this industry is from place to place, we encourage you to get in touch with us if you have any follow-up questions. We don’t run a business consultation service but our experts train and talk to people every day who own bike rental businesses, so we can almost certainly help.
Bike Rental Business Can be Very Seasonal
Depending on where you’re based, a bike rental business can be very seasonal in nature. This is obviously because tourism is inherently seasonal. The seasonality of a place usually relies on the temperature and hours of daylight, but there are always exceptions to this, so it is tricky to make any general advice about this that carries all around the world. Pay attention to the tourism high season in your area — something you’re probably already aware of — and perhaps even ask some non-competitive local businesses for their insight.
But what can you do with this information once you fully understand your area’s seasonality? You can change how your business model works so that you make the most of your high season and that you pull in some business in the low season. Pricing and special offers are the obvious ways to encourage some people to rent bikes in cold months, but it’s important to recognize that locals may be a more reliable audience at this time of year. In the high season, you should ensure your profits are optimal; while your bike rental prices should be competitive, this is almost always not the time to offer larger discounts. If your location is good enough, you’ll attract enough tourists, so convenience should be your main selling point, not price. This leads neatly onto the next point…
Choosing a Location for your Bike Rental Business
The location of most bike rental businesses is very important. This is because convenience plays a big role in potential customers’ willingness to rent bikes. While it’s common for locals to rent bikes, it is often tourists that make up the lion’s share of a bike rental business’s customer base. This is why choosing a location close to popular tourist spots will almost always yield the best results. Tourists will be looking for fun or interesting ways to explore a location while on vacation, so positioning your store so that you can grab more tourists who pass by your shop will almost certainly be one of your most impactful business decisions. Find the right location that is convenient for tourists and your store’s location will be the biggest factor in your business’s success.
The Bike Rental Goldilocks Principle
Once you have a good location and you understand your seasons, you need to buy the right number of bikes to take full advantage of this. This can be difficult to figure out if it’s your first time working in bike rentals, but if you have some experience working for another bike rental business, you will probably have a good idea of how many bikes you’ll need on a daily basis. That said, if your experience is with another city or location, don’t assume that the numbers will carry over; after all, there will be a different number of tourists, a different range of cycle routes, and a different selection of landmarks people may want to cycle to.
The best approach for every location is to try to find the perfect middle ground. Just as the middle porridge was perfect for Goldilocks, the middle number of bikes between too little and an abundance will be the most profitable for you. Remember that each bike is an investment and that all of the time that bike doesn’t spend in the hands of a customer is time that investment isn’t earning its return. So, start out small, with a number of bikes that are guaranteed to work for you. Then, as you find you need more bikes, add them in small batches, but resist the urge to double or multiply your fleet. It is entirely okay if you have to turn a few customers away sometimes because you are out of bikes. Think of it this way: would the added revenue from being able to service the surplus of customers pay for the cost of the extra bikes you have to buy? If the answer is yes, then buy the bikes. If the answer is no, then you should hold out.
Decide What Kind of Bikes Will Define Your Business
While your business’s name, signage, and overall brand will help (or hinder) you, your choice of bike will make the biggest impression on people. Your bikes are ambassadors for your business as customers cycle them around your local area. People may say, “Look at those cool bikes; where can you rent them?” Equally, the quality of your bikes will also heavily impact your customers’ experience, which will then influence reviews and ratings.
Your choice of bikes will also change depending on your ideal customer. If you’re targeting serious cyclists, then you will need to spend a lot more money on each model. But if you’re simply targeting casual tourists who are looking for a novel way to get around your destination, then cheaper models will suffice and you may prefer to choose bikes that will catch people’s eye and that will represent your brand effectively.
Invest in Specialist Bike Rental Software
We’ve written an entire guide dedicated to choosing the best bike rental software for your business; in this guide, we talk about Rentrax and why we believe our software is the best on the market. Please feel free to read the entire article for more information, but we can give the quick-and-easy version here.
Anyone with experience working with any kind of rentals will know how important rental software is. This is because it is very important to be able to accurately keep track of your rental assets. Each rental niche comes with its own problems and solutions, however, which is why it’s important to find software that has been designed to work specifically for bike rentals. Rentrax started out as a bike rental business and it was our struggle to find software with all of the features we needed that pushed us to develop our own software. We needed software that met all of our needs, so we added a bunch of clever functions and have continued to add features as customers have asked for them.
Here is a shortlist of some of the features our bike rental software can bring to your business:
- Our native waiver function protects the customer and the business. There are many third-party waivers that can be integrated into bike rental software, but it’s much simpler just to have a native waiver.
- Our SKU-based inventory management allows you to give your customers a wide range of bike features to choose between. Separate models by size, tire width, colour, weight, and much more. You can create an online customer experience as complex or as simple as you like. Obviously, the complexity of this depends on whether you’re targeting tourists looking for a gentle cycle or serious cyclists who like to heavily customize the equipment they use.
- Sales and booking features are also built into our bike rental software. Many of our clients simply rent bicycles, but some also offer bike tours and sell drinks, snacks and bike gear in store. Rentrax allows you to have sales and booking software as part of the same system. It is so much easier, and cheaper, just to have it all in one place.
- Rentrax also recognizes the importance of integrating marketing features into our software, so we added the ability to offer special deals to previous customers, both by email and SMS. This could be achieved on separate software, but it would cost more money and more time. It’s better to just have it as part of the one system.
- Our inventory management tracks when your bikes and bike equipment have earned over the initial cost of investment, allowing you to sell stock after it has more than paid for itself, refreshing stock in the most efficient way possible.
There is, of course, much more we could say about starting your own bike rental business, but we hope we’ve answered a few questions and given you some of the advice you were looking for. We also hope we’ve reassured a few readers who were on the fence about starting their own bike rental business. If you have any follow-up questions, please don’t hesitate to get in touch. Your new bike rental business could be only a few steps away!